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How Will Stock Market Volatility Affect Southern California Real Estate?

 In California Real Estate, Home Mortgages
California real estate market is strong

Southern California homebuyers and builders move forward with their plans despite a fluctuating stock market. photo credit: Frantik via Wikimedia Commons

Plenty of people are watching Wall Street right now, and speculating about whether this is just a temporary fluctuation, with memories of seven years ago all too fresh in their minds. Of course, back then it was the bursting of the housing bubble that caused the stock market to plummet, not the other way around. This time, the focus is on international markets, like China, rather than domestic banking institutions.

What does this potentially mean for the real estate market? The truth is, no one really knows for sure, but the more people panic, the worse the effects can be. For the most part, people seem to understand this, according to a recent LA Times article by Andrew Khouri, in which financial and real estate experts, as well as consumers, weigh in on the issue. The general tone of Khouri’s article is that people are listening and watching, but there is little reaction, as of yet, to the recent ups and downs on Wall Street. Consumers have obviously learned from the past, and realize that real estate is a long term investment, while stock market dips are temporary.

Another reason California homebuyers are tentative to let the recent financial headlines scare them away from getting into the real estate game is because it’s unclear whether China’s economic woes will be enough to even cause a noticeable effect. In fact, a couple of the experts Khouri interviews for the article predict that Chinese buyers, who have been steadily buying up residential real estate in southern California over the last several years, may be even more inclined to do so now, to get their money out of a rocky economy and into a more sound investment.

Other factors, like job growth in California, are enough to keep developers moving forward with their plans to keep building new homes as well. It seems cooler heads will prevail as Californians refuse to let a little market volatility discourage them from achieving their real estate investment goals.

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