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Crypto, Nasdaq crash. Are home prices next? – Redlands Daily Facts

Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: We’ve seen eye-catching downturns in two “it’s different this time” slices of the investment world of late — crypto-currencies and the stock market’s technology-laden Nasdaq Composite. Could home prices be the next victim of a renewed bout of risk aversion?

Source: My trusty spreadsheet evaluated pandemic era price swings in bitcoin, the Nasdaq and the DQNews median selling price for the six-county Southern California region. To level the playing field, monthly average prices for bitcoin and Nasdaq prices were used to compare performance vs. housing through April.

The Trend

Dif you know that despite recent turmoil, all three assets are up since February 2020 — the last month before coronavirus hit the economy?

Through April, bitcoin gained 329% in the pandemic era, Nasdaq is up 42%, and home prices advanced 41%.

Note that these bounties of the pandemic era are significantly smaller for bitcoin (it was up 697% through March 2021) and Nasdaq (up 69% through that same month). Home prices in April hit their all-time high.

The Dissection

It was a surprising upswing for risk-taking asset holders amid unprecedented economic gyrations during the pandemic.

Looking at the 26 months of the pandemic era, home prices rose 18 times, bitcoin was up 17 and Nasdaq gained in 16. But Nasdaq stocks fell in six of the last seven months; bitcoin was off in four of the past five; while home prices dipped just twice in the last 15 months.

The best months? Bitcoin soared 58% alone in January 2021. Nasdaq’s top gain was a 10% jump in May 2020, as coronavirus’ initial economic icing swiftly thawed. Home prices’ had their largest jump at 4.5% in July 2021.

Worst month? Bitcoin at lost 29% and Nasdaq dropped 17% in grand unknown at the pandemic’s start in March 2020. The ugliest month for home prices displays their slower-moving tendencies — the pandemic’s early and brief shock didn’t hit fully until a 1.8% drop in May 2020.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … SIX BUBBLES!

Look, we are seeing bubbles bursting. It’s no longer the warnings of the skittish.

Read More: Crypto, Nasdaq crash. Are home prices next? – Redlands Daily Facts

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