Stock Market Stinks (Down -800 points Today) - Real Estate Great

193 Replies

Here we go - it's just the beginning . . .  Is your Broker returning your calls?

"This Is The Tipping Point": One Bank Is Calling For A 30% Market Correction

I thought I was seeing objects falling from skyscrapers in Manhattan until I realized these were investment bankers jumping out of the windows ....

Just kidding. We had 900 point decline in Feb and we are still standing.

HOWEVER, clouds are on the horizon

a) International markets have been routed - from 50% down in Asia and Russia to 15% down in Europe

b) Interest rates are climbing, 30 year mortgage hit -- shock, horror -- 5% again

c) Real estate markets in some regions are showing seasonal cooling down

d) Tariff wars

e) Oil prices rising

f) Employers cannot find employees

The next 12 months should be interesting ....

When the credit markets sneeze, the real estate market will catch a cold ....

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.

 

Oh well, there is a possibility housing market will follow stock market. I am quite scared now. Many investor has large asset  and large DEBT.

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%.  

Originally posted by @Ray Johnson :

@Mike M. 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.

Originally posted by @Eric C. :

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%.  

 It's just the beginning my friend. 

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.

The good news is that events like this are fairly strongly correlated with mortgage interest rate improvements. 

Originally posted by @Chris Mason :

The good news is that events like this are fairly strongly correlated with mortgage interest rate improvements. 

 Always looking on the bright side.

Originally posted by @Account Closed :

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.

Originally posted by @Max T. :
@Mike M.

Sounds like a good day to buy some index funds.

 Yeah, if you are in "cash" position. Most people are fully invested though. ;-)

@Account Closed 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
Originally posted by @Matt Millard :
@Caleb Heimsoth

This could be the beginning of the end bigger than 2008 crash. Although I imagine we will have other headfakes

I don’t see that happening, this happened in february.  

@Caleb Heimsoth @Matt Millard @Jason D.

This is why it's a problem:

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.

@Account Closed 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...