Investors are frequently asking whether the current investment market is better for stocks or real estate. Usually, there’s a correct answer. Right now, the best answer is probably not to invest at all. When this happens, it’s called a hold phase. Real estate being both a less volatile and more long-term investment makes it a slightly better method of investment during a hold phase, but it’s still likely better to hold off until home prices reach a bottom, which is likely to be around 2025.
Stock price movement is a bit harder to generalize since it changes so much more frequently than real estate prices. This is mostly because stock trades can be initiated and completed near instantaneously, while home sales typically take a few weeks between listing and accepting an offer. That said, it’s clearly evident that stock prices are on a downward trend right now, with an annual change of -17%. Until this bottoms out, it may be too risky to invest. Home prices, on the other hand, increased 12% in the past year. Normally this would make it an absolutely terrible time to invest in real estate, and it’s certainly not a good time to do so, but home prices are now decreasing. Better investment opportunities in real estate will crop up in a few years.