I just want to be clear with my readers that the impetus for my post yesterday about the stock market decline was my own curiosity about how this may effect the Manhattan real estate market and MY BOTTOM LINE. The reason that I asked 2 of the top financial people in banking and on Wall street was because I don’t believe that I am qualified to speak on specifically how the financial markets are tied to housing.
All of that said, as a real estate professional since 1992, I can give both anecdotal experiences as well as market observations when events like this happened in the past. In my 15 years in the real estate industry, a stock sell off like we witnessed yesterday (and may continue into today) is usually followed by a very quiet real estate office for a few days and then a return to normalcy. In fact, the last big decline like this was in September of 2001 when the market reopened after September 11. For about 6 weeks after September 11, understandable skittishness created opportunities for some "bargains" in the real estate market. Of course, this was largely in part to the shock that the entire country was in after that horrific event, but just 6 weeks later, the housing market picked up steam again and by early 2002, prices had surpassed the record levels that were seen in August 2001.
Most importantly I believe is that housing is never immediately effected by a stock market drop. There is always a lag. Most who know much more than I don’t think that this possible stock market correction will have a negative impact on housing. On the contrary, many believe it is good for the housing market. We’ll see.
The Opening Bell has just rung and the see saw begins. It will be interesting to watch what happens today and again, I suspect that I may have a couple of quieter days ahead followed by a busy week again next week. I could use a break.