INVESTORS’ CORNER: Americans Still Say Real Estate is the Best Long-term Investment

According to an April 2017 Gallup Poll, American’s perceptions of the best place to put their money for the long term is not in the stock market or in mutual funds, gold or silver, bonds, CDs, or in savings accounts. For the fourth straight year, real estate ranked number one as Americans’ favored choice. In fact, 34% of Americans are choosing real estate as their preferred investment asset, followed by 26% favoring the stock market, 18% choosing gold, 13% for savings accounts and CDs and only 5% preferring bonds. Since 2011, Americans’ inclination for traditional savings accounts and CDs have been consistently muted, given that interest rates have been at or near historic lows.

Some interesting demographic results of the survey revealed that almost half the residents of the West named real estate as the best long-term investment, verses one third of their counterparts living in the South and East and only a quarter of adults in the Midwest. Other differences in attitudes toward the various investments were that adults in households earning less than $35,000 per year are less likely than those in more affluent households to value real estate and stocks, but more likely to value savings accounts and CDs. Few younger adults (aged 18-34) favored savings accounts/CDs and more older adults, over age 55, chose stocks as the best investment. The highest age group to favor real estate is 35-54 with slightly more men than women in this category.

According to the Gallup Poll, one reason more Americans were not mentioning stocks as their preference was that barely half of adults reported owning any. Stock ownership is also strongly related to age, perhaps explaining why young Americans are not as confident as older adults in stocks as a long-term investment.

In 2011, real estate trailed gold but since then has steadily worked its way up the rank-order topping off the list in 2014 and remaining in the lead with stocks moving to second place since 2015 and gold slipping to third.

Even with the increase in housing prices as well as stock values rising over the past year, Americans’ preferences for real estate and stocks have remained steady.

Susan Jensen is the Executive Director of the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. She can be contacted at [email protected]. For more information, visit www.MetrolinaREIA.org.