Stock Market Woes? Turn that Frown, Up-Side-Down
November 10th, 2008 categories: Chicago Real Estate News
It’s easy to get depressed these days when the statements from your retirement accounts come in. You open that envelope, take a deep breath, look and then … Well, it’s safe to say that you don’t like what you see.
You’re far from alone, of course. Thanks to the country’s economic slump, the monetary values of 401(k) plans across the United States have been falling fast.
But the struggling stock market shouldn’t keep you from buying a house if you’re ready to purchase.
Certified planner Chris Bird last week told an audience at the 2008 REALTORS® Conference & Expo in Orlando that the stock market will eventually regain its strength and that your investments will again begin growing. The stock market isn’t meant for short-term gains, Bird said. It’s meant to create long-term wealth.
Does that sound familiar? It should. It’s what I always say about residential real estate. It’s not designed to double your money in a year. It’s designed to steadily pick up worth over several years.
You can read about Bird’s speech here. The gist, though, is that you shouldn’t fret too much over “the talking heads who say the sky is falling.” That’s good advice, whether those talking heads are bemoaning the state of the stock market or the health of the housing industry.
In fact, the falling stock market might actually mean good things for residential real estate. Because the stock market has had such a rough year, many investors have lost faith in it. They’re looking for somewhere else to put their money. And what’s a safer, steadier investment than residential real estate? Not even in the worst housing markets in the country has the value of residential real estate fared as poorly as has the stock market this year.
I always advise my clients to look at real estate as an asset to be held for several years. The days of buying a home, fixing it up and then selling it a year later for immense profits are over. Personally, I’m glad. That boom market caused too much artificial inflation of home values over the years in Chicago and across the nation. We’re moving back toward a normal market, where homes will still appreciate in value, just not as quickly as we saw during the real estate boom of 2001 through 2006.
So next time you open that 401(k) statement, or the next time you worry about the worth of your home, remember not to panic. Be patient. Your investments will regain their health again.
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