Monday, November 25, 2019

Los Angeles Condo Sales Plunge: Is This the Start of the Next Recession?

Condo sales in downtown Los Angeles have plunged 31% in the third quarter from a year earlier, according to data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

No this is not about the start of a new recession.

It is all about unintended consequences of President Trump's trade war with China.

It is about Chinese cash drying up, reports Bloomberg.

Chinese buyers had made about 50% of the purchases in downtown Los Angeles in recent years, said Stephen Kotler, who oversees the western region for Douglas Elliman.

But now, notes Bloomberg, as the trade war between the U.S. and China approaches its second anniversary, Beijing is making it tougher to shift money abroad, imposing capital controls to help stabilize its currency. That’s weighed on the real estate market in cities including Los Angeles and Vancouver.