Chinese stock market woes impacting Bay Area real estate market
SAN FRANCISCO (KGO) -- The U.S. stock market isn't the only part of the economy affected by the slide in Chinese markets.
Bay Area real estate is seeing changes as well and that is both good and bad news for local home buyers.
"The Chinese economy has seen quite sharp drops in the stock market as well as general economic activity," said Ralph McLaughlin, the chief economist for Trulia.
The U.S. stock market has followed suit and the ripples are starting to hit the Bay Area real estate market.
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Mortgage broker John Holmgren says some of his local clients, who are relying on their stock portfolios for a down payment on a house are having second thoughts.
"We have a lot of clients, who are from the tech sector and they had stock options they were about to exercise that were in the money that would allow them to cash in and make a down payment. Now, not so much," explained Holmgren.
Those clients are either waiting it out or looking to relatives or creative financing to come up with the down payment.
And it's not just local buyers. Chinese buyers make up between six and 10 percent of home buyers in San Francisco.
"What we see is quite a decrease in the number of Chinese home seekers looking for homes on Trulia in San Francisco," said McLaughlin.
McLaughlin says hits from China are down nearly 50 percent so far this year.
If the market turmoil is affecting the mortgage side of the business, talk to a realtor and you'll get a different perspective
Anian Pettit Tunney at Grubb Realtors in Oakland says a downturn in the stock markets may have just the opposite effect.
"I believe people feel that real estate is a very solid investment that the markets can't take away from," said Tunney.
Nearly 38 percent of Grubb's clients pay cash for a home and that hasn't changed. In fact, Grubb says they haven't seen any changes.
Trulia says there is a slight slowdown in home sales in the Bay Area - especially in San Francisco, but prices are still high and it's still not affordable for many.
