Will Russian invasion affect US housing prices?

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Real Estate

Hello there. I am Nagaraj Annaiah, your trusted realtor in the Bay Area. Here are the top realty headlines of the week before we get to the big story this week. Will the Russian invasion of Ukraine impact the housing prices in the Bay Area? While the stock market dipped, and the oil prices rose, the economic uncertainty is going to rise, but it will be felt more in Europe and much less in the US, according to economists. But before I dwell more on that, let’s look at the other realty news of the week. After six years of construction, sales have begun for the big housing tower near San Pedro Square in downtown San Jose. A stunning Sonoma wine estate has been listed for $7.75 million. It features a riparian garden, greenhouse, cabernet vineyard and tasting room. According to a study by Mercury News, California has 75,000 acres of idle school land, more than San Francisco and Oakland combined, that could be developed into affordable housing for teachers. Meanwhile, Santa Clara county officials approved $21 million in additional financing for a 110-unit teacher's apartment complex. The city of San Francisco has acquired land for the construction of 330 low-income units at 1979 Mission Street. Over $9.3 billion in office transactions were closed in the Bay Area, an 118% jump year-over-year, while prices were up 21% year-over-year to $505 per square foot. Construction begins on a $12 million mountain lion crossing on Highway 17 in the Santa Cruz Mountains. Judge halts 1650-home project in East Bay Hills for environmental violations. According to a new Realtor.com survey, 61% of owners plan to raise the rent by up to 10% on at least one of their rental properties within the next 12 months. Meanwhile, the National Association of Realtors points out that the existing home sales in the US rose 6.7% in January despite a lack of supply. Incidentally, the supply of homes for sale fell to a record low of 16.5% from a year ago.

And the big story for this week? Will the Russian invasion of Ukraine impact the housing prices in the Bay Area? You could jump to your favourite chapter, and view it right away. If you have any property-related query, let me know in the comments below. And if you are planning to buy or sell a home in the Bay Area, text me NOW. 



Will the Russian invasion of Ukraine impact the housing prices in the Bay Area? The jury is out on that, and it all depends on the extent that America gets involved in the Ukraine crisis. Experts contend that if the war continues for longer than it should, oil price rise could also trigger other casualties, such as shortage of materials and supplies, which could dent the construction activities in the US. But even more crucial fact is the lowering of consumer confidence, which could lead to people investing in safer havens, such as bonds, gold, and even property. Therefore, if we look at the realty market, the prices could go up further, and not come down. During the pandemic, the realty market recorded high prices. Will it be a return to the same heydays again in 2022 due to the Russian invasion remains to be seen. But the possibilities are quite likely. If American sanctions happen, experts believe that Russia could engage in cyber warfare. In such circumstances, what could be a safer haven than real estate? Therefore, if you have the money and want to buy property, you should have bought the house yesterday, or do it right now.



Mortgage rates hit new multi-year highs yet again. Although last week's average mortgage rates weren't significantly higher than the previous high, they were still the highest since May 2019.  The average 30-year fixed rate is now closer to 4.25% than 4.125%. Overall, mortgage rates continued to trend higher last week. Applications for mortgages dropped by 5.4%, while those for refinancing decreased by 9%, and those for purchases declined by 1%. Despite a decrease in home builder sentiment in January, retail sales increased 3.8%. Housing starts fell 4.1%, while building permits rose 0.7%. Existing home sales increased 6.7% in January, reaching 6.5 million.



MLS listings give us an indicator of where the market is headed every week. This is crucial information any home buyer or seller would need to make any progress in their transactions. Therefore, I continue to update you on the metrics to keep you up to speed on all things realty in the Bay Area. If we compare the five most happening counties in this region, there is much to be learned. Last week, the most sales happened in Santa Clara as there were 40% more active listings than San Mateo. Monterey, Santa Cruz and San Benito rank at number 3, 4, and 5 in that order. San Benito came last as it had only 18 new listings, but surprisingly 13 homes got sold. Usually, there are more 'pending' listings than 'sold' listings. Monterey recorded something similar to San Benito by selling 48 homes among the 72 new homes that were on the market. On the contrary, both Santa Clara and San Mateo sold less than what was available, making you wonder if it's a 'buyer’s market'. But like I said last week, sales are slow during winter. But don't be fooled as competition is quite fierce. If some houses are not being sold, it's because sellers want higher prices and the buyers want to wait it out. But let me tell you that the prices will only go higher; it's best to buy now rather than later. When I bought a heritage home a month later, I had to pay 10% more.

Coming to comparative market analysis of the five counties in Bay Area, San Mateo takes the crown this time for being the most pricey as the average price in February so far topped $2.49m compared to Santa Clara's $2.14m. Monterey's average sale price stood at $1.73m, while Santa Cruz's was $1.64m and San Benito was $925k. As far as the months of inventory is concerned, a house in Santa Clara was on the market for only 0.8 months, followed by San Mateo at 1.1 months and Santa Cruz at 1.2 months. Both Monterey and San Benito share a common figure of 1.4 months. If we compare the sale price to list price, Santa Clara sellers made the most profit at 113.1% followed by San Mateo at 109%, Santa Cruz at 104.3%, Monterey at 101.5%, and San Benito at 100%. Please do remember that these are average prices, and not every building will be sold above the list price, particularly if they are all-cash offers. But the biggest indicator of the competition is the number of days that the property has been on the market before it got sold. Here is where Santa Clara is clearly the winner at 14 days. The county is followed distantly by San Mateo at 24 days, Monterey at 26 days, San Benito at 27 days, and Santa Cruz at 31 days. All of this data will not only tell you the extent of the competition, but also the relative prices of properties, so you are better prepared when you enter the property market as a buyer or seller. And if you need a helping hand, call me. I have helped scores of clients land the best deals through my experience, vendor network, and trustworthy credentials. If you are wondering where to invest in each of the nine counties of Bay Area, watch my previous video whose link is in the description below. It's a must-watch if you want to own a piece of realty you would be proud of.


Will the housing market crash due to the Russian invasion? Highly unlikely. While some Americans might cut back on spending due to the economic uncertainty, many investors who have the money will actually invest in property. History is witness to the fact that during wars, people invest in safe havens, such as gold, bonds, and real estate. So if you are thinking of buying property, and have the money to boot, this is just the right time to invest in real estate. The market is going to remain competitive despite the Russian invasion. Therefore, take the help of a local and experienced realtor like me to seal the deal. Text me now!