Real Estate News
Los Angeles County Home sales and prices tumbled in January as the market reacts to the economic uncertainties of the coronavirus.
Home sales and prices dropped last month in Los Angeles County, and authorities think the worldwide onset of the novel coronavirus may have rattled the market, according to Patch.com. #coronavirus #losangeles
The county’s median home sales price dipped nearly 4 percent from December, the California Association of Realtors reported Wednesday. Statewide, the picture was even worse. California’s median single family home price dropped 6.5%. in a month. #realestate
CAR Chief Economist Leslie Appleton-Young said that the real estate market was rattled at the beginning of the year, like other markets, by the worldwide onset of the novel coronavirus originating in China.
“With interest rates on a declining trend again due to concerns about the impact of the coronavirus, motivated buyers will have an opportunity to stretch their purchasing power in the housing market,” she said. “The economic outlook, however, is less clear than a month ago, before the outbreak of the disease, and we should expect market uncertainties to continue to linger on for the short term.”
In the longer term, the biggest impact to the U.S. may come from the disruption to the world economy as a whole, and global supply chains in particular. South Korean automaker Hyundai has suspended production due to a shortage of parts, while Saudi Arabia has pushed for oil production cuts in light of reduced demand from China.
The California real estate market has been increasingly connected to events in China, as recently reported by the L.A. Loft Blog in articles about financing of OceanWide Plaza and Metropolis new condo projects.
The Real Deal reports on the topic: “The size of China’s economy makes it inevitable that a short-term slowdown will drag on global economic growth, with Asian countries and major trading partners likely to be most affected,” CBRE Greater China analysts stated in a report this week, noting that while improved transport infrastructure in China could contribute to the spread of the virus, advances in surveillance and big data should help efforts to control the outbreak. | BLOG VIDEO
But if the virus cannot be contained, then all bets are off. China, California and the entire U.S. will suffer.
“A coronavirus pandemic would be even more of a ‘black swan’ than the global financial crisis and Great Recession of 2008-2009,” Moody’s analysts warned in a research report last week, noting that the industrial metals price index has fallen by 7.1 percent since the risks of coronavirus first became apparent.
“It won’t just affect our market — the implications are huge, and we need to brace for the impact,” said Daniel Chang, head of Asia for the Field team at Sotheby’s. Chang recalled how business slowed to a crawl during the SARS outbreak two decades ago, when he worked as a private banker for HSBC.
Panic could end up being the more serious killer. In fact, some statistic infer that Californians are 9,000 times more likely to die of the regular flu than to perish from the recent covid-19 novel coronavirus outbreak.
While the coronavirus may have a bit of a scary effect on LA real estate, the effect is more of a minor catalyst to falling prices. As the LA Loft Blog has reported, the weakness in China, along with local economic pressures toward falling home prices in California had already begun well before the recent outbreak.
Related articles:
https://therealdeal.com/2020/02/05/inside-the-coronavirus-epidemics-impact-on-us-real-estate/
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