Foreign investors have long been attracted by Bay Area commercial, industry and residential real estate. But that interest seems to be growing rapidly, especially among Chinese buyers. And that trend could have a very strong impact on housing prices in San Francisco, Silicon Valley and all around the Bay for years to come.

According to a recent survey by the National Association of REALTORS^®, foreign clients purchased $92.2 billion worth of existing U.S. homes in the year ending March 2014, up 35 percent from the previous 12 months. About half of these foreign buyers live outside the United States, while the other half are recent immigrants or here on temporary visas.

China accounted for the largest dollar volume of international sales with 24 percent of all dollars spent on housing in the U.S. In California, 62 percent of foreign buyers came from Asia. Although exact numbers are hard to come by, it appears that much of that investment is flowing specifically to Bay Area real estate.

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There area a number of reasons for the trend. The boom is partly because of globalization, but it also has to do with the rapid buildup of wealth in China, which had 2.4 million millionaires in 2013, up 60 percent from the year before, according to the Boston Consulting Group.

A recent article in the San Francisco Business Times noted a number of other reasons, including:

• The Chinese real estate market is overheated. A report by consultancy Knight Frank says that Chinese investors have set their sights toward the western world mostly because their own residential market has cooled significantly.
  
• Chinese companies have more freedom lately. Starting in 2013, Chinese companies could invest $1 billion abroad instead of just $100 million, the paper noted. Insurance companies could double the amount of their assets they put in real estate.
  
• U.S. and China got friendly and expanded visa limits last year. The Obama administration moved to extend visas for Chinese business people, students and tourists in order to spark investment. That’s helped open more doors for Chinese companies to open offices and for Chinese nationals to buy their own homes here.
  
• There’s been more matchmaking. The Business Times said Bay Area real estate developers have also received more help from city officials with finding Chinese capital partners.
  
• San Francisco has started to look more like Shanghai. The Times notes that China has more than 70 towers taller than San Francisco’s tallest building, the Transamerica Tower. But that’s starting to change as the Transbay district pops up, including one planned building that will be the second tallest in the city.



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