Is Now the Time to Buy Real Estate if Your 401(k) Is Down? How to Diversify During Tariff-Driven Market Volatility
As global trade tensions and tariffs continue to rattle the stock market, many investors are opening their 401(k) statements with one eye closed. It’s normal to feel uncertain when your retirement account takes a hit—but does that mean you should pause all other investments, like real estate?
In short: not necessarily.
In fact, this could be the right time to diversify beyond the stock market and lean into more stable, long-term assets—especially here in San Diego.
Why Are Tariffs Affecting the Market?
Tariffs create uncertainty for companies tied to international trade, especially those in manufacturing, tech, and agriculture. That uncertainty leads to volatility, and that volatility shows up in retirement accounts heavily weighted in stocks.
Locally, San Diego’s economy is home to companies like Qualcomm, Northrop Grumman, and a wide range of biotech firms and agricultural exporters. These sectors are particularly sensitive to rising material costs and trade disruptions, meaning local investors might be feeling an extra pinch.
But here's the good news: real estate isn't as reactive to headlines—and can offer a safe haven during times like these.
3 Smart Ways to Diversify Beyond Stocks
1. Bonds and Treasuries
Government-backed bonds are considered low-risk and provide consistent income. San Diego investors often benefit from local municipal bonds, especially those funding infrastructure projects through SANDAG or local school districts. These can offer tax advantages while reducing exposure to the market’s ups and downs.
2. Commodities
Investments like gold and oil tend to move independently from stocks and can act as a hedge against inflation and volatility. Even ETFs (exchange-traded funds) like GLD or DBC can give you exposure to commodities without physically owning them.
3. Real Estate
Real estate stands apart as a tangible, appreciating asset that can also generate income.
In San Diego, desirable neighborhoods like Encinitas, Carmel Valley, and La Jolla continue to see high demand, even when financial markets are unstable. According to the Greater San Diego Association of Realtors (SDAR), home prices in many parts of the county have increased year-over-year—even as the stock market has seesawed.
But Should You Buy Real Estate If Your 401(k) Is Down?
Let’s dig into the real question. When your retirement account is showing losses, does it make sense to take on a big investment like real estate?
Here’s why the answer might still be yes:
Real Estate Isn’t Correlated with the Stock Market
The performance of your 401(k) doesn't dictate what happens in the housing market. While both can be affected by broader economic conditions, real estate often remains strong—or even strengthens—when stocks struggle.
Real Estate Can Act as a Hedge
San Diego property values are historically resilient. If you're concerned about inflation, volatility, or a long road to recovery for your portfolio, real estate offers something stocks don't: stability you can live in (or rent out for income).
Mortgage Rates Matter More Than Stock Prices
Interest rates are a critical factor in affordability. Even if your 401(k) is temporarily down, locking in a low mortgage rate now could save you thousands over the life of your loan.
You’re Building Wealth in a Different Way
Buying property diversifies your assets. You're not “spending” money—you’re shifting it into a long-term growth vehicle that can build equity, generate income, and appreciate over time.
What Should You Consider First?
Before diving into real estate while your 401(k) is down, ask yourself:
- Do I have stable income and cash reserves for a down payment?
- Can I afford monthly mortgage payments without touching retirement funds?
- Am I buying for the long term—not trying to flip or time the market?
If the answer is yes, you could be in a strong position to buy smart, especially if others are waiting on the sidelines.
Local Opportunity: San Diego’s Market Is Still Moving
While national headlines may be uncertain, San Diego real estate continues to thrive. Buyers are finding opportunities in transitional neighborhoods, new construction, and even off-market deals. Meanwhile, sellers are still seeing strong results in coastal and high-demand areas.
Don’t let a temporary dip in your portfolio keep you from making a move that could secure your financial future.
Final Thought: Markets Fluctuate—Assets Can Grow
Your 401(k) is important—but it’s not the whole picture. Times of volatility can be the best times to diversify, reposition, and make confident long-term moves.
If you’re thinking about adding real estate to your investment mix—or you're simply ready to move up, downsize, or relocate in San Diego—I’m here to help.
Let’s talk strategy. Whether you’re buying your first home or building a real estate portfolio, I’ll guide you through your options with insight, clarity, and a plan tailored to your goals.
📩 [email protected] | 📱 619.757.6629
