Sales Brochures for Buyers Back Home

Real estate developer Haruki Yamada does not think that there are any more affordable investment-grade homes for sale in Tokyo--or in Hawaii, Los Angeles or New York for that matter.

So Yamada recently established a U.S. operation in Orange County buying and brokering single-family homes as rental property and second homes to investors back home.

Consumers in Tokyo find Yamada’s advertising brochures stuffed into their morning newspapers under the name of Pacific International Real Estate. Color photos of typical Orange County homes stare out with descriptions written in Japanese.

One recent brochure promotes homes for sale in Laguna Niguel and San Clemente for prices ranging from $220,000 to $340,000 as company officials seek to lure Japanese investors with the promise of financial rewards several times greater than they are at home.

Yamada’s presence in Orange County is undeniably a sensitive subject as he seeks to divorce his firm from the image of rich Japanese speculators who have bid up housing prices to record levels in Honolulu. Yamada says his investors are not that wealthy and that the company does not overpay for properties.

“We’re very sensitive about being labeled as invaders,” said Kenny Lloyd, a senior vice president of Pacific International.

Yamada’s operation in Orange County is certainly atypical in that he’s buying property away from spots like east Honolulu and Manhattan, where wealthy Japanese have traditionally bought residential property.

At the same time, he is typical of a new breed of Japanese executives who have become international commuters, who work both sides of the Pacific and know the Los Angeles-Tokyo flying times by heart. Like many of his fellow travelers, Yamada has a second home in the friendly confines of the tony Palos Verdes peninsula.

Yamada’s presence here also underscores the wildly different perceptions that Japanese and Americans have about housing prices. Although they’re the highest in the nation, home prices in Orange County still look like a bargain to Yamada.

The median price of a resale home in Orange County has surpassed $210,000, up 24% in the past 12 months. In Tokyo, meanwhile, American-born real estate broker Ed Southwick owns a 1,000-square-foot home that, even with a recent drop in prices, is still worth about $500,000.

“It went up about 130% in two years,” Southwick said.

It is prices like that from which Yamada is fleeing. “South Orange County,” he said through an interpreter at his office in Newport Beach, “still looks like a bargain.”