Individuals think real estate offers best returns

A survey of 1,000 investors indicated that most investors see real estate as the best investment option for the next decade. 27% of the survey responders indicated that real estate was the best option which is likely being pushed by interest rates being at all-time lows.

After real estate cash was listed as the second choice with 23% believing this to be the best option, and with stock in third place with 17% of the total vote. During the past three studies stocks were at the top of the list but the uptick in the stock markets and new geopolitical risks have driven down expectations surrounding stock returns going forward. Only 5% of respondents believe that bonds are the way to go over the next decade, which makes sense given their low yields.

Some analysts like Kenneth Griffin are worried that these results are indicative of a future crash in real estate exuberance for it contributed to the real estate crash in 2008 and 2009. Tempering that exuberance are stricter lending standards and increased regulations on mortgage lenders which make credit harder to come by.

However, analysts believe that the physical nature of real estate investments resonates more with individuals than the intangible nature of stocks and bonds, despite the added diversification that stocks and bonds provide to investors. Further, real estate investments often seem more price stable and secure as a result.

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