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Why the real estate market will rebound nicely…
April 15th, 2011
If you've read the paper or even glanced at the news just a handful of times in the last few years, then you likely noticed the headlines make it seem like real estate as an investment has gone the way of the pet rock.
It would be silly to believe our local real estate market will not return to its historical appreciation rate of around 6%, and here's why:
The obvious reasons first…
- Prices and the cost of owning are attractively low
- Rates are historically low
- Consumer confidence is growing and the job market is rebounding
Increased demand leads to growing values. It's no secret that the volume of real estate sales is in many ways tied to how comfortable people feel in making such a purchase, and confidence in our economy and job market are a key component of that comfort. Even with the aforementioned reasons, I certainly wouldn't mind more evidence in favor of a real estate rebound; recent surveys of both renters and homeowners sounds like a good place to look…
Pew Research Center, a "nonpartisan fact tank that provides information on the issues, attitudes and trends shaping America and the world through public opinion polling," recently conducted a survey of homeowners and renters which found:
- Only 24% of renters said they rent out of choice
- 81% of renters polled said they would one day prefer to buy a home
- 81% of adults polled either strongly or somewhat agree that buying a home is the best long term investment a person can make
This is by no means the first time I've seen survey results like this. Late last year Fannie Mae released their national housing survey findings of homeowners and renters polled between July and September 2010 that showed:
- 68% think it's a good time to invest in real estate
- 81% consider homeownership important to the economy
- 84% believe owning makes more sense than renting
Bottom Line: Peaks and valleys are not uncommon. A vast majority of current homeowners agree buying a home is a good long term investment. A vast majority of current renters want to one day own a home. It is these reasons that give credence to my confidence in real estate meeting the historical appreciation rate as a long term investment. Heck, I didn't even include the intrinsic, non-financial benefits of owning a home…
- Robert E. Wasser - Seattle and Bellevue real estate blog, news, statistics, and market trends
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