For as long as anyone can remember real estate has been the best long-term investment for those looking to expand their portfolio as well as become real estate tycoons. Of course, the lifestyles and the rich and the famous are far from what you get when you invest in real estate, but for much of its storied history real estate was the surest investment you could find. Then the housing market came to a crashing halt in 2007-2008 and all of a sudden the world’s most secure investment began to hemorrhage family fortunes leaving many penniless and without a home. So, what has changed in the past 7 years to restore faith in such a volatile market? Nothing. …and yet everything.
The market has slowly been earning back the faith that was once bestowed upon it by cleaning up regulations and selling houses at a steady clip. Sure, the inventory for houses has been down in 2014 relative to the demand for houses, but that is actually a good thing showing that there is a hungry base out there looking to invest in the housing market once again. According to the National Association of Realtors (NAR) homes are selling at an annual rate of 5.17 million. This means that 14,100 houses sell every day giving us the highest pace of 2014. These numbers are in spite of homes appreciating rapidly and the national mortgage rate climbing. Faith in real estate as a long-term investment is returning in waves so big you could surf them. The Gallup organization conducts an annual report entitled the “Economy and Personal Finances Poll,” which asks Americans to choose the best option for long-term investment. Many investment categories are listed from gold and stocks/mutual funds to savings accounts/CDs and bonds. It was no surprise that real estate returned to the top position over other the other investment categories.
Back in 2011, gold was the most popular long-term investment among Americans. This, of course, during the sad state of affairs the real estate market was in. However, with the housing market improving across the US and home prices rising, more Americans now consider real estate the best option for long-term investment…and it’s not even close. Some statistics from the poll shows:
- 30% of all people believe real estate to be the best long term investment over gold and stocks/mutual funds tied at 24%.
- 34% of those between 30-49 years of age believe home ownership is a good investment (stocks/mutual funds come in at 23%).
- Real Estate is most popular in those making $75k a year or more (38%) but it still a popular choice amongst those with more modest incomes.
You see, the housing market may have rightfully lost the faith of the American people, but it was never going to be displaced for too long. The American Dream all too often involves home ownership in some form or fashion. Americans still believe in that dream and thus have returned to find that the real estate market has received nicely and is once again waiting to earn your faith.