In uncertain times, smart investors look for solid ground. Lately, one big source of uncertainty in the U.S. has been tariff policy – basically, taxes on imported goods. Ever-changing tariffs and trade tensions have been whipsawing financial markets and making everyone a bit nervous. In this post, we’ll chat about what’s going on with tariffs, why it’s causing so much market volatility, and why real estate – especially mid-size apartment buildings – stands out as a stable, rewarding investment option right now. We’ll keep it casual and beginner-friendly, so you can see why real estate might be a smart long-term move for you.
Tariff Uncertainty and Market Volatility
What’s happening? In short, U.S tariff policy has been all over the map recently. New tariff on major trading partners (like China, Canada, and Mexico) and constant back-and-forth changes have created a cloud of uncertainty (1) Businesses don’t know what costs to expect, and investors don’t know which industries will get hit next. This uncertainty has rattled the stock market. In fact, the unpredictable tariff announcements have “created stock market instability, driving talk of a possible recession” (2) When news of tariff hikes hits, stocks often drop suddenly, and when there’s a hint of a truce, they jump – it’s a rollercoaster.
How volatile are things? Consider this: by early April, the S&P 500 (an index of 500 big U.S. stocks) had fallen about 15% in just a couple of months amid the tariff turmoil (3) Globally, around the time of a major tariff announcement, stock markets lost an estimated $10 trillion in value within days (4) We’ve seen wild swings – big drops followed by partial rebounds – as each new tariff threat or delay hits the news (5). It’s enough to make even experienced investors a bit seasick. Traditional investments like stocks thrive on predictability, and right now the tariff situation is anything but predictable. This kind of volatility can be especially scary if you’re new to investing or nearing a financial goal – nobody likes to see their portfolio value yo-yo daily.
Stocks vs. Real Estate: Stability in a Storm
With stocks on a wild ride, many people are asking: is there a safer place to park my money until the chaos settles? The good news is real estate might offer just that safe harbor. When tariffs and trade fears are straining the markets, investors often flee to more stable assets. Some go to gold or bonds, but many are also turning to real estate. Why? Because real estate is a tangible asset – something physical you can touch, like a house or an apartment building – and it doesn’t fluctuate on a tweet-by-tweet basis. As one economist put it, in a shaky, **“uncertain” environment, investors seek out safe havens, and real estate is a reliable option because “while real estate can lose value, it tends to have more stable pricing than stocks” (6). In other words, property values generally don’t swing up and down wildly overnight the way stock prices can.
Mid-size multifamily apartment buildings like this tend to provide steady income and value. Even in rough economic waters, people need a place to live – so these properties often stay largely occupied and keep generating rent. Real estate isn’t immune to ups and downs, but it doesn’t react instantaneously to every headline, making it far less volatile than the stock market.
Another advantage: real estate, especially residential properties, is mostly insulated from global trade disputes. A house or apartment in the U.S. derives its value from local supply and demand (how many people need homes in that area), not from international supply chains. That makes real estate “better-insulated from tariffs than other industries” in the stock index (7). For example, a tariff on electronics might hurt tech company stocks, but it has little direct effect on your neighborhood rental property. Real estate’s value is backed by real assets (land and buildings) and limited international exposure, so it’s not as directly buffeted by trade wars (8).
The Appeal of Mid-Size Multifamily Properties
Within real estate, mid-size multifamily properties (think apartment buildings with, say, a dozen to a few dozen units) hit a sweet spot of stability. These properties provide housing – a basic need that doesn’t go away during a recession. As one investment firm noted, “people will always need housing, regardless of the state of the economy” (9). During tough times, people might cut back on luxuries, but they still have to pay rent to keep a roof over their heads. This constant underlying demand means apartments tend to stay occupied. In fact, even with recent economic choppiness, U.S. apartment occupancy nationwide has hovered around 94–95% (10) – the vast majority of units remain rented. Steady occupancy = steady income for owners.
Multifamily buildings also spread out your risk. Instead of relying on one tenant (as in a single-family rental), you have many. Even if a couple of units go vacant for a month, the others still provide cash flow. This makes multifamily real estate less volatile as an investment. History backs this up: during the 2008 financial crisis (one of the worst stock market crashes in decades), multifamily real estate actually gained value – about +5.2% – while the S&P 500 stock index plunged 37% (11). That’s an extreme example, but it highlights how housing investments managed to stay above water even as stocks tanked. The reason is simple: people needed those apartments in 2008 just like any other year, so landlords kept collecting rent. Real estate wasn’t immune to the recession, but it was far more resilient than stocks in that scenario.
