Bear Market Jitters

Dear Pat,
How will the big stock market drop affect our property value? It seems to me that a poor stock market means less money for down payments and more cautious house shoppers.
---Not Crash Proof

Dear Crash,
You can take your helmet off, since history is on the side of the Seward/Longfellow homeowner. It's true that dramatic price increases in recent years have a parallel in the mid-to-late 1970's, but when the economy cooled in the early 80's local house prices held steady--although the rate of appreciation did slow to a crawl. Prices continued to rise following the 1987 stock market crash (favorable interest rates had far more influence on housing demand than did stock market worries). Nor were our prices affected by the early 90's economic slowdown. We need to remember that our housing stock in the city is constant, unlike newer suburbs or commercial developments, where supply is always anticipating demand. And let's note the fly-over factor: since the Midwest has not experienced the wild inflationary price gains seen on both Coasts, our fast-rising values remain relatively realistic, albeit painful to buyers (and their Realtors!). Even in California, say the experts, only the move-up market is likely to see prices flatten or fall as the dot.coms evaporate.