How much would a stock market crash/recession affect CRE?
Prob a dumb and obvious question, but how would a stock market crash affect CRE job security across the board?
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Definitely not an expert on this subject, but can't you just refer to '08 and the beginning of Covid (spring 2020)? I don't think the effects of another stock market crash on real estate will be very different than both these events. 1.) Layoffs across all industries will affect tenants' ability to pay rent 2.) liquidity/capital markets will freeze. I mean it isn't all that different than what happens to investors in companies during a crash. Essentially the asset is unable to perform/underperforms, investors want to gtfo but so does everyone else which leads to the price taking a nosedive. Capital providers/lenders aren't providing capital to anyone...so you are stuck with an underperforming asset that likely still has debt obligations...if this happens to enough of your assets/savings then you file for bankruptcy and this happens to millions of people/companies/real estate investors. The severity depends on how big/systematic the bubble is and how fast the FED/Congress acts. Once again, not an expert...
In terms of job security, that depends on the severity and if you are in a front office role (acquisitions/investments). I don't think the next crash will be caused by real estate as it was in '08, so I don't think layoffs in real estate will be as bad in '08...but real estate is not immune to market crashes. Front offices roles will be the first to go. A better proxy for how bad it will be for real estate is the crash due to covid. The main difference is how quickly the FED acted in Spring of 2020. They implemented many measures and incentives to reduce layoffs (PPP)...they will react similarly in the future
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