REAL ESTATE NEWS (Los Angeles, CA) — How is the California property market affected by the collapse of Silicon Valley, Signature and Silvergate banks? Frighteningly, there are likely more to come, including larger banks, as we will discuss in this article. The collapse of the small banks can have an impact on the property market in a few ways:
- Reduced availability of credit: Small banks often provide financing for property purchases, and if they collapse, it can lead to a reduction in the availability of credit for buyers. This can make it more difficult for people to obtain financing to purchase homes or investment properties, which can slow down the property market.
- Decreased competition: When small banks collapse, it can lead to a reduction in competition in the banking industry. This can result in higher interest rates and fees, which can make borrowing for property purchases more expensive. Higher borrowing costs can also lead to a slowdown in the property market.
- Distressed property sales: If small banks hold a large number of distressed properties, their collapse can lead to an increase in the supply of distressed properties on the market. This can put downward pressure on property prices and lead to a slowdown in the property market.
- Uncertainty and fear: The collapse of small banks can create uncertainty and fear in the property market, as buyers and sellers may be hesitant to make decisions in a market that appears unstable. This can lead to a slowdown in the property market as buyers and sellers wait to see how the situation develops.
Sketchy banks linked to FTX or other issues in the media — Here’s the list they don’t want you to know about:
Silicon Valley Bank
Signature Bank
Silvergate Bank
First Republic Bank ( FRC)
Credit Suisse
BMO Harris Bank
Customers Bank
Deltec Bank & Trust
LendingClub
JPMorgan Chase
Moonstone Bank
Wells Fargo Bank
Bank of America
Citi
Western Alliance ( WAL)
PacWest Bancorp ( PACW) …
This list does not necessarily mean that all of these bank have substantial financial difficulties. There may be other banks with a worse financial outlook. The list is not all inclusive.
Overall, the collapse of these small banks can have a negative impact on the property market, particularly in terms of reduced availability of credit and increased uncertainty. The Los Angeles real estate market has already been crashing for several months. Bank failures will likely worsen and prolong the LA. property market downfall.
How can we tell if the economy is severely impacted? There are several indicators that are commonly used to gauge the overall health of an economy. Here are some of the most important ones:
- Gross Domestic Product (GDP): GDP measures the value of all goods and services produced within a country’s borders during a specific period of time, usually a quarter or a year. It is considered one of the most important indicators of economic growth.
- Unemployment Rate: The unemployment rate is the percentage of people in the labor force who are unemployed but actively seeking work. It is a key indicator of the health of the labor market and can give insight into the overall state of the economy.
- Consumer Price Index (CPI): The CPI measures the average change in prices of a basket of goods and services over time. It is used to gauge inflation and can help policymakers make decisions about monetary policy.
- Housing Starts: Housing starts refers to the number of new residential construction projects that have begun during a particular time period. It is a leading indicator of economic growth, as new construction often drives job growth and consumer spending.
- Stock Market Indexes: Stock market indexes, such as the S&P 500 or the Dow Jones Industrial Average, can give insight into investor sentiment and expectations about the future direction of the economy.
- Consumer Confidence Index: The Consumer Confidence Index is a measure of consumers’ attitudes and expectations about the economy. It can be an important indicator of future consumer spending and economic growth.
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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker CalDRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.
