Will the impending financial meltdown in Europe affect our local real estate market psychology?
It’s not certain if they will let the disaster unfold – they might just employ more can-kicking devices. But if you see European countries going into full financial-crisis mode, and people rioting in the streets, will it change how you feel about buying or selling a house?
Some will say that mortgage lending will be impacted, but we’ve seen how the government has supported banks, and housing in particular, so there should be money available – at cheap rates!
If you look back at two crisis that were closer to home, 9/11 and the U.S. financial crisis of 2008, you’ll see we survived both fairly well.
A month after 9/11, the local housing market was right back on its tracks, though it was the initial stages of the boom years. The financial crisis during the last half of 2008 didn’t bring mass hysteria to the San Diego market – it’s been a general unwinding since.
Here are the detached and attached sales for the January through October periods of each year:
|Year||SD Co. Sales||SD Co. Avg. $/sf||NSDCC Sales||NSDCC Avg. $/sf|
In North SD County’s Coastal region, with a 5% dip in pricing, sales are 14% higher than they were immediately following the last financial crisis – which was closer to home. If anything, a world-wide financial crisis or resulting recession will probably cause more paralysis.
For there to be drastic movement in our local real estate market, sellers would need to panic. But because the government and banks insist on moderating the free market, there is at least a psychological cushion. It looks like we’ll just muddle through instead.