In the last two weeks, volatility has returned to the stock market, dropping more than 500 points before rebounding. It is generally accepted that stock market volatility has little impact on real estate pricing, but it could have a trickle down effect, impacting business confidence that could hinder growth. At the moment, the stock market volatility hasn't had an impact on commercial real estate pricing, but more minor declines in the coming year could start to have an impact.
“We looked at studies over the last 20 years comparing stock market performance to real estate prices, and they found that there is no strong correlation,” Tim Lee VP of corporate development and legal affairs at Olive Hill Group, tells GlobeSt.com. “From a high level view, there is no evidence to suggest that a stock market drop is going to impact real estate prices, particularly in commercial real estate. Part of that is because you have longer-term leases and businesses with more cash reserves that individuals. Having multi-tenant properties helps to weather the storms a bit better.”
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