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The United Kingdom’s withdrawal from the European Union - or “Brexit,” if you will - has had an effect on stock prices, gold, and government bonds. More importantly, though, it has also had an effect on real estate prices in the Bay Area.
The yield on the 10-year treasury has been tumbling ever since the Brexit. That, in essence, has caused lower mortgage rates. We’ve also seen an uptick in both home purchase applications and refinance applications, signifying a major increase in housing demand.
The other upside we see is foreign investor interest. The U.S. dollar is holding strong and proving to be a better investment than the British pound. Another thing that analysts are pointing out is that there may be a tech and real estate withdrawal from the United Kingdom, which would help the U.S. market in terms of job growth and demand for homes.
To conclude, the three effects the Brexit has had on home prices are lower mortgage rates, an increase of foreign interest, and potential job creation. All these signify increased demand and a very healthy scenario for real estate.
