Agreed, alot of variables jumbling around. Interest rates and the credit market impact the real estate market for sure. New article came out that San Francisco had the highest # of listings and price slashes in the last 7 years. Things are flattening out for sure. Those that have properties with good debt on them and collecting rental cash flow will be like just another day in the office. Finding new properties and debt to acquire them will be a fun and crazy ride.
@Account Closed I love days like today because they create so many great buying opportunities, In every down financial market people are making millions just like they do in Real Estate regardless whether the RE markets are up or down.
Keep in mind that on days like today there are also stocks that are gaining 20%, 30%, 40% in value, every Index that listed major losses also had major gainers.
Also while the index averages are down, a lot of individual stocks barely took a hit, my BofA stock saw a .74 cents decline, my Wells Fargo was down 1.11 This isn't a bad day if you bought right just like a down RE rental market if you bought right. Full disclosure some of my other bank stocks took slightly larger hits but nothing more than 2.43 per share.
As a percentage, we didn't even have a top 100 drop in the stock market. For instance, the great recession had multiple days over 7% drop whereas today was 3.15%.
@Account Closed I love days like today because they create so many great buying opportunities, In every down financial market people are making millions just like they do in Real Estate regardless whether the RE markets are up or down.
Keep in mind that on days like today there are also stocks that are gaining 20%, 30%, 40% in value, every Index that listed major losses also had major gainers.
Also while the index averages are down, a lot of individual stocks barely took a hit, my BofA stock saw a .74 cents decline, my Wells Fargo was down 1.11 This isn't a bad day if you bought right just like a down RE rental market if you bought right. Full disclosure some of my other bank stocks took slightly larger hits but nothing more than 2.43 per share.
While that may be fine for individual investors, most people have a 401(k) invested in a Mutual Fund. I can't believe they would be happy. Also, for those already invested in the Market, there isn't extra money they have to use this as a buying opportunity.
As a percentage, we didn't even have a top 100 drop in the stock market. For instance, the great recession had multiple days over 7% drop whereas today was 3.15%.
I have money in a TSP and it's going down, but I'm not retiring for another 15 years. I also have been getting beat out by chinese investors in Phoenix for the past year, and I'm sitting on a larger pile of cash than I'm used to. I hope I might actually be able to enter the San Diego market again if things take a dump.
Dont be so smug. The thing that fueled the 10 year bull stock market also fueled the big rise in RE price.
Artificially low interest rates. All to protect the previous administration lousy handling of the economy. Someone has to pay the price for these shenanigans.
Prudent buyers wont notice as rents will keep flowing. People who buy low down brrr and over do multis -good luck.
The days of the wind being at the back of investorS is over. That you can bank on. Bad operators will not make money they will go Bankrrupt. Newbies who accidently made money flipping will go bankrupt.
Stocks are not bad per se. No need to hate stock market.
Corrections are a B*thch - wait this is a family website, Corrects are painful. Let's go with that.
@Mike M. Ugh I was proud of myself for staying off BP most of today, then I come on here and see this. I’m glad it dips, buy more. Long term this is nothing
It isn't you savvy investors I worry about, you will take care of things. Most investors are workaday people with 401(k)s invested in mutual funds that they were told are "safe". That my friend is a crock. Mutual Funds are not safe. Ma & Pa investor don't know how to work the market (which has volatility, "flash crashes", hacks, hedge fund manipulation,) and plenty of outside influences outside of their control, that limit their growth.
Along with that, Mutual Funds don't put "cash flow" into their pockets whether the value goes up or or goes down.
If my properties go up, I still get about $500 a month cash flow per property. If my properties go down, I still get about $500 per property. The Stock Market doesn't do that for people.
Research shows that for most people, an extra $500 a month improves their life. They can get that extra $500 a month with real estate or by delivering pizzas in their off hours, but that is a different matter. ;-)
Looking at the chart below: If you want $40,000 a year income using the 4% rule - you need $1,000,000 - none of those categories below come even close. By buying Stocks they have limited themselves and tied up their investment money in a poorly performing asset. CLICK on image to enlarge.
@Mike M.
Just so everyone is clear here: markets average one (14%) annual decline. Daily dips of 2%+ occur 5 times annually. Every 5 years on average, the market dips 30%+. Markets rise 3/4 years. Selling low and buying high never works, same goes with real estate. Never make important decisions based on emotion, this also goes for real estate as well as life in general. Market (stock & RE) dIps offer good buyIng opportInItIes, if you’re prepared...
Just so everyone is clear here: markets average one (14%) annual decline. Daily dips of 2%+ occur 5 times annually. Every 5 years on average, the market dips 30%+. Markets rise 3/4 years. Selling low and buying high never works, same goes with real estate. Never make important decisions based on emotion, this also goes for real estate as well as life in general. Market (stock & RE) dIps offer good buyIng opportInItIes, if you’re prepared...
That's right. And if you are on a long enough timeline you should be fine. Here is the time it takes the DJIA to recover after a crash: CLICK on image to enlarge.
Stock market is down, partially because interest rates are up. This has an effect on commercial / investment real estate. And home buying. Cost of capital is more expensive. And you can't automatically pass the new expenses onto tenants.
Now, for those of us with properties with fixed rate mortgages, we'll be ok. If you're not selling or refinancing, you'll be ok.
I suspect certain real estate brokers, especially investment real estate brokers, will have a slowdown.
Sales volume will be down. Prices will (slowly) adjust. Low cap rate properties will get whacked.