What downturn? Real estate beats stocks, home buyers say
OK, the regulars on this blog will love this one.
Our newest crop of starry-eyed home buyers is apparently none too worried about predictions of further price declines.
In fact, the average Bay State home buyer is absolutely bullish about real estate as an investment, according to a study just released the Massachusetts Association of Realtors.
More than half - 54 percent - contend their recent purchase of a home is a better investment, in terms of pure financial returns, than the stock market. And roughly another 30 percent believe their home is as good an investment as stocks.
Amazingly, that leaves just 16 percent of new buyers not blinded with fanciful visions they are buying a lucrative investment product.
Whether or not you like the results, however, the survey's results do appear to point to a budding trend.
Let's face it, the stock market stumbling again and there are predictions in some quarters that real estate has bottomed out.
So the idea of real estate as just another investment venue for the average Joe or Jane is starting to make a comeback after a short breather.
Just last year, less than half of all new buyers, or 47 percent, thought their newly purchased home would be a better bet financially than the stock market, MAR reports.
In fact, you can see evidence of this shift in the downtown condo market as well, where small-time speculators have been snapping up condos.
There's the doctor who's paying cash for condos in the West End and Back Bay, and then turning around and renting them out. He's happy with what he claims are steady, 5-7 percent returns, notes John Ford, head of downtown brokerage Ford Realty.
"He has more faith in the Boston rental market than the stock market," Ford said.
Of course, the reality is anyone buying now is likely putting money down in what is still a declining market.
Some economists are predicting another tumble in home prices in the coming year - it's not likely Greater Boston will escape totally unscathed.
Does that mean don't ever buy? Hardly. But don't trick yourself into thinking you are buying an investment vehicle when in the end you are just buying a home.
