Poll: Real Estate is the Best Investment

From 2007 to 2009, the Great Recession dealt a huge blow to both the U.S. housing and stock markets. As a result, confidence in each of these long-term investment choices saw large declines among the American people, who were unsurprisingly hesitant to risk being burned again. Fast-forward to 2016, and both markets have seen strong recoveries in the intervening years; however, confidence in real estate has grown much more robustly than confidence in stocks. In fact, a new Gallup poll shows that not only is real estate the top long-term investment choice among Americans, but that it has widened its lead over the competition! In the past five years, other options, such as bonds and savings, have shown either little change or, in the case of the top choice from 2011, a large decline.

Conducted between April 6 and 10, Gallup asked 1,015 American adults (18+ years old) to choose their top choice for "best long-term investment" from among several options. As has been the case in each poll since 2013, real estate was the most-chosen answer among those surveyed, garnering 35% of the votes! When compared to the relatively meager 19% that chose real estate in 2011, the strong growth of confidence in housing becomes apparent.

While the percentages are impressive on their own, so is the growing lead that real estate holds over second place, which has been stocks and mutual funds since 2014. In last year's rendition of this poll, the gap between the two choices was 6% (31% vs 25%), whereas this year it grew substantially to 13% (35% vs 22%)! Although the two options were in similar positions in 2011 (19% for real estate and 17% for stocks), real estate has shown the much stronger recovery in confidence, increasing in each of the last 5 years. Stocks had also seen steady (though more modest) growth until this year's 3% fall, which was likely due to the rocky start to the year for the stock market.

In 2011, real estate was a distant second among long-term investment options, but stocks weren't #1. Can you guess what was...? GOLD! That year, 34% of respondents chose the precious metal as their top option. Fast-forward to the present day, and that number has fallen to 17%, with a trajectory that is almost a direct inverse of real estate's rise. A check of price history shows why this is the case, with gold prices falling from $1,910 per ounce in August 2011 to $1,254 per ounce in April 2016. In almost the same time frame, the average sale price of a new U.S. home rose from $259,300 to $348,900.

The poll also revealed some interesting deviations in long-term investment strategies between subgroups of Americans. For instance, men were more likely than woman to select gold (22% vs 14%) as their top choice, while women were more likely to select savings (18% vs 12%) or bonds (8% vs 5%). Another difference is observed between age groups, with Americans under 30 being the least likely to choose real estate (26%) and the most likely to choose savings (26%). Finally, even renters appear to know the value of home ownership, with a similar amount of the group selecting real estate (32%) as did actual home owners (34%).

Source: More Americans Say Real Estate Is Best Long-Term Investment

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