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Posted on 5/1/2025 by David M. Dion

Stock Market vs. Real Estate Market

The only thing we can be certain about over the next four years, is uncertainty.

Economic Chaos

And the stock market certainly has not reacted well to decisions made by the current administration of the United States government.  Economic chaos perhaps best describes what’s going on right now. And no one knows whether the stock market is going to turn upward or further downward.  There are a lot of people out there whose retirement depends on the stability of the stock market. And that’s a scary proposition right now.

No Guarantees

Unfortunately, none of the stock market gurus are providing any guarantees your investments are secure.  What they do universally say is things like,” Investor sentiment is down and that’s a great time to buy”, or “Bearish investor sentiment has often been followed by strong market returns”. What they fail to say is that we are in unprecedented times in terms of the policies and actions at the federal level.  And those policies and actions have already had and are likely to continue having a profoundly negative impact on just about every facet of American life, including your retirement account. It can be very disheartening.

Real Estate Remains Stable

Interestingly, the real estate market in Vermont and the Mad River Valley has largely been unaffected by either activities in the White House or by the stock market. Indeed, all sectors of the housing market continue to be in high demand. And with a continued shortage of housing units, it is unlikely there will be a downturn or correction any day soon.

At MRVRE we believe single family and multi-unit residential real estate is perhaps the safest and most profitable place to be invested right now.  Rents have risen sharply since the Covid pandemic and rising rents translates to increased market value. And single-family home ownership offers many personal and financial benefits. Indeed, the IRS treats homeownership quite favorably in terms of mortgage rate deductions when it comes to paying your annual dues (i.e.: taxes) to Uncle Sam. And mortgage interest rate deductions are one of the few places left in the IRS tax code where your tax burden actually gets a credit.

A Debt of Gratitude

I remember many years ago complaining to my accountant about income taxes. His response was two-fold: First he said be lucky you owe income taxes because that means you are making money. But the second and more important thing he said was to invest in cash flow real estate. What he meant was to purchase rental real estate. The benefits include a steady stream of rental income, the ability to depreciate the asset, and the ability to write off expenses against the income. Overtime the rents will increase and as a result the market value will increase. Today I owe my accountant a huge debt of gratitude (and lots of beers!) for making that recommendation.

Think Long Term and Buy Real Estate!

In a contest between return on investment in the stock market and return on investment in real estate I’d go with real estate any day! At MRVRE we are not in a position to make recommendations on the stock market. But we sure have a lot of experience to offer when it comes to purchasing and selling real estate!