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One of the biggest questions we’ve heard recently is this: How could the current war affect the housing market?
When major global events happen, people start wondering how those changes might affect their finances, investments, and plans to buy or sell a home.
This is not about politics or opinions. Our goal is simply to look at the economic factors that can influence real estate and help people understand what might happen next.
Even though a war may be happening thousands of miles away, many people get “paralyzed.” They stay put, they don’t list their homes, and they don’t buy. They just wait.
That’s because global events can affect several economic factors that play a role in real estate, including:
- Interest rates
- Unemployment
- Gas prices, and the
- Cost of building materials.
These factors directly change how many people are actually buying and selling homes. In other words, the connection between global events and real estate is not always direct, but it is real.
How do global events affect local real estate? Since we specialize in the Central Valley and the Bay Area, we see a lot of people moving from San Francisco and San Jose. For these buyers, gas prices are a huge factor in their decision-making. If it costs significantly more to commute, that big house in the Central Valley might suddenly feel less attractive.
We also have to watch where the big money goes. If investors start putting their money into Treasury bonds because they want a “safe” investment during a war, interest rates will be the first thing affected.
The market usually reacts in one of two ways:
1. If interest rates go down. We might see a flood of buyers, similar to what happened during the COVID-19 pandemic. People will rush to secure a home while borrowing is cheap.
2. If interest rates go up. Homes will likely stay on the market longer. Sellers who must move might have to offer deep discounts just to get their property sold.
What does that mean for you? For those looking to move from the Bay Area to places like Mountain House for more space, higher rates shrink your “buying power.” You simply can’t afford as much house for the same monthly payment.
If you are considering selling, we are not saying it’s impossible. However, you must consider how these daily shifts in the market affect your bottom line. Things are changing day by day, and we keep our finger on the pulse of this data every single hour.
Every situation is different, especially in a market that changes day by day. If you’re thinking about buying, selling, or simply want a clearer picture of what’s happening in the market, reach out anytime.
You can call us at (209) 834-2680, or email ron@homebuyersrealty.com or homefinder@homebuyersrealty.com. We can walk through your goals and help you decide what makes the most sense.
