In another sign that the housing crisis has ended and that home sales and home prices have recovered, people view real estate as the best long-term investment they can have.
According to a new poll from Gallup on preferred long-term investments:
Americans today are more likely to think real estate is the best option for long-term investments than in the past, ranking it ahead of gold and stocks.
The percentage favoring real estate was 30. Gold and stocks were tied at 24%. The value of these two sets of assets have moved sharply in different directions recently, with the price of gold collapsing and most stock market indexes near all-time highs.
SEE ALSO: Eight Markets With the Highest Distressed Home Sales
Wealthier Americans favor real estate more than other groups. Some 38% of people with incomes of more than $75,000 picked real estate as the best long-term investment. For people with incomes of less than $30,000, the figure dropped to 28%. Gallup researchers mentioned as the reason for the difference:
Upper-income Americans are much more likely to say real estate and stocks are the best investment, possibly because of their experience with these types of investments. Upper-income Americans are most likely to say they own their home, at 87%, followed by middle (66%) and lower-income Americans (36%).
As the home market has recovered, so has real estate’s presence at the top of the Gallup long-term investment list, which means its position may be precarious. In 2012, the percentage of people who rated it in the top spot was only 19%. The preference for real estate appears to track the comeback of the market. If housing prices level, or if a slow economy or higher interest rates force people to consider whether they can afford to own a home, the bias toward real estate as measure by Gallup may drop. The same could easily be the case with stocks, if the correction some experts expect actually happens.
Gallup’s conclusion from the study:
Different investment options historically offer different levels of risk and different rewards. Savings accounts and bonds are historically safe, but do not offer as high of returns, and Americans typically don’t regard those as the best investments. While stocks can be more volatile, they also can offer huge returns. What Americans view as the best choice for investing reflects myriad factors and is influenced by how the investment is currently performing and respondents’ biases toward where they are invested.
In other words, a year from now, when Gallup does the poll again, results could be substantially different.
Furthermore, note that there are homes for sale in Detroit for as little as $1,000.
And home foreclosure rates are still very high, according to some research.
Methodology: Results for this Gallup poll are based on telephone interviews conducted April 3 to 6, 2014, with a random sample of 1,026 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
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