Real estate agent Eric Koh has been extremely busy working with investors who recently came from South Korea. His main duty has been to explain the U.S. real estate regulations on top of introducing the available properties to the buyers.
“I get inquiries regularly from people in Korea as they want to invest in real estate in this country,” Koh said. “This is a trend that didn’t exist until last year.”
As the real estate market has stumbled in recent months due to the rising cost, investors from Korea are steadily becoming a boost for many of the Korean-American real estate agencies. The trend of Korean interest in U.S. real estate started from last spring.
“The inquiries in Korea have definitely increased recently,” said Dream Realty manager Simon Lee. “We not only get calls from Korea. We’re also getting visitors as well.”
The South Korean won has been going strong in the currency market as the cost of $1 USD is now down to 1,100 won, which has triggered investors to expand their interest to overseas markets. Also, the South Korean government’s clampdown on its own real estate market has also driven some of its investors to look outside of their country. As both the inflation of the stock market and North Korea’s missile threat has unsettled many South Korean investors to spend money in their own country, they are now looking at U.S. as their investment target.
“My children are attending school near L.A.,” said one of the South Korea-based investors who recently visited the U.S. “I’m looking for a home that I could invest in as well as a place for my children to live in after their graduation. Korea is largely unsettling these days, so many people there are showing interest in investing in U.S. real estate.”
In fact, South Korean real estate firm JNJ Partners has recently laid out plans to hold a tour for visitors in L.A. in a partnership with Dream Realty. The Korea Financial Investment Association has also revealed that South Korean buyers invested $262 million overseas last year between January and July, but during the same time frame this year, that figure has soared to $426 million.
It is estimated that this year’s investments from South Korean real estate investors will rise to over $441 million. Oftentimes, overseas investors from South Korea head to the U.S. or Australia. For example, both KB Financial Group and Hyundai Investment started their own investment fund programs since August this year.
“We held a U.S. real estate introduction seminar in Korea in partnership with JNJ Partners last July,” said Lee. “The interest in the U.S. market was immense in Korea. That’s why we’re now planning an L.A. real estate tour for them. A group of investors will soon be in the U.S.”
Many South Korean investors are currently preferring Irvine and La Crescenta, both of which have a sizable Korean community with quality schools for the children. Their preferred price range is between $600,000 and $1 million.
For business investors, many are expressing interest in franchise restaurants and coin laundromats, as those usually provide stability over high return that comes with a high risk.
“Korean investors usually prefer locations that have already been popular among other Koreans,” said Keller Williams Realty agent Dae-young Hur. “They often look for homes that are $1 million or lower. Many of them consider expensive homes not only because those are high in cost, but also too big in terms of their sizes. Korean investors are now more informed than ever before about the American market. Many of them didn’t even know what kind of city Irvine was back then, but many of them are knowledgeable about the market now.”
Hur added: “There is little to no investment from those who have no personal relation to the U.S. They either have a family in the U.S. or have lived here before. Many of them also look for business opportunities in addition to shopping for their homes.”
By Hyunwoo Kim
