Equity Exposure Greater than Real Estate
People are starting to talk about real estate bubbles and what not, now that we are seeing market softness in certain sectors as well as geographic locations in San Diego and elsewhere in California. But, as one expert points out, economic volatility due to exposure to real estate is much less than exposure to equities in the economy today.
“From this perspective, household exposure is still greater to equities than it is to real estate, and the volatility of equity asset values is far greater than that of real estate, so the performance of the economy and equities is likely to have more of an impact on people’s saving habits than that of real estate.”