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The Stock Market's Affect On Real Estate
Posted: February 28, 2018
When the stock market takes a hit, I am often asked how it affects real estate sales. People ask the same question when interest rates take a hike. For the most part I can say that while it likely affects some buyers of real estate the fundamentals don't change. That is, if someone is searching for real estate whether it be a home, vacation home, vacant land or commercial real estate the search usually does not come to an end. It may change the buyer's criteria but typically it does not stop their quest to purchase.
Corrections in the stock market can scare the heck out of people but typically corrections are more emotional than fundamental. Interest rate hikes over the next year or so will not spell doom and gloom for the real estate market.
The fact is the economy appears to be pretty strong right now with economic growth appearing to accelerate. Interest rates are rising because of a better than expected economy so it really isn't bad when this happens.
Don't get me wrong I surely prefer a stock market on the rise and interest rates to slowly rise. Real estate is normally a long-term investment and 2017 was another good year for real estate in our area. We surely do hope it will continue in 2018!