Wealthy Say Real Estate Is A Good Investment

Real estate news By Citi Smith Barney poll
Feb 23, 2007, 12:05 pm PST

new survey by Citi Smith Barney says that over half of millionaires and 40 percent of affluent investors, those with $100,000 in assets excluding real estate and employer retirement plans, or approximately 25 percent of the U.S. population, surveyed believe that real estate is good investment.

That's because they practice what they preach. While about 67 percent of American residents own a home, and one in ten people of all economic backgrounds own a second home, the megawealthy. But among the wealthy, nine out of ten own some sort of real estate investment accounting for one-third of their portfolio, and most (52 percent) report that despite a softening housing market, their real estate investments have increased over the last year.

Outside of their primary residences, one in ten investors reported owning investment homes that they rent out, and a similar share say they are invested in a REIT for commercial property. Millionaires (18 percent) are more than twice as likely as those in lower income brackets (8 percent) to have commercial REIT investments. Just 3 percent of investors overall report owning commercial property, although this proportion increases to 14 percent among the wealthiest group of investors. Performance of these investments varies, however. REITs, in particular, are likely to be described as having increased in value. In contrast, 43 percent of those who own commercial property say those holdings showed no increase in value over the past year.

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