Americans say real estate is best long-term investment
by Tracey Boyd
When it comes to long-term investments, Americans love real estate, and, in recent years, that belief in real estate as the best long-term investment option only has strengthened.
According to the article “More Americans Say Real Estate is Best Long-Term Investment” by Jim Norman on Gallup.com, the percentage of those surveyed in a Gallup poll who chose real estate as the best long-term investment option rose to 35% in 2016, with stocks and mutual funds coming in second with 22%.
In the poll, those surveyed were given five options to choose from. Gold (17%) ranked third, followed by savings/CDs (15%) and bonds (7%). In 2011, gold was favored by 34 % of Americans, compared with 19% for real estate, Norman noted in the article. However, since 2014, real estate has been the clear preference.
Stocks and mutual funds have made major gains since the 2008 stock market crash, yet Americans still have not embraced them, Norman wrote. He also noted that 17% of Americans chose stocks and bonds as the preferred long-term investment in 2011, when the Dow Jones industrial average still was below pre-crash levels, and although the Dow was about 4,000 points above its pre-crash high of 14,164 when the 2016 poll was taken, the percentage of those choosing stocks and bonds as the best long-term strategy had risen to only 22%.
In contrast, Norman noted, as the average sale price of new homes in the U.S. rose from $259,300 in 2011 to $348,900 in February 2016, the percentage of Americans choosing real estate as the best long-term investment option almost doubled.
Norman theorized in the article that the widening margin between those choosing real estate over stocks and bonds might simply be a return to the norm. He pointed to a 2002 Gallup poll (which did not include gold as a choice) that showed 50% of Americans named real estate as the best long-term option, compared with only 18% for stocks, 16% for savings accounts and 13% for bonds.
A recent Bankrate national survey showed many of the same results as the Gallup poll, according to the article “Real estate is top investing choice, with stocks only tied for third, survey finds” by Claes Bell published on Bankrate.com.
In the survey, people were asked to pick the best way to invest money they wouldn’t need for more than 10 years, and the most popular answer was real estate, followed by cash investments, such as CDs and saving accounts, according to the article. The stock market was a distant third, tied with gold and other precious metals.
Sterling White, co-founder of Holdfolio, a real estate investment firm, said in the Bankrate.com article there is a simple reason a quarter of those surveyed picked real estate as the best long-term investing option: “Houses are tangible. You can physically see and feel the product. So you know where your money is going: It’s going into that house," he said in the article. "With stocks, you have no clue where your money is going.”