None of this is to say real estate never goes down – it can, and does in some cycles – but the ride tends to be much smoother. Property values usually move gradually, and rents don’t collapse overnight. This relative stability makes real estate a calming presence in a portfolio when other assets get stormy.
Key Benefits of Investing in Real Estate
So, beyond riding out tariff-induced volatility, what do you get from investing in real estate? Here are some key benefits that make real estate a compelling investment, especially for first-timers:
- Passive Income: Owning rental property can put money in your pocket each month with relatively little day-to-day effort on your part. Tenants pay rent, which (after covering expenses) becomes income for you. Ideally, you can sit back while a property manager handles the 3 a.m. plumbing calls – truly making it passive. This steady cash flow can supplement your paycheck or retirement income, and it tends to be consistent even when markets swing (rent checks don’t usually drop 10% just because the Dow did).
- Appreciation (Long-Term Growth): Real estate has a strong track record of rising in value over time. There may be ups and downs, but the general trend has been up. For example, even amid recent economic uncertainty, U.S. home prices were up about 4.5% year-over-year as of late 2024 (12) – which is pretty close to the long-term average annual appreciation for real estate. If you buy property in a growing area and hold onto it for years, there’s a good chance you can sell it later for more than you paid. This builds your equity (ownership value) and overall wealth. Essentially, you’re not only earning rent along the way – you’re also growing an asset that could cash out big in the future.
- Inflation Hedge: Ever notice how the cost of living tends to go up over the years? Inflation means your dollar buys a bit less each year – which can erode the value of savings. Real estate can protect you here. Property values and rents usually rise along with inflation (13). If prices of everything go up 3% this year, chances are rents and home values did too. This means owning real estate is a classic hedge against inflation – the asset’s value keeps pace with, or even exceeds, the rate at which money is losing value. In fact, rental income is often cited as one of the best ways to hedge an investment portfolio against inflation (14). While the money in your savings account might be lagging behind rising prices, the rent you charge can adjust upward over time, and your property itself is likely appreciating.
- Tax Advantages: The U.S. tax code offers a basket of perks to real estate investors. For one, you get to deduct a lot of expenses related to owning property. Everything from the mortgage interest, property taxes and insurance to maintenance and repairs can often be written off against your rental income (15). There’s also a nifty benefit called depreciation – basically, the IRS lets you pretend your building is wearing out a little each year (even if it’s actually going up in value) and deduct that as a cost (16). These deductions can significantly reduce the taxes you owe on your rental income. And when it comes time to sell, real estate shines again: you can potentially defer capital gains taxes by using a 1031 exchange (reinvesting the sale proceeds into another property) (17). In plain English, that means you can keep rolling your profits into bigger properties without paying taxes on each sale. Plus, if you hold your property for more than a year, any gain qualifies for lower long-term capital gains tax rates. All these tax breaks boost your net returns and are a big reason real estate builds wealth effectively.
A smart Long-Term Move in Uncertain Times
Tariffs and trade disputes may come and go, and the stock market will likely continue it’s valid mood swings in response. As an investor – especially a new investor – it’s important not to let short-term turbulence derail your long-term goals. This is where real estate really proves it’s worth. It’s an investment you can see and touch, with value derived from real-world use (providing homes for people) rather than just investor sentiment. During today’s tariff uncertainty, real estate offers relative calm: you’re not checking Zillow every hour the way you might nervously check stock prices. Instead, you can focus on the steady rent checks, watch your property value trend upward over years, and enjoy the tax perks along the way.
In a volatile economic climate, real estate stands out as a solid, reliable investment. Mid-size multi-family properties in particular combine the stability of providing essential housing with the wealth-building benefits of regular income and appreciation. They can act as the ballast in your portfolio, keeping you afloat and of course toward your financial goals when other investment are tossing in the waves.
If you’re considering real estate for the first time, take heart that you don’t need to be a millionaire ar a real estate tycoon to get started. Do your homework on market, start with a property size that feels manageable, and a member, and remember it’s a long-term play. The goal isn’t to get rich overnight – it’s to build wealth steadily, whether the storms, and come out ahead. Given the current tariff-driven uncertainty, now might be an ideal time to lean into the stability and tangible value that real estate investment in your portfolio – it’s an investment in something real, enduring, and surprisingly resilient, no matter what the headlines say.
Bottom line: Tariffs or no tariffs, everyone needs a place to live. By investing in real estate, you’re betting on that basic truth – and it’s a bet that has paid off historically and continues to make sense in today’s uncertain economic climate.