For many years the word on the street was that local home prices here in San Mateo County, California correlated with the movement of the Nasdaq Composite Index. The stock market measure that is weighted with many of the local high-tech, Silicon Valley companies. The correlation between median home prices and the Nasdaq composite index between the first quarter of 2012 and the fourth quarter of 2019 is 0.937. Pretty close to perfect! The correlation between median home prices and the Nasdaq composite index between the first quarter of 2020 and the fourth quarter of 2021 falls to 0.883. Visually, however, you can see the trendlines cross paths.
Pre-pandemic, over the course of eight years the Nasdaq increased by 190% while the median home price increased by 153%. Post-pandemic, the median home price increased by 19% but the Nasdaq zoomed up 103%. It looks like the link is broken at least for the time being.
So far in early 2022 the Nasdaq index has been pummeled. It will be interesting to see if the two measures return to their previous trendlines over time.