Published 4:25 pm, Friday, July 8, 2016
A: Britain’s decision to leave the European Union (a.k.a Brexit) has affected many assets like government bonds, gold and the stock market. But for us here in the Bay Area, the most important question is what will be Brexit’s effect on Bay Area real estate prices.
One quickly felt effect of the move was to send the yield on the 10-year Treasury tumbling. That is likely to put downward pressure on mortgage interest rates. Uncertainty before the Brexit vote was the most likely reason the Federal Reserve decided not to raise interest rates in June. Low mortgage interest rates pushed even lower by the Brexit decision will result in even more demand for housing in the Bay Area.
The uncertainty about the United Kingdom’s future and its economy is likely to add to the demand for housing here in the Bay Area. Many investors are ready to look at the U.S. — including the Bay Area — as a reasonable alternative to the London real estate market.
An additional effect of Brexit is that many analysts have started to speculate that firms in the tech and financial sectors are likely to leave if Article 50, the grounds for the United Kingdom’s divorce, is activated.
So the Bay Area could be looking at even lower mortgage interest rates, increased demand for real estate from foreign investors and potential job creation — what’s not to like?
Jeffrey LaMont, Coldwell Banker,
(650) 740-8808m email@example.com.
A: Britain’s exit from the European Union seemed to catch the world by surprise as stock markets plunged amid fears of worldwide economic instability and disaster.
Some local deals even fell apart due to wariness from conservative investors. Is it founded? Only time will tell how all of this will shake out.
The refinancing market seems to have taken a jump due to a drop in interest rates and market unrest. It appears that the lending and refinancing markets are enjoying some low rates, and they need to have some attention paid to them for the benefits they can offer. In other words, it’s worth looking into a refinance to see if it makes sense.
Some believe Brexit will benefit the high-end real estate market, which seems to have slowed a bit.
The commercial market may reap the best benefits in dollars being moved into domestic investments, and the interest rate movement is interesting to watch.
It seems as if the shakeup is not too horrifying at this time, but the real question is what’s next?
This situation may take some time to figure out, so the repercussions are most likely not known for some time. But, honestly — who knows?
Pacific Union Real Estate,
A: Britain’s historic decision at the end of June triggered negative economic ripples throughout the entire world, and the United States was not an exception.
Domestically, stock markets showed a negative performance the day after the Brexit announcement. Generally, such economic news leads to uncertainty, directly impacting the real estate market.
The performance of this segment slows down with declining sales. Brexit news, however, does have a positive outlook for the Bay Area real estate market. Soon after the votes were counted in Britain, the mortgage rates were driven down from an already impressively low point, creating an even more favorable environment for local home buyers.
At the same time, international investors are becoming increasingly interested in the Bay Area job sector and its real estate market, which offers a sustainable environment and a strong projected growth. As always, time will show the true effect of Brexit on Bay Area real estate, which historically has shown constant appreciation in the long run.
Vanguard Properties, (415) 385-5595, firstname.lastname@example.org.