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Lindsay R

Should I buy real estate stocks given that the housing sector is currently doing so badly?

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 Hi there,

The real estate sector is doing so badly. Is it a good time to buy real estate shares or wait it out?

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Hallo there,

This is a great question as the housing sector is one of the most adversely affected by the Covid-19 pandemic.


The Coronavirus has triggered similar macro environments to those that resulted in history’s worst housing bubble. That bubble arose from a huge money supply expansion, creating the infamous subprime mortgage crisis. This eventually led to the last Great Recession.
Currently, no vaccine will protect the real estate commercial industry from the resounding impact of rising numbers of covid-19 cases in Britain and globally. Real estate shares have shown a marked downturn, which is similar to most of the other market sectors. Effects do not discriminate across jurisdictions, as FTSE news coverage on real estate shares has shown.
If you feel you can’t handle the housing market which is heading further down, dapple in shorting real estate shares through a REIT itself or through an ETF. Numerous REITs pepper the market that cover hotels, residential properties, student housing, and industrial buildings.
On the other hand, the coming weeks and months may actually turn out to be an excellent market for first time real estate share buyers. If you are new to the market or just starting out, share prices are currently low and falling. It creates a perfect opportunity to average down, in anticipation of a price shoot up, once the coronavirus crisis is over.

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Hi Lindsay,

From portfolio diversification and low volatility to dividend returns and liquidity, real estate stock has many benefits. But is it still lucrative during the COVID-19 crisis? America, Singapore, Japan, and similar top markets are already feeling the heat with homeowners delaying mortgage payments. Condos in the Philippines might also take a 15-20% dip before 2020 ends.
If the 1990s and 2000s are anything to go by, economic turmoil is followed by shooting housing prices. A past report by the University of Granada in conjunction with the Chicago Fed attributes the hikes to increased bank lending.
For starters, slashing interest rates for extended periods eliminates pressure from possible buyers. This together with the government measures aimed at economic recovery increase real estate appetite. Even so, timing remains a concern despite the market potential. While you may enjoy the current discounted prices, it could take months, even years, for conditions to normalize.
 

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That is exactly what I was wondering a couple of days ago! I was looking to invest some money and buy some real estate stocks, however my experience from working in the real estate domain, told me to stop and start analyzing all the aspects. Even now, I  do think that investing in real estate stocks might not be the greatest idea. Just as you said, the pandemic affects this sector directly, and it does affect it in a really bad way.

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I do actually consider that buying real estate stocks is a good idea anytime of the year! I mean, let's be objective the real estate market is probably one of the most stable markets, which makes one of the best domains for investments! Moreover, as soon as their prices drop down, it just like in tradin any other stocks, they will bump up really high! Honestly, I am actually looking for some Miami real estate for sale as I want to invest in real estate a part of my money, and another part in the real estate stocks.

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On 4/20/2021 at 6:25 PM, Hannah Greene said:

I do actually consider that buying real estate stocks is a good idea anytime of the year! I mean, let's be objective the real estate market is probably one of the most stable markets, which makes one of the best domains for investments! Moreover, as soon as their prices drop down, it just like in tradin any other stocks, they will bump up really high! Honestly, I am actually looking for some Miami real estate for sale as I want to invest in real estate a part of my money, and another part in the real estate stocks.

I have to agree with you, real estate is something that we will always need!

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