It’s not your imagination. Even to the novice the stock market seems a little volatile these days. Is this something we should be concerned with, in terms of the overall economy, and specifically, regarding real estate purchasing and selling? No one has the answer ultimately but there are a lot of experts with opinions that say, “probably not.”
The US stock market has consistently and significantly outperformed international markets since mid-2009, according to Market Realist. Compared to Europe and Japan, since the end of the recession US corporations have churned out record profits and remain a bright spot in economic terms. Still, in recent weeks, volatility in the US has been extreme and is in stark contrast to the calmer international markets. Why?
There are a few guesses and they’re worth exploring. I think it’s also important to not place too much emphasis on stock markets, although, because of their size and influence in the world, it’s hard not to. Personally, my head has been swimming for weeks as i follow the news. All-time highs are reached one day, the next day sees dramatic plunges only to soar the following day. But the truth is, stocks will always rise and fall. Taking the long view in investing has typically been prudent and well-heeded advice. So I will say to try to take the news with this perspective. Don’t let the 24/7 news cycle whip you into unnecessary frenzy.
It seems October is a traditionally volatile month. Whether it’s because of upcoming holidays, elections or the ending of the fiscal year for mutual funds, October is the month where dramatic swings have occurred over a 40-year study, says Yahoo Finance. They also say global concerns and outbreaks of bad news typically rock the markets, too. Ebola and stagnant US wage growth are some of the concerning headlines these days.
The Federal Reserve has had a powerful influence on the US economy’s ability to remain stable and see expansion. in the post recession years. Europe, China and Japan have not had such good fortune and it shows in the international stock markets.
I, for one, have never been happy with the overall quality of our economic recovery in the US. I don’t see anything that will change that opinion for the foreseeable future. But as I’ve said before, life goes on. I don’t sense imminent dangers. We need places to live. Some folks will feel better continuing to rent. Others will feel safest staying in the homes they currently own. For the rest, I continue to believe this is still a very good time to purchase or sell.
Let me repeat for purchasers, if your income feels stable and secure, if your credit is decent and debt not too high. If you have some savings for a small down payment, you should pursue a purchase. Mortgage rates are incredibly low and many sellers understand their pricing needs to be reasonable to attract a buyer.
Sellers, investigate your market value. Let a Realtor help you determine if you have the necessary equity you’ll need to purchase your next home. Of course your income stability is a critical factor, as will be credit. Price right. The buyers are out there but they’re expecting a fair deal.
For more information or a complimentary, no-obligation consultation on your real estate matters, contact me.