A Historic Shortage\nof Existing Homes \u2013 <\/strong>Americans are on the move, creating what may be seen as\na \u2018good\u2019 problem. On the one hand, the migration out of cities and into the\nsuburbs has resulted in strong demand in the housing market, giving the sector\na stiff tailwind even as the broad economy struggles to recover. On the other\nhand, rising demand is not being met with supply, which is driving prices\nhigher and crowding-out many lower income buyers. According to the National\nAssociation of Realtors, there were 1.3 million single-family homes for sale in\nthe U.S. \u2013 the lowest level for any July going back to 1982. In the week that\nended September 12, total for-sale inventory had declined -29.4% from the year\nbefore. The end result in the housing market is stiffly rising home prices,\nwith the median existing home price crossing above $300,000 for the first time\never. For August, the median existing-home price jumped 11.4% from the same\nmonth a year before, also a record.1<\/sup> The existing trend of\nhomebuyers rushing out to get more space (think home office) while sellers hang\nonto properties may not last, however. What we\u2019re seeing could be a reactionary\npendulum swing in response to the new work-from-home normal set by the pandemic,\nwhich may not be as permanent as many think. <\/p>\n\n\n\n ____________________________________________________________________________<\/p>\n\n\n\n How to Survive this Market\u2019s Extreme Volatility?<\/a><\/strong> ____________________________________________________________________________<\/p>\n\n\n\n A Tale of Two\nRecoveries \u2013 <\/strong>The Federal Reserve released data this week showing household\nnet worth at record highs (see chart below). Many readers may be wondering, how is this possible with the pandemic and\neconomic downturn? <\/em>There are a few explanations, in our view. For one, the\neconomic downturn may not have been as severe on the downside as many\nanticipated, and the recovery may be occurring more robustly than meets the\neye. Event-driven recessions tend to \u2018shock\u2019 the system but may not lead to\nmajor market dislocations that take years to mend, such as the financial system\nin the wake of the financial crisis. Another reason for the rebound in\nhousehold net worth is the rebound we\u2019ve seen in the equity markets, which is a\nkey driver of wealth but not necessarily for all American households. Which brings\nus to the tale of two recoveries \u2013 as some Americans remain largely unscathed\n(or even better off) in the wake of the pandemic, many Americans who work in\nthe service sector have lost income and may not own stocks.3<\/sup> This\ndynamic is what many refer to as the \u201cK-shaped\u201d recovery, the reckoning of\nwhich we may not fully understand for months or years to come. <\/p>\n\n\n\n The\nEuropean Recovery May Be Stalling \u2013 <\/strong>Developed economies\naround the world posted a late-summer recovery once the strictest of lockdowns\nwere lifted, but in Europe there are signs the recovery is plateauing. Surveys\nof purchasing managers in France, Germany, and Japan showed business service weakness\nin September, with output still lagging pre-pandemic levels. Much of the\nrecovery in July and August was recovering the slack from lockdowns, but the\nprospect of a return to growth is less clear. To make matters more complicated,\nEurope is currently experiencing a surge in new Covid-19 cases, with France and\nSpain posting higher per million infection rates than the United States. In the\nU.K., Prime Minister Boris Johnson announced this week a series of new\nrestrictions to try and contain a second wave of outbreaks.5<\/sup> The\nglobal economic recovery was already fragile \u2013 fresh restrictions are a\nheadwind. <\/p>\n\n\n\n At the beginning of this\nyear, we were still in the longest bull market. But the pandemic led to what\ncould be one of the shortest bear markets in history, followed by fears of a\npotential market correction. This year has shown us just how quickly the stock\nmarket can change and proven just how critical it is for investors (especially\nthose in or near retirement) to know how bear and bull markets work. Historic shortage of existing homes, \u201cK-shaped\u201d recovery in U.S., Covid-19 surging in Europe<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-8886","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8886"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8886\/revisions"}],"predecessor-version":[{"id":10537,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8886\/revisions\/10537"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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The pandemic ended what was the longest bull market in history and caused what could be one of the shortest bear markets. And now there are worries a market correction is around the corner. This year has proven just how quickly things can change. That\u2019s why there is no better time for investors to gain a better understanding of bear markets and how they work.
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To help you understand market downturns and steps you can take to protect your assets during the next bear market, you\u2019re invited to get our free guide –\u00a0Everything You Need to Know About Bear Markets<\/em>.2<\/sup>
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If you have $500,000 or more to invest, get this helpful guide today. It walks through the history and types of bear markets, how investors typically react to extreme volatility, and what we can learn from the history of bear markets and pandemics.
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Download –\u00a0<\/a><\/strong>Everything You Need to Know About Bear Markets<\/a><\/strong><\/em><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/image-1-of-2-1024x395.png\")
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\nTo help you\nunderstand market downturns and steps you can take to protect your assets\nduring the next bear market, you\u2019re invited to get our free guide – Everything\nYou Need to Know About Bear Markets<\/em>.6<\/sup>
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\nIf you have\n$500,000 or more to invest, get this helpful guide today. It walks through the history\nand types of bear markets, how investors typically react to extreme volatility,\nand what we can learn from the history of bear markets and pandemics.<\/p>\n","protected":false},"excerpt":{"rendered":"