Stocks vs. Real Estate Phone Calls

I have a theory that if I made a chart comparing the number of real estate inquiries I receive in a day to the price of the Dow Jones average there would be a very strong correlation between the two.  Why is it that these two very different investments are so strongly correlated?

When the economy is going strong and investment income is up, people feel more confident in their business, financial stability and future income potential.  With this security, people often decide it is time to expand their business or buy real estate for their business or for investment.

When things start to falter, it is human nature to be cautious and take a “wait-and-see” approach.  There has been a lot of negative financial news this month (followed by positive news and then negative again) regarding Europe, China, and the US Economy that leaves investors wondering what to do and where things are going.  When circumstances are so tenuous, investors tend to hold off on big purchases such as commercial real estate (and my phone calls decrease as they have this September).

So far it has been a great year compared to 2009 & 2010 and I’m hoping the number of phone calls will turn around in October and we’ll finish up the year strong.  No one knows with certainty if the future will be better or worse for business, but as far as real estate goes, I can’t remember a time where prices and interest rates were both as low as they are now.   Another theory is the smart investor buys when everyone else is selling.

-Dan Stiebel, CCIM

Dan Stiebel

Dan Stiebel

Associate Broker
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