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Is Earthquake Fear Driving Investors Out of SoCal?

Following the destructive earthquakes in Mexico this year, some investors are becoming concerned about a potential 8.2 magnitude earthquake hitting Southern California.

By Kelsi Maree Borland | Updated on December 14, 2017

Michael Koshet

Fear of an earthquake—or more specifically “the big one”—is starting to concern some investors. Some investors are actually trading out of the Southern California market or cashing out their portfolio out of fear that an impending earthquake will affect real estate values and cause costly damages. While this trend isn’t enough to impact the investment market here in a significant way, it is a concern that investors are factoring into investment decisions.

Some people are afraid of an earthquake. Everything looks great now, and we have no crystal ball, but we all know that we are over due for an earthquake. Many sellers are cashing out and moving out of state or moving their money somewhere else,” Michael Koshet, off-market multifamily specialist at KW Commercial, tells GlobeSt.com. “The closer that we get to 2018, the more that I hear sellers actually bring up the work earthquake in the conversion, or the word retrofitting. I feel like those sellers are taking advantage of where we are in the cycle and the pricing and selling their properties. I find that smart.”

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