Seattle real estate has recently been the target for a growing number of foreign investors, especially from China. While many of them buy houses or condos using all cash, first-time homebuyers in Seattle are finding it hard to compete.
"Most of the international investments are with cash. And they might seek to refinance later, but a primary objective would be to create that financial safe harbor," said Dean Jones, the principal of Realogics Sotheby's International Realty.
Real estate agents across the Puget Sound area share anecdotes of more and more Asian buyers looking at property on the east side. The population of Bellevue in particular, has grown from being 17 percent Asian to 27 percent Asian from 2000 to 2010.
Because buyers can list LLCs as the purchaser on a property, there is no definitive record of how many homes were purchased by foreign nationals.
But Jones can testify to the fact that 50 to 80 percent of the qualified buyers looking at luxury and waterfront properties on Seattle's east side are of Asian descent.
"I think this is just the beginning," Jones said, "If looking at the real estate in San Francisco or Los Angeles or Vancouver is any harbinger to come, it's going to be a very bright future for the Seattle, Bellevue metro area."
He said that Chinese buyers are most interested in creating a financial safe harbor, seeking a place to immigrate to in the future, and for those with children, finding good schools.
Some are also buying condos for their college-aged students to live in. Others buy properties to rent out or keep vacant as an investment.
Seattle's highly coveted waterfront views are enticing to this clientele, and a recent popular Chinese movie called "Beijing Meets Seattle" has also piqued interest in the area.
Because Seattle is still relatively more affordable than other popular U.S. and Canadian cities, Jones said, "buyers feel like they're on that first wave of discovery and that there's more to follow. And as a result, that sets up a very good business investment, as well as a lifestyle investment."
The trend has been helped along by stricter Canadian immigration laws that have prompted buyers to look south of the border into Washington.
This market is becoming so lucrative, firms like Jones' work with consulting groups to host seminars in China and tours in Seattle.
Banks like CITI have also established special units in the past few years to cater solely to affluent Asian clients who want to purchase U.S. property. CITI agents help the buyer through language barriers and understanding the legal process in a foreign country.
While this phenomenon focuses mainly on multimillion dollar properties, all-cash transactions, made by both domestic and international buyers also have an effect on less-expensive houses.
That's where first-time home buyers run into challenges, when they see that the already limited inventory is being snatched up.
Erik Heiberg and Elaine Eugenio have been house hunting for two years. They were outbid on their last two offers, even though they are doing everything by the book.
"We've tried the love letters approach. And that doesn't really do anything anymore, I don't think," Heiberg said.
In thinking back on some of the properties they've seen, Eugenio said she remembers one "closer to the Northeast side, that one house in Woodinville. And that was, we do know that was a foreign buyer, who came in with all cash."
She also remembers an open house where she overhead an agent say that there were already five pre-inspections and that someone would likely make an all-cash offer.
"It's kind of frustrating when you go and ask the other agent, well how close were we? And how many people put in offers? They say to you, you were really close. But somebody came in with a cash offer. And we're like, oh, we can't beat cash offers. There's just no way."
It may be tough for buyers, but it's a seller's dream.
Jones's team was hired in some cases specifically because they have such extensive connections in Asia.
"At the end of the day, the law of supply and demand is an international truth," he said.