Conditions in the US housing market coincide with tighter policies by the Chinese government, which created conditions for a massive departure of foreign-mostly Chinese-demand for American homes.
CNBC reported that the dollar volumes of these homes from foreign buyers from April 2018 to March 2019 dropped 36% from the previous year, data from the National Association of Realtors showed.
It was evident in New York that the Chinese were pulling out, and the report only confirmed it. The decline was visible and was because of a drip in the number as well as the average price of these purchases. Foreign purchases of properties amounted to 183,100 and were at $77.9 billion, down from the usual 266,800 valued at around $121 billion from the previous month.
Many factors converged to contribute to the current situation. The world economy-not just economic growth abroad-have become slower, while China enacted policies meant to keep its currency flowing within the country. The stronger US dollar, as well as a low inventory of homes for sale, didn't help at all, according to Lawrence Yun, NAR's chief economist.
It might be surprising, but there's no one more to blame than US President Donald Trump for this outflow of Chinese buyers, among other foreign investors. The US housing market is currently facing dire conditions right now. Coupled with the Chinese policies, it's a recipe for disaster with the current unstoppable drop of Chinese and foreign investors in the housing market.
The Chinese, while involved in following their government's heeding for local spending, may also be souring on the current political stance of the US government. Real estate agents in California have seen the Chinese buyer pulling back. Prior to this, Southern California has been a haven for Chinese parents who are looking to send their children to American schools and colleges.
Carrie Law, CEO, and director of Juwai.com, a website popular with Chinese looking for homes abroad, had said that it had been the "Trump effect." It's a combination of the anti-Chinese stand of the government, a crackdown on visas being approved, and then, the imposition of tariffs on trade products.
It's not good making enemies out of potential clients, but so far, the Trump administration has yet to pull back on what it's doing. It has alienated the Chinese, and so far, disputes with Canada and Mexico have yet to show their after-effects.
