Volatile stock market benefits real estate-ie

When equity markets turn crazy, people can't stomach the volatility so what do they do? They invest in the next best non-crazy thing...real estate. On the other end when the stock market is doing well they eventually sell to buy real estate too. Why? Because you can't show off your Ameritrade account but you can show off that nice new big summer house. That's why Manhattan real estate is your best investment....nice steady gains without all the stress.

that's why I disagree with those who say or think that stock market volatility hurts real estate. It does the exact opposite. As investors watch the stomach churning ups and downs they think how incredibly better it would be to have a nice investment property right now. As opposed to being ready to throw up and pull their hair out as money vanishes right before their eyes.......Just some thoughts after all this stock market volatility that we had this past 8 months.

Steve:

1. ultimately all asset classes will be harmed by losses and volatility in stock and bond markets
2. that has already happened in the Manhattan CMBS market

3. with the result that funds for development and land acquisition have shrinken
4. that shrinkage is likely to show up in reduced market transaction volume

5. and lower prices

maybe

What Steve is saying is true about large Chinese cities as their population continues to increase.

However, a pro-longed decline of 25% or more in the stocks in the US, which is typically due to economic concerns, will soften the real estate price as well. I still think Manhattan real estate where people actually live full-time in the apartment (rather than high end condo used to park money or second/third home) will continue to gradually increase at 5% pace for the next 2-3 years due to continued low rates.

2008 stock market slide was preceded by RE bubble popping in 2006
These asset classes sometimes mirror each other , sometimes dance together , but the chicken and egg is rarely the same in each stock collapse or RE collapse

>I still think Manhattan real estate where people actually live full-time in the apartment (rather than high end condo used to park money or second/third home) will continue to gradually increase at 5% pace for the next 2-3 years due to continued low rates.

What if the two types of apartments are right next to each other in the same condo? One continues to go up 5%, but not the other?