When Gabriel was exploring whether to buy a new townhouse in Lake City, the deciding factor wasn’t location, size, or even price. It was the rapid depreciation of the Chinese yuan and a safe bet on the strength of the U.S. dollar.
Gabriel, who didn’t want to share is full name, is a special kind of first-time home buyer. The only son of government officials in northern China, he’s come to Seattle to take community college courses in hopes of transferring to the UW next year to study computer science.
His new townhouse, like his new Jeep SUV and even his education, are like safe deposits for his family’s wealth: they can be used, enjoyed, and sold again without the fiscal accountability attached to a bank account back home. And with the added peace of mind of being fixed securely in U.S. currency.
These investments, often made in suitcases of cash brought over undeclared from China, are such common practice among the rising millionaire class that the government issued a crackdown this year on foreign currency outflow.
But rather than slow the offshore spending down, the Chinese are desperate to get their money out — and they’re sending it, along with their college-age kids, to Seattle.
China’s nouveau riche we love to hate
“Groups of Chinese tourists come to our downtown office waiting room asking to see a condo right away,” says Hong Beni O’Donnell, a Chinese broker with Windermere Real Estate.
O’Donnell, Shanghai native who has been working in Seattle real estate for three years, says that her team processes anywhere from three to eight transactions a week. For the cash buyers, she has closed in as little as 15 days, a lengthy process of inspection and negotiation that usually takes months.
The Chinese are the largest foreign property investors in North America, spending a projected $220 billion in U.S. real estate by 2020. A new tax on foreign buyers in BC and an ongoing devaluation of the yuan has brought many wealthy Chinese flocking to the Puget Sound region’s housing market, shooting Seattle to number one on the U.S. market for Chinese buyers.
“A house listed at $400k will immediately receive offers at $500k or higher.”
Many are buying property for their children to live in while they study.
“The parents I work with just want to expand their only child’s college experience out of the limited dorm and dining culture,” says O’Donnell, who notes that all the buyers she’s worked with have been purchasing property for their sons. “Daughters tend to still stay in the dorms, where they feel more protected.
While Seattle home prices have risen by 12.4% over the last year, prospective Chinese homeowners scared of losing their dream property are bidding at up to 20% over asking price.
“A house listed at $400k will immediately receive offers at $500k or higher,” says O’Donnell, who emphasizes that she encourages her buyers not to bid that high above the property value. “But sometimes the buyers really want the house and they will offer any value to get it.”
While the Chinese might be an easy scapegoat for putting home ownership out of reach of working-class Seattleites, O’Donnell says it’s the tech boom, not this semester’s incoming Chinese students that’s the real culprit in driving up prices.
“The city is just growing so fast with the success of the tech industry, with Amazon building it’s new headquarters downtown and the latest light rail extensions connecting Seattle to Renton and Kirkland, we’ll have lots of tech employees looking for places to live in the city.”
Chasing a “golden future”
There is even a Jersey Shore imitation reality TV show called Ultra-Rich Asian Girls (“公主我最大”, or “I am the biggest princess,” in Chinese) with a big following among Chinese international students.
But unlike the petty opulence of these few billionaire kids, most Chinese students in Seattle have chosen this city for its simple, cheaper lifestyle and down-to-earth personality, far from the opulence of their compatriots in bigger cities.
Reality shows like “Ultra-Rich Asian Girls” play off stereotypes of the nouveau riche, but are nowhere near most international students’ situation.
“The really rich Chinese kids don’t come to Seattle, they prefer New York or Los Angeles where they can make contacts with other government officials’ children who they will make deals with when they’re back home,” says Rita Yu, 22, a 2016 UW-Bothell graduate who rented from a fellow Chinese student in a new apartment complex in Cedar Park.
Public American universities like the University of Washington are taking advantage of the influx of wealthy international students who pay full out-of-state tuition and increasing international admission rates. The Chinese remain the largest demographic amongst international students across the U.S. as well as at UW, where Chinese international students were the recent targets of a tuition scam.
Like thousands of other Chinese teenagers, David Feng, 19, came to Seattle on a leap of faith, attracted by the opportunity to create a life for himself in America and get a different kind of education.
“Here in the U.S., students are encouraged to think and work independently rather than to simply follow the professor’s instruction, like we do in China,” he says.
Feng is one of dozens of fresh-off-the-boat Chinese teenagers who have come through my mother’s shared-wall townhouse in North Seattle over the last decade.
The parents — old high school classmates or neighbors of my family back in China — send their only son or daughter to pursue an American college education under the careful guidance of my mother, whom they call “Professor Zhao,” even though she’s never taught a class in her life.
For middle class internationals like my mother’s new student, buying a house or even a car is out of the question. Feng hesitates even to buy a used road bike. If his parents didn’t live in the same apartment building as my aunt in Guangdong, he would probably be studying at a free university in China.
Those without personal connections in the U.S. come to Seattle through Chinese companies that facilitate international study, usually at great financial cost.
Sylvia Zhao, 22, a 2016 UW summer graduate in mathematics and economics, paid $3,000 to a company called Jinjilie, roughly translated as “golden future,” to help her enroll in North Seattle College, where she took ESL classes and eventually transferred to the UW. For direct acceptance to the university, she remembers companies charging prospective students as much as $8,000 for their college prep services.
Why the Chinese stick together
Despite big differences in socioeconomic class, Chinese students tend to live with fellow international students for cultural and language reasons.
“Americans like to have house parties and bring new friends over a drink, while Chinese people only invite close friends or family over to their homes,” says Feng.
Chinese students tend to find other Chinese roommates and renters through the messaging app WeChat. Group chats with up to 500 members help students find rooms for rent, buy and sell cars, books, and used furniture, and even give tips on where to eat out in Seattle.
Chinese students believe their preference for renting within their community may be mutual.
Zhao recalls an American renter who refused to lease rooms in his house in the U District to her and a fellow Chinese student, implying that he preferred renting out to American students.
“Many Americans don’t like Chinese people to cook too much in their homes, we use a lot of oil, fire, and spices in our cooking – and we cook a lot!” says Zhao.
Colin Shan, a UW graduate who also rented from a fellow Chinese student during his studies in Seattle, has lived in the States for eight years but “still finds [it] hard to join conversations on topics like movies or music.” Americans are more extroverted, while Chinese and Korean students gravitate towards each others’ strong family values, love for food, fashion, and soap operas from back home.
Making Seattle home
Another reason Chinese parents are comfortable buying new homes for their international student children is that many are looking to settle down in Seattle after school.
Zhao’s parents, who run their own filtration equipment company, covered her tuition, but could never afford to buy a house in Northwest. Zhao worked part-time jobs throughout school to pay rent and dreams of buying a house in Seattle in the next couple years once she’s saved up enough money working full-time. She believes she has better chances in the American job market than back home, where good jobs are often limited to those with family connections.
Whether new homeowners or poor college kids, these Chinese students may live, eat, and hang out within the international community, but they see Seattle as home.