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Real estate is doing well. It's still coming on strong after the '08 ditch. Interest rates are low and demand is still strong. When the stock market tops out, p
by joshuaheard 9y ago
Real estate is doing well. It's still coming on strong after the '08 ditch. Interest rates are low and demand is still strong. When the stock market tops out, people will take their money out and buy real estate causing another rise. Eventually it will fall again. It seems that there is an 8-10 year market cycle, so it should be topping out soon. A rise in interest rates will be the leading indicator.
- zhjansbnas 9y ago>When the stock market tops out, people will take their money out and buy real estate causing another rise. If I understand correctly, you are saying that market sentiment that the stock market has reached its peak will result is real estate prices increasing. That’s a very optimistic take. When market sentiment thinks the peak has been reached, people start selling and you get a crash. Everyone can’t sell at the top. I don’t think most people buy homes based on a guess of the stock market cycle. I think a more realistic model is: people sell stock and buy a house when it makes sense for their life and they can qualify. They take money out of the stock market (often a 401k) for the down payment and use it to meet reserve requirements. If the market crashes, people won’t be able to afford as much house and prices will drop. If the stock market keeps going up, that will continue to be one of the factors supporting home prices.
- Amygaz 9y agoJust to give a different perspective on the 'real estate is doing well', while still supporting your final point: the total mortgage debt in the US is $13 trillion, which is a quarter of the total US bond market,