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How Real Estate Affects The Stock Market • Benzinga

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The 2008 financial crisis was unique because of its severity as well as the fact that distressed real estate assets and bad loans played a large role in precipitating it.

Before 2008, real estate had been one of the most stable, reliably performing asset classes. Ironically, it was this history of reliable performance that led to investment banks betting too much money on real estate. When those bets came up snake-eyes, the banks (and by extension, the stock market) got bitten badly, and many of them never recovered. 

With that said, quantifying the effect real estate normally has on the stock market is not so cut and dried. 

How Does the Real Estate Market Shift?

The underlying fundamentals of the real estate market are subject to the same pressures as any other large consumer market: supply and demand. The real…

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