To say people around the world were surprised about the United Kingdom’s vote to leave the European Union would be an understatement.
People weren’t just surprised about the result of the June 23 referendum – they were shocked, and the global markets reflected that. U.S. markets experienced the biggest two-day fall in nearly a year, before stock levels largely returned to normal within a few days.
But real estate is one U.S. industry that isn’t seeing a big impact amid the uncertainty surrounding the U.K. and EU. In fact, it may prove to be an additional boost for an industry that’s slowly pulled itself out of the hole created by the subprime mortgage crisis that began in 2007 and is now quickly gaining more ground.
External factors – both domestic and foreign – rarely have an immediate impact on U.S. real estate. While stock markets react quickly to news, real estate transactions often require, or at least encourage, due diligence before a sale is completed, so recent events won’t impact scheduled transactions. And with the ebb and flow of different parts of the industry, including lending, buyer demand and seller inventory, struggles in one area can be offset with successes in another.
Even in the U.K., real estate transactions continued as usual in the immediate wake of the historic vote, also called Brexit. But there have been some signs of investors looking to offload British commercial real estate assets, and an economic downturn in the country could hurt the housing market. Simon Calton, CEO of Rycal Investment Group, an investment advisory company based in both the U.S. and U.K., expects to see effects of the decision on real estate within about six months.