How World Events Can Affect Local Real Estate Prices

Dated: March 2 2022

Views: 159

Man Reading A Newspaper


When we watch the news and see world events, it is perfectly normal and reasonable to be curious about how this will affect us personally. This should not be thought of as selfish, as it does not diminish the empathy we have for those much less fortunate than ourselves but it is natural for us to worry about the well being of ourselves and our families. With the current events unfolding in Eastern Europe, we would like to share some analysis of how this may change our local real estate market.

The Russian invasion of Ukraine is deeply disturbing to see on a number of levels. There has not been a war in Europe since WW2 which was probably the most cataclysmic event of the last century. The recent events while fortunately not at that level of severity, are still causing a massive amount of human suffering and we are highly likely to see some far reaching consequences. 

There are two main “levers” linked to the crisis which could directly change our local housing market:

Mortgage Interest Rates - The Federal Reserve (The Fed) had previously signaled an intent to increase interest rates in an effort to control inflation. The global response to Russia’s invasion has been to impose economic sanctions. As Russia is a major player in the global economy (particularly the energy sector) these sanctions are having wide ranging effects on global markets. Increasing interest rates could exacerbate this and cause more serious economic problems. As a result, we may see the Fed take a more cautious approach and delay the planned increases. This would mean home buyers would continue to have increased buying power and the sharp increase in property values could continue.

Market Sentiment - During times of uncertainty, we see people become more cautious. Many people are watching the news, their investment portfolios or retirement accounts and are unsure of how events may play out. As a result it is possible we may see buyers and sellers (either consciously or unconsciously) hold off on making any major decisions. This could cause a slowdown in the market and alter the dynamics of the supply and demand issue that has been the driver for increasing prices.

There are still a lot of unknowns and the phrase “unprecedented times” (which has become all too familiar over the last few years) applies to what we are looking at. We will continue monitoring the situation and provide updates and analysis if and when we see any impact on our local market. 

If you have any questions related to this or any other real estate issue, don’t hesitate to reach out to us by call/text (530) 553-8224 or email info@AllisonResidential.com

Blog author image

Nick & Brittney Allison

We are a Husband-Wife real estate team located in Chico and serving the wider Butte County area. As professional full-service Realtors, we are able to assist buyers, sellers and investors at all stage....

Latest Blog Posts

5 Tips To Maximize Your Home's Value.

As a homeowner, you want to get the most out of your investment. Whether you're planning to sell your home soon or just want to increase its value over time, there are several steps you can take to

Read More

Is a new construction home right for you?

Buying a new construction home can be an exciting and daunting experience, especially if you’re a first-time homebuyer. It’s essential to weigh the pros and cons of purchasing a new

Read More

Is it a good idea to buy a condo?

 Condominiums, or condos, are becoming an increasingly popular choice for homebuyers. A condo is a type of housing where an individual owns a unit within a larger building or community. In this

Read More

The Most Expensive Home Repairs

Owning a home is a significant investment, and maintaining it requires time, effort, and money. Over time, wear and tear on a home can cause various repairs to become necessary. Some repairs are

Read More