While stock markets in the U.S. have been more than a little volatile the past month or so, the dip has been nothing compared to China. The Hong Kong Hang Seng index is down more than 21 percent so far this year and more than 38 percent from its 52-week high. So what impact will troubles in the world’s second largest economy have on the U.S. housing market?

A recent article in Realtor.com, the magazine of the National Association of REALTORS®, said the shaky Chinese market may be a double-edged sword for real estate here at home.

On one hand, Chinese buyers have been one of the major drivers of the Bay Area real estate market, and tough economic times could mean less competition from those offshore investors, “possibly cooling some markets and making a wee bit of room in inventory at least in the luxury market,” the article notes.

But at the same time, there continues to be a very strong desire by the Chinese to invest in the U.S., which is still seen as somewhat of a “safe haven” when compared with their domestic market. While an extended financial crisis certainly could bring a chill to U.S. real estate, the current uncertainty in China may actually encourage more investment in some U.S. markets, the magazine reports.

“Interest in luxury tower apartments, as well as larger commercial real estate opportunities, is likely to even increase as China’s millionaires seek safe investments and higher returns in the United States,” Realtor.com noted, quoting a report in the Epoch Times, a Chinese news service based in New York.

While the Times comment referred specifically to New York, I think the same may be true for the Bay Area. It would not surprise me at all if the Chinese stock market meltdown may actually encourage Chinese corporations and wealthy individuals to seek refuge and better returns in major U.S. commercial and residential markets like San Francisco, Los Angeles and elsewhere.

Additionally, I think we need to keep in mind that offshore buyers have one been one of many factors driving our local housing market. Our robust real estate market is fundamentally the result of a very limited supply of homes for sale, coupled with an incredibly strong demand from buyers who want to jump in while interest rates remain near historic lows.

Add to that the fact that the Bay Area continues to have one of the strongest economies in the nation, with steady job creation in the high tech, biotech, social media and investment sectors, and that all adds up to many well-capitalized buyers chasing too few properties on the market.

My sense is that a slowdown in Chinese investment, if it happens, will not likely change the dynamics of our housing market unless the world’s second largest economy worsens and leads to an overall global economic slowdown – including here at home. But most economists don’t see that happening.

Below is a market-by-market report from our local San Francisco Bay Area offices:

North Bay – The San Rafael area market still appears to be holding off from the spring and early summer activity. The remaining Marin schools will be in full swing after the Labor Day Holiday. With interest rates still low and a shortage of new listings we are expecting the late summer and fall selling season to be brisk.  This is the time for buyers to make their move and get ahead of the competition. A continued upswing in activity is resulting in more properties going into escrow in the Santa Rosa area. We are continuing to see multiple offers while simultaneously seeing price reductions, which indicate that there is demand for high quality well priced properties, but properties that are not priced correctly will not sell until the price is corrected. School has started in the Sebastopol area, and as expected activity has slowed down this period. The Southern Marin market has slowed this summer from the peak of activity that was February through May. This is due to both low inventory and buyer hesitation. We expect to see more activity after Labor Day. The Previews market pace of sales has slowed this late summer, which is seasonal and expected. However, we have a number (6-8) of Previews properties coming onto the market after Labor Day. The demand for desirable “trophy properties” remains strong and we expect an active market for luxury properties until the end of 2015, with a slow down during the holidays.

San Francisco – The volatility in the stock market has created an atmosphere of tension, according to our Lakeside office manager.  Some properties expected to sell immediately with multiple offers have seen their offer date come and go in silence.  Yet soon after have received one or two offers and sold over asking.  Some have received quick preemptive offers and those that came on overpriced remain unsold.  Whether this is a transition to a different market or a momentary end of summer hiatus we will know in a couple of weeks. Our Lombard office manager reports a slow pre-Labor Day period with a lot of people away. Most signs indicate a good listing surge in the next couple of weeks.

