Real Estate Considered to Be the Best Investment For the Next Bear Market
Investing in Real Estate before a bear market may sound contradictory to what you’ve most commonly believed, but we’re here to challenge your ideas about real estate in a falling market. The 2008 Recession may have shaped the way you view real estate during a low market, but statistics show that its performance during that period was the exception rather than the rule.
Since 1952, there have been 20 bear markets. The Case-Shiller Index shows real estate increases in all of these but two. One of those being the housing crisis between 2007-2009 and another by which there was a decrease by 0.4%. I if we analyze data from the Case-Shiller Index, you can see how 2007-2009 is depicted as the outlier as opposed to the standard. The graph below represents Boulder County, with the shaded area representing a recession, but most metropolitan areas across the front range experienced similar trends in the market.
Not only this, but long-term treasury bonds did even better than real estate in these 20 stock falling markets, increasing by 6.2%. That may make you wonder if bonds are a safer bet against bear markets. Considering today’s low interest rates and the possibility of increased inflation, it’s unlikely that will be the case as historically, inflation is bad for bonds and good for real estate. Yet another reason to invest.
We’d suggest to follow up our information with your own research in order to sufficiently understand, but with this historical background and the rather circumstantial events that caused the housing market to crash in 2007, real estate is still likely a good investment for the next bear market.