By Sinead Cruise

LONDON (Reuters) - The super-rich investors responsible for London's prime real estate bubble are adding California to their wish lists, lured by bargains offering crisis-defying returns as an overdue churn in the United States property market finally gets under way.

Wealthy European and Asian investors who have dominated the market for addresses in London's most fashionable neighborhoods are frequently outbidding locals for assets in the Golden State, U.S. real estate brokers report - and banks, long shackled by the volume of distressed property on their books, are in the mood to cut deals.

"It is now London and Los Angeles, not Shanghai or Moscow, that interests the cash-rich international investor," said Simon Lyons, managing director of global property group Enstar Capital, who is making regular trips to the U.S. in search of bargains.

As uncertainty stifles global financial markets, real estate with strong rental prospects in key cities across the United States is again becoming an asset of choice for the yield-hungry international investor.

Data released this week by the National Association of Realtors showed that international sales reached $82.4 billion in the year to March 31, up from $66.4 billion in 2011.

The Chinese are now the second-largest foreign buyers of U.S. homes (behind Canadians), accounting for 11 percent of sales in the year to March 2012, up from 9 percent in the previous year. Cash purchases accounted for 62 percent of international sales and the average price paid by international buyers was $400,000, against the overall U.S. average of $212,000.

As the U.S. jobs market expands, there are signs that the worst may be over for the property market that spawned the sub-prime mortgage maelstrom and the world's deepest banking crisis since the Great Depression.

To capitalize on increasing confidence, Los Angeles-based asset manager TCW has unveiled plans to raise up to $250 million for a fund enabling wealthy investors to buy foreclosed homes from government agencies and lenders.

While lenders are still keen to avert foreclosures by extending loans, so-called distressed inventory is starting to sell because banks are now in a better position to absorb greater losses and free up capacity on their balance sheets.

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 for 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.

The 2011 Wealth-X World Ultra Wealth Report said that Asia Pacific has an estimated 42,525 ultra-high-net-worth individuals with a combined wealth of $6.2 trillion, and many are looking to park wealth in key Western cities to diversify their holdings.

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".

"The very existence of the euro zone is now in doubt, whereas investors believe that the U.S. is fundamentally stable," he said.

Parnes agrees. "From an investment standpoint, the view is even more positive: people are searching for returns which aren't available with other investments, and real estate yields are now looking very attractive, given recent price adjustments."

(Editing by David Goodman)