SF Peninsula Inventory is in the wings being prepped and ready start the fall market after Labor Day, our Burlingame manager says. It’s fairly quiet but with great buyer attendance at open homes and anticipation of future listings. A beautiful new listing in Hillsborough, 1.27 ac. flat lot with pool and tennis court, 7,675 sq. ft. listed at $9.870 mill. The unique and/or homes in most desirable locations are still receiving multiple offers with significant overbidding, but in most cases with a lesser amount of competing offers, according to our Burlingame North manager.  Curiously, a very small amount of homes have had a lot of interest based upon the number of disclosure packet requests, but no offers.  Noticing a significant increase in the reliance on price/sq. ft.  Across the hills in Half Moon Bay, the local market seems to have slowed down for past couple of weeks, perhaps due to back to school. Seasonally low inventory high demand in the Palo Alto area. A basic 2/2 home on a 7,500 square foot lot listed at $3,400,000 and sold for over $4,000,000! In the Redwood City-San Carlos area, there still is a fair share of multiple offers but the number of offers has diminished. Our office had a Millbrae property that had six offers and went close to $400,000 over list. There’s definitely a lack of townhouse & condo listings.

East Bay – August sales in Berkeley slowed, which is typical. Most sellers are waiting to put their house on the market in early September.  Listing agents saw offer dates come and go without any activity, only to be flooded with phone calls after and still received multiple offers. Buyers are still very active but inventory is slim pickings. Open house activity has been a little slower than normal in the Oakland/Piedmont area, but most everything is selling and with multiple offers still.  More inventory appears to be on the horizon after Labor Day and we’re looking to see how that will affect prices, if it affects prices.

Silicon Valley – Lots of agents are still traveling, according to our Cupertino manager. Things seem a bit quiet, but hopefully that is just a pre-Labor Day lull. Los Altos hills – high-end inventory over $13M coming off MLS, or just sitting there. Under $7M still seems to be selling with price concessions. Under $4M, usually still multiple offers, if lot is fairly flat and house at least 4 bedrooms. The low end still moving well. Los Altos – north Los Altos is still hot, and inventory very tight. Some weakness in south Los Altos, if priced at last sale. If priced at low listing, houses are still selling with multiple offers. Mountain View – some extra inventory, but may get all sold within a month, if no new inventory, as demand is still high. Sunnyvale – all the new inventory still keeps getting sold every week. The market in Los Gatos continues to remain strong even though there has been a lot of chatter regarding interest rates and the stock market. San Jose-Almaden agents were expecting the “back to school” slowdown, which happened in the 2nd week. Our office had a strong first week of sales then a slowdown with listings and sales in the second week. Same story with multiple offers; they’re coming in but more around the 2-3 range. Willow Glen active listing inventory continues to contract week by week. The word on the street is all the new inventory is coming after the Labor Day weekend. We have definitely experienced the late August seasonal slowdown, however agents still had a steady number of new open escrows this past week. Buyer traffic at open houses was brisk this past weekend as well. All eyes are on the post Labor Day weekend as we move into the prime fall selling season. In the Saratoga area, inventory is decreasing, especially for class 2 properties. But there has been some better activity in the high-end segment.

South County – As the summer has come to an end, many potential buyers are concentrating on back-to-school activities.  South County agents are reporting that attendance at their open houses is way down from previous weekends.  It seems that many buyers have decided to postpone their home buying decisions until perhaps next year.  Homes in both Morgan Hill and Gilroy (in all price ranges) are remaining on the market longer.  The recent “buying frenzy” that was fueled by low inventory has all but gone away.  Buyers simply have more choices and, in some cases, are content to wait for more houses to come on the market.  In addition, the recent and rapid increase in asking prices has led to some “buyer fatigue.”  Many buyers were simply tired of being part of multiple offer situations and have now elected to wait until the market becomes less volatile.

Santa Cruz County – Inventory of homes for sale in the Santa Cruz area has decreased from June to July and July to August. The number of sales decreased from July to August by approximately 25%, however we anticipate that September may see an increase after the Labor Day holiday. We have seen a significant slowdown in number of Previews property sales, down almost 50% from July to August.  The inventory has increased slightly and the average days on market has increased.

Monterey County – The energy and hype of Car Week has somewhat subsided and we are back to our regular pace on the Peninsula. We made several contacts and had several showings throughout the week that will hopefully result in future sales. We have five over $5 million listings new on the market and they are getting much attention and showings. We have several new listings that will be coming to market within the next two weeks. Hopefully this will satisfy some of the buyers and sellers looking to relocate before the holidays.

Market Watch is a bi-weekly column by Coldwell Banker San Francisco Bay Area president Mike James.  Click here to view past issues.