With the Dow tumbling 800 points and the inversion of the U.S. Treasury yield curve, many fear an impending recession.
Normally when events like these occur, real estate stocks also plunge, interest rates go up and investors scramble to put their money towards bonds. But this time, that’s not the case. Several real estate stocks actually saw an uptick during the Dow plunge, the Fed cut interest rates and people are still putting their money into real estate investments.
Why? Typically during times like these, supply in the real estate market goes down, but this time it has actually held—a signal that this sector of the market is not weakening, even though its counterparts may be.
During times of uncertainty and downturn, long-term investments (such as real estate) are far more favored than shorter-term investments, which are thought to pose much more of a risk.
Real estate is a solid investment, and more and more investors are beginning to understand this, being encouraged by their wealth managers and advisors to continue investing in real estate as the years go by. Real estate stands the test of time and more times than not produces the high yield ROI that investors are looking for.
The only question that remains is, where will you put your investment dollars in the coming months? We’re sticking with real estate.