Most political scientists would agree that global politics will eventually affect a smaller local footprint, and the current Russian invasion of Ukraine may be beginning to affect the Pasadena real estate market.
While reports have emerged that some local realtors are seeing much fewer offers and stock market plunges have potential buyers hesitating, others say that despite the war in Russia, it’s still a good time to buy and sell local real estate.
According to realtor.com, mortgage interest rates, which had been expected to keep inching up, instead retreated slightly last week, according to Freddie Mac data. Stock and cryptocurrency markets, a source of funds to purchase property, also tumbled, said the report.
The report also noted, that “The already accelerated rate of inflation is expected to rise even further—hurting renters, buyers, and even builders who will continue to grapple with fast-rising construction costs”
“It’s all bad for the economy and housing. … It’s just a matter of how bad,” says Mark Zandi, chief economist at Moody’s Analytics. “There’s a number of different ways in which Russia’s actions will hurt housing.”
According to Market Watch, the 30-year fixed-rate mortgage averaged 3.89% for the week ending Feb. 24, down three basis points from the previous week, as reported by Freddie Mac last Thursday.
As local realtor Adam Bray-Ali, explained, from his perspective, it’s certainly not a question of Russian buyers in Pasadena, for example. Russian property buyers seem to focus on the Westside, he said.
“I personally have not seen an influx of Russian sourced buyers or people that are from Russia coming in buying homes in our community,” he added. “It definitely is different on the other side of town, meaning on the westside of Los Angeles and in the Beverly Hills, or Malibu areas, but we just haven’t seen that part of the market in our area.”
Bray-Ali calls the current situation, “another one of those headwinds that’s going to impact interest rates. It’s going to cause people to maybe be more cautious, you know, people that are buyers, do they want to go and spend a ton of money if there’s some instability, or if somebody has a job that’s connected in some way that they’re worried might get impacted by this, they might hold off.
“We have a very, very faulty market right now,” but he added, “It seems like it’s a little too far away at the moment.”
Local realtor Catherine “Tink” Cheney shared a more aerial view, offering, “I think I haven’t seen any reaction to that quite yet.”
For her clients, it’s business as usual, she said, noting, “I have some people who are considering writing offers and they’re proceeding, and I don’t think that it’s affected our community, yet. Obviously, it probably should, because, let alone the tragedies that are going on in Ukraine, people’s wealth as far as the stock market is very difficult at the moment.”
