For the last 2 years the housing market has made a great turn toward recovery, thanks in no small part to the recovering economy. After what looked like the final chapter of the American housing market, the recovery began and slowly the American perception changed as well. The better the number looked the more Americans bought into the idea that we were, in fact, headed in the right direction. Of course, the American public opinion of the market took longer to recover than the actual market (and there is still a long way to go), but it would appear that recently Americans have begun trusting the market again after asking “is real estate heading in the right direction?”
For the first time since 2006, Americans have an overall positive view of real estate, giving the industry a 12% positive ranking in a Gallup poll. Americans were asked to rate 24 different business sectors and industries on a five-point scale ranging from “very positive” to “very negative.” The poll was first conducted in 2001, and has been used as an indicator of “Americans’ overall attitudes toward each industry.”
How does today’s new enlightened attitude stack up against the opinions of yesteryear? Well, the graphic below is a pretty good indication of where we are and just how far we’ve come.
As you can see, Americans’ view of the real estate industry began its decline in 2003 to the point where the perception actually became negative between 2006 and 2007. Finally the fall bottomed out at -40% in 2008. Gallup offers some insight into the reason for the decline:
“In late 2006, real estate prices in the U.S. began falling rapidly, and continued to drop. Many homeowners saw their home values plummet, likely contributing to real estate’s image taking a hard hit.”
For many homeowners, when the price of your house drops you begin to lose faith in the market and in your investment. Like all stocks, at some point the housing market was bound to start coming back down, but very few predicted the bottom falling out the way it did.
“The large drops in the positive images of banking and real estate in 2008 and 2009 reflect both industries’ close ties to the recession, which was precipitated in large part because of the mortgage-related housing bubble.”
The bubble burst and many Americans could do nothing but have a negative opinion of the housing market. The recession had much to do with the -40% approval rating of the housing market.
“Although the image of real estate remains below the average of 24 industries Gallup has tracked, the sharp recovery from previous extreme low points suggests it is heading in the right direction.”
Do you hear that? The professionals believe we are headed in the right direction, and for the most part, we are. If you are considering buying we encourage you to formulate your own opinion on the direction of the housing market here in Portland. We know there is no place like Portland to live, but you may find out that there is no place quite like Portland to make your first home purchase/investment.