It’s been a wild week in the world of finance. The stock market has been in ‘correction’ mode and everyone is trying to stay calm. I don’t think the recent drop is a precursor to cataclysm, rather a reaction to prices climbing too fast, and I don’t think it will continue down to the depths. However it does make me think about money and where to put it.
The past five years have been stellar for the stock market. Take a look:
Even after last week’s drop, it’s a 65% gain over 5 years. Pretty good. Now, here are the previous five years of Oahu Single Family Home Average Sale Prices:
Unfortunately we don’t have the 2015 average yet, but I can tell you that Average Sale Price has fluctuated a bit this year but is currently running about 11% ahead of last year. This graph shows about a 25% increase between 2010 and 2014.
I know that looks like a strong case for the stock market, but consider this: The Dow lost 53% of its value from October 2007 to March 2009. That was the big financial crisis. During the same period, Oahu home prices fell just 13.8%.
Big gains in the stock market are very appealing but they come with a rather large level of risk. At any time, your investment can take a strong hit based on events occurring almost anywhere in the world. Meanwhile, Oahu real estate remains relatively steady. Since 1985 we’ve enjoyed an average appreciation rate of just under 5% per year. We have had downturns, but they have been relatively mild. If you are deciding where to put your nest egg, you need look no further than your own backyard. And when it comes to purchasing a property that will steadily grow in value, there is no better help on the island than Help-U-Sell Honolulu Properties.
Help-U-Sell Honolulu Properties is a full service real estate company that provides exceptional service while charging less than ordinary Realtors. We’ve been successfully helping buyers and sellers all over Oahu for more than 12 years and we’d be delighted to help you achieve your housing dreams. Contact us at (808) 593-8811, or visit our website.