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Real estate is soaring, stocks are not...

market research Jan 01, 2016

The real estate market last year had experienced another solid year of growth while at the same time the stock market is experiencing another year of sub-par performance. As we bring in the New Year, the stock market is not showing any positive gains over the previous year.

This is a huge worry for investors as these stock market results are becoming more and more abysmal and this is especially true for those that have retirement accounts in the market. Most of the retirement accounts are managed and controlled by the major stock brokerage and financial planning firms. For investors to retain any positive return on these stock market investments, they not only have to hope and overcome the poor performing stock market, but they also have to cover the fees associated with these huge investment firms!

What is sickening is that the average active managers take a fee of 3% to even 5% of the total value of your investment funds. Now on top of that your average financial planners who work directly with you, the investor, take another 1% as an asset management fee right off the top. Lastly, let's get into the companies who give their employees a 401(k) program, they also take an administrative fee on top of that. This makes you wonder why so many are worried about the stock market and its results coming into 2016.

The real estate market, on the other hand, is having another incredible year. The renting market alone has continued to rise in most of the markets. In Utah alone, we rank in the top 5 and climbing in the regional average for rental increases, vacancy rates, and rent variance. In addition to rents increasing, vacancy rates have either held stable or declined to make the gains in net cash flow even more impressive.

This is showing in Utah again ranks among the best U.S. cities for investing in rental properties. The trend is that more and more people are choosing to be renters in the ever-growing job market that has been exploding in Utah. With huge technology-based companies calling Utah home, this, in turn, brings in a vast number of renters.

The 2015 results for residential housing were not as impressive as that of the results for the commercial real estate market, but again, it was solid gains considering the shape of the economy. Preston? (Is there a last name) from NAREIA stated, "The National Association of Realtors did report a slowdown in existing and new home sales in November 2015 of 10.5 percent and 2.7 percent respectively, the median existing price of an existing home was up 6.3 percent in the year-over-year results from $207,200 in November 2014 to $220,300 in November 2015 and, according to the National Association of Home Builders, median new home prices were up slightly in November 2015 by 0.8 percent over November 2014, from $302,700 to $305,000."

All of this is great news for those investors who invest part or all of their discretionary or retirement money in real estate rather than putting it all in the stock market. FIG (Fourplex Investment Group) has a one-of-a-kind investment opportunity for those investors looking to get out of the Stock market and into the real estate market. Let FIG know how we can help you.

Work cited: nareiagroup.org/blog

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