Some of the same European and Asian wealth that's been buying up London real estate at crazy-high prices appears to be focusing on Southern California. Sales by foreign buyers in the U.S. reached $82.4 billion in the year to March 31, up from $66.4 billion in 2011, according to a report from the National Association of Realtors - and California was second only to Florida in activity. From Reuters:
David Parnes, a director at Bond Street Partners, a Los Angeles-based realtor specializing in high-end luxury and investment property, said that Los Angeles is enjoying its biggest influx of foreign capital in years. "Investors are now snapping up foreclosures in greater numbers because comparatively low property prices mean they are able to achieve strong returns," he said. "Prices in L.A. are showing to 60 to 70 percent discounts against their equivalent in Manhattan." Parnes points out many reasons to explain why the world's super-rich are making a beeline for California. The state is the financial hub of the U.S. West Coast, with Los Angeles already home to the highest number of foreign-born billionaires and Fortune 500 company CEOs outside New York.
European ultra-high-net-worth entrepreneurs active in Asia's fast-growing economies are also acquiring bases on the U.S. West Coast to benefit from reduced travel times to the region and time zones better suited to those business interests. In Silicon Valley, Russian billionaire and Facebook backer Yuri Milner shelled out $100 million in March 2011 on one of the most expensive single-family U.S. homes ever sold. Moscow-based Milner is expected to use the French Chateau-style mansion as his second home, Parnes said. Adam Fenner, an executive at California's Skyline Wilshire Investment Partners, which sources overseas capital for high-quality US real estate operators and funds, said that overseas investors are again viewing the U.S. as "a safer haven"