September 4, 2015
HOW STOCK MARKET SLUMP IS GOOD AND BAD FOR REAL ESTATE:
Excerpts from an article in Inman by Brad Inman:
- The slumping stock market could put the brakes on interest rate hikes that were expected this September.
- Real estate is perceived as a safe haven for investments when stocks falter. When their home economies are shaky, foreign investors will look to purchase in cities like New York and Palo Alto.
- The biggest danger is when stock market woes portend deeper economic woes which is bad for housing.
- Wall Street research firm Zachs reported, “Consumer confidence is a major consideration when people purchase durable goods and real estate. Few people are likely to commit to a big mortgage payment if they feel that their economic future is uncertain. When the stock market retreats and the value of portfolios declines, investors are impacted psychologically.”
- Real estate with exposure to commodity markets like land in oil-producing areas is likely to mirror falling oil prices.