Economic turmoil abroad may help U.S. real estate market
11/7/2016 | Real Estate Blog
Commercial real estate investors in Pennsylvania might pay attention to changes in the economy that can affect real estate markets. Now that the economies of foreign countries are so interconnected, changes around the world can influence real estate markets in the U.S. Though there is a lot of global volatility right now, many real estate analysts believe that the commercial real estate market in the U.S. will stand to benefit from the economic uncertainty in other nations.
One of the main sources of economic uncertainty abroad right now is the United Kingdom’s decision to leave the European Union. The impact of the ‘Brexit” decision was felt immediately in the U.K. as the value of the pound dropped to a 31-year low, stocks went down and investment funds froze trading to prevent mass withdrawals. Over time, the U.S. may feel an impact from Brexit as foreign real estate investors move out of London and move into more stable real estate markets in the U.S.
Economic uncertainty in China is already having a significant impact on the U.S. commercial real estate market. When China’s stock market began to decline last year, Chinese investors started purchasing real estate in the U.S. even faster than they had been purchasing it before. Some analysts say that a bubble in the Chinese real estate market is soon to burst, and Chinese investors may start buying even more property in the U.S.
Real estate developers could benefit from these trends by selling some of their properties to foreign investors. However, selling commercial real estate to a person or company in another country can be a complicated undertaking. It may thus be wise to obtain the assistance of an attorney who has experience with these types of commercial real estate transactions.