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Barron's Dubs Real Estate "The Single Best Investment for the Next Decade"

Updated: Apr 23, 2020

Photo Source: | Photograph by Breno Assis

A recent Bankrate survey asked over 1,000 investors: "For money you wouldn't need for more than 10 years, which ONE of the following do you think would be the best way to invest it - stocks, bonds, real estate, cash, gold/metals, or bitcoin/cryptocurrency?"

And the winner was..... Real estate.

"The stock and bond markets are currently so overvalued that it’s not only possible, but downright plausible, that real estate will do better than either of these asset classes over the next decade."

Barron poses the question: "how will real estate perform during a major stock market decline?" and, given the all-too-fresh memories of real estate's negative performance during the latest financial US crisis, many consumers may be avoiding real estate under the mindset that it's even riskier than stocks.

But, the article goes on to say that real estate's experience during the financial crisis appears to be the exception rather than the rule. "In every other stock market bear market since the 1950s, the Case-Shiller Home Price Index rose in all but one. And in that lone bear market prior to 2007 in which the index did fall, it did so by just 0.4%.

The Case-Shiller index has been less volatile than the stock market (a lot less). As measured by the standard deviation of annual returns, in fact, the Case-Shiller index is only 40% as volatile as the overall stock market. Perceptions to the contrary that real estate is riskier than equities derive from the leverage we typically use when purchasing real estate. Note carefully that the risk comes from the leverage, not real estate inherently."

What does this mean for you?

If you've been on the fence on whether to invest in real estate or stocks/bonds, you might take this as a sign that now is the time to make a move on that property you've been keeping an eye on - or begin your search for your next home.

We'd be delighted to help you find a property that checks all your boxes - feel free to reach out to us anytime for a quick chat! (805) 450-6233


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