Real Estate Follows The Stock Market With 12 Month Delay

In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discussed Real Estate Follows The Stock Market With 12 Month Delay. Here’s a excerpt from the episode:

Tobias: Why the homebuilders have all been so beaten up?

Bill: They don’t have volume. They’re not going to deliver nearly as many homes.

Tobias: Because they constraint on the supply side, on the input side.

Bill: Yeah, they’re going to protect the margins, I think is what they’re saying and that they’re going to pull back construction, which if you have a shortage is only going to exacerbate the problem.

Tobias: I think the real estate market follows the stock market with about a 12-month delay, so it’s worth considering conducting a specialised miami real estate search if the stock market has been performing well over the past year.

Bill: Yeah.

Tobias: It just tends to be stickier for the obvious reasons you can trade much more easily, whereas it takes a long time to get in and out of a house.

Bill: I think my conclusions about housing are the amount of the economic activity that reduced from HELOC, could potentially be reduced, but I don’t know. I guess, you got wealth effect, if people think that their houses are worth less than they spend less. That’s a possible follow-on effect, but I don’t know.

Tobias: Do people really do that, do you think?

Bill: Oh, yeah.

Tobias: Is it a HELOC thing or is it a– I checked Zillow and it’s down, we’ve got a constraint [unintelligible [00:23:13] this month.

Bill: I think people know roughly what their house is worth.

Jake: Can we go back to the talking about kind of inflation and value?

Tobias: Yeah, please.

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