My friend and seasoned real estate journalist Pat Curry has written a great blog over at Cyberhomes.com.
She asks the question, “Are homes good investments”? As stated by Curry, homes have no doubt been a solid investment in the past, but due to economic turmoil and a slumping housing market, everyone is questioning the strength of its return power.
As a whole, I do not think homes will be seen as investments in the future. Our parents bought houses as a “home” where they would raise a family and live for a long time. The result was they bought a house, stayed a long time and therefore made a profit when they sold it.
In the past 10 years people have been buying homes as an investment thinking they were going to make 400% profit. It was not so much about the “home” but the profit. I think real estate will come back as a way to make money, but I don’t’ know if the Gen x and y buyer will jump on that bandwagon. They are skeptical of the establishment and they seem to be buying more for what they love and not just what they will make on it.
There is a great article by Market Watch that talks about added home value with walk able communities. This proves my point in a way. People are beginning to value homes that are conducive to their lifestyles. In this case, being able to walk to school, shopping, and amenities.
When the housing market does return, I think we will better see this attitude change. The foreclosure rates paint a great picture of how many people lost their investments. I truly believe that average homebuyer will shift their mindset away from investing and more towards finding a true home. America has learned a hard lesson in real estate investing these past few years. The future will reflect that.