If Share market is going down due to Recession fears what is reason for Real Estate market to be bullish?

Only serious & deep answers are solicited:

The NSE & BSE indices show steep falls and are attributed to downward trend in global economy, recession, metal meltdown, rising crude prices etc.

But the real estate prices are very firm. Is a correction due on the galloping real estate prices?

7 Replies to “If Share market is going down due to Recession fears what is reason for Real Estate market to be bullish?”

  1. The prices are firm, but that is why they go to foreclosure instead of selling. I have been following our market, and houses that sell, tend to sell for 10-20% lower than asking, and that’s if asking price is already a bargain. Prices stayed high here (Phoenix) for nearly a year, so for a while the papers reported that the market was stable in price, but more houses kept coming on the market while sales stayed low.

    I think that there will be an uptick as prices come down, but people are just now coming around to the fact that they will not actually produce a sale unless they take less money, and more and more people are seling for less than they paid, or even for less equity than they have. The bear market is a ripple effect of the real estate market, so they are right now falling off the cliff hand in hand.

    I think that the stock market will improve first. I think the bargains coupled with the low value of the dollar will start getting the attention of foreign bargain hunters. They are less interested in private homes in a foreign country than in stocks, due to the liquidity issues.

  2. real estate prices aren’t firm, they fell over 13% in 2007. since loans are now hard to get fewer houses will be bought. we also have a surplus of supply. these are the reasons that prices are tanking. they will continue to decline for the foreseeable future. perhaps what you mean to say instead of “But the real estate prices are very firm.” is: the real estate prices are very firm where I am living.

  3. Reason for the present recession is the after effect of full employment and industrial growth and net increase in GDP .Naturally this will be reversed automatically and the correction process can be stimulated on government intervention .By looking on the safer side of investment it will be better in the share market than in the real estate market .

  4. I don’t know where you are, but real estate prices in the USA are far from galloping. Unless horses are now being born with a reverse gear. If the financial situation in your country is now or predicted to be anything similar to that in the US, there is bad news coming down the line.

  5. hi,
    it is a short term phenomena. one reason is when stock market is down next alternative is investment in land. that is why companies having huge land bank are firm.

    but when market undergoes big fall almost all the stocks will be dragged down.

    study the fundamentals of investment from http://vbulls.com/ .

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