The stock market had another bad day Wednesday.  As I was watching the talk shows last night, people were talking about the market and what is going on.  My initial reaction is, how does this affect real estate? 

It has always been my experience that consumer confidence is the most important thing in whether people purchase real estate.  If they feel good about their situation, they are much more likely to make a purchase.  If they feel bad, they do not. 

I have often heard people say that should not matter because they are really not taking a loss because they are not selling the stock and hopefully it will go up. 

Still, if the market is down, many do not feel good about their net worth and they do not buy.  For example, if you have a fever of 102 and you are sick, you are probably not going to run in a 5K.  Even though you probably will not die and you probably will get better, at that moment, you do not feel like running a 5K.  That is the way it is in real estate; when people’s stocks are down they do not sell them, but they do not feel good about their net worth so they do not purchase 2nd homes and vacation properties in a resort like Hilton Head. 

It is my hope that the stock market will turn around because the sooner it turns around and has some strength and stability, people will feel better about the future of our country and will get out of this “financial meltdown” mode and purchase real estate.

There are many factors that go into the purchase of real estate and the overall strength of the real estate market.  Consumer confidence is one; which is greatly tied to the stock market.