AP

How crazy is the housing crisis?

This week I spent some time with a group of Chinese multimillionaires touring America house hunting for bargains. They signed up for the $5,000-per-person trip through the Chinese version of Realtor.com, called Soufun.com.

Five thousand Chinese applied to go on these junkets, but only 512 of them were able to prove they have the money and the desire to buy. The first group, which I met up with, consisted of only 21 tourists, but was originally supposed to have 40. Many couldn't get visas in time. Some have never even been to the United States before.

"Most of these visitors are at the top level of society in China," says Osman Wei, Executive Director of the California Chamber of Commerce Foundation. Wei's group is hosting the tourists during their first stop, Los Angeles. From here they will house hunt in Las Vegas, San Francisco, Boston and New York.

Why buy here? "Because the housing market in China is going crazy in the last five or six years," says Wei, who adds that while prices in Beijing and Shanghai are falling, they're not falling as much as they are here. "The payback would be a lot better (in the U.S.) than what they can do in China."

The tourists include Yin Guohua, a lawyer from Beijing who is looking for a place where he can stay when he visits with his son. "My budget is about a half million dollars," he said through a translator. As he looked over a home in the Los Angeles suburb of Corona, he commented that "the prices are pretty good, but if they go down, they'll be better." Most of the tourists are looking to spend between $300,000 and $800,000. Some are searching for the lowest prices—especially in foreclosures—while others are interested in finding homes near good schools. Many say they may want to send their one-child-per-family to the States to be educated, and they'll need to find that child a place to live. One woman who helped organize the trip, Ting Yang, says she's most interested in looking at homes in Boston. Boston, as in Harvard and MIT. I wonder how you say, "Location, location, location" in Chinese?

When I asked Osman Wei if the banks owning the foreclosed homes might be concerned about selling to foreigners, he replied, "Actually, it's just totally contrary." He says he went to China in January, and local banks went with him to aggressively market real estate. "The banks are eager to sell the foreclosure property to just get the money back."

But just because the Chinese are here doesn't mean they'll buy. As two women toured a condominium in Pasadena for sale in the high $400,000s, one commented to the other, "It's so small."

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