As everybody knows, the stock market has been in a tailspin recently causing a lot of confusion and uncertainty.  I have had several people say that the unsteady stock market does not affect the value of real estate, but obviously it does.

People’s Net Worth

People purchase when they feel good about their net worth.  If the average buyer has had a decrease in their net worth (any where from 20%-50% in the last 90 days).  They are not feeling very good about their personal situation so they are less likely to make another investment. 

Consumer Confidence

In our business, we call this consumer confidence.  Even when the stock market is up and people’s net worth is up, they go out and spend money even though they do not sell the stocks that they own.  At least they have confidence in the economy. 

Lack of Confidence

There is a lack of confidence in the overall market which is further depressing real estate prices.

Silver Lining

There are some great buys out there for anyone who is willing to step out on a limb.  Historical research shows that people who have bought in times such as these have made a fortune.  We can never guarantee the future, but the past sometimes is a good prediction of the future.