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the downturn in the Shanghai Stock Index coupled with China’s currency devaluation is putting a crimp on the outflow of funds from China to the USA.
China’s investments in the US property market have been explosive, helping maintain health home price growth in select areas of the US.
Like San Francisco and Los Angeles where home prices have been rising despite median family incomes dropping.
The subprime boom in mortgage financing ended a while ago, with Chinese investors picking up the slack (particularly in the luxury segment of the markets). Central bank monetary easing across the globe has helped to facilitate higher housing costs in California relative to incomes.
So, will this mean “Big Trouble In Little China” (aka, California) for home prices?
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