Varney: Real estate an alternative investment to stocks
'Good times are coming back for realtors'
FOX Business' Stuart Varney on real estate being an alternative to stock investing during the coronavirus pandemic.
FOX Business’ Stuart Varney, in his latest “My Take,” argues that real estate has become an alternative to stocks as the market soars during the coronavirus pandemic.
“Remember the expression TINA: there is no alternative?” he said. “That is, no alternative to stocks. Well, there is an alternative. It’s called real estate, specifically single-family homes.”
According to Varney, home prices and mortgage applications are on the rise and realtors have reported a surge in "open house" foot traffic.
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Market watcher Mark Tepper told Varney that homebuyers in Cleveland are paying above the asking price for some locations and starting bidding wars.
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“Let’s not get carried away here,” he said. “It’s not yet a return to the golden years of 2005 and 2006. But it is true to say that the good times are coming back for realtors. And that’s an invitation to take some money out of stock profits and put it into a second home, a vacation home, or just a bigger home.”
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Varney said this is technically considered asset reallocation, moving money from one type of investment into another.
Demand for real estate is being driven by the coronavirus pandemic – the need for people to escape large cities for the suburbs– and historically low mortgage rates, Varney said.
“There's a lot of people who want out of the cities because they're crammed in with the children trying to work from home,” he said. “They want space! The suburbs and rural areas look good.”
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Election risk is also pushing stock investors to reallocate their money, Varney said, as a Biden win and mail-in balloting is a threat to stock prices.
“Why not reduce that risk by switching out to real estate?” he said. “There's no immediate election risk in a better home. Of course, we haven’t mentioned the great tax exodus which is going strong and pushing people out of high tax states and into Florida, Texas, Nevada, and Tennessee. Add it up and maybe TINA has had its day. There is an alternative to stocks: real estate.”