Greece has been in the news quite a bit lately, but during the same time frame, China is also collapsing. In the past 3 weeks, The Chinese Stock Market has lost 1/3 of their value.
Think about that? That's a third of the wealth...gone.
While I'm not an economist, I know that this is a serious concern for the rest of the world. As this is still a fresh situation, the consequences have not shown themselves in my neighborhood, but unless this turns around, it will.
Economists have been warning that the Chinese Stock Market was showing signs of a "bubble." The increase in stock values have become unrelated to the Chinese economy with fortunes being made in day trading with no real relationship to earnings and profit.
As I'm reading this news, I can't help but wonder how this could affect the Orange County, California real estate market. In California, Chinese account for a third of the foreign home buyers. Chinese investors in the US real estate market has grown from $50 million in 2000 to $14 billion in 2013....that's a huge jump and growing.
Our local real estate prices have benefited from this investment. Home prices in Southern California have been steadily rising and it's rare to have a listing which does not see at least one offer by a Chinese National. These are great buyers also, typically paying cash and closing quickly.
Some cities, such as Irvine, are very desirable by these Chinese buyers and have seen their properties increase in value significantly higher and faster than their neighbors just 10 miles away. If this foreign money slows down or dries up, the Orange County real estate market would naturally feel the results and I would expect property values to drop.
While I feel for the Greek people and their European friends trying to solve their debt problem, I think the real attention should be placed on China and the looming problem of an inflated stock market and it's affect on the world economies...and our real estate market.
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