03/13/2006
The average price of an American home has risen 36 percent over the past four years, according to the Office of Federal Housing Enterprise Oversight, but many affluent Americans expect prices to rise further. In a recent Bloomberg/Los Angeles Times poll of private investors, 43 percent predicted that home prices will rise in their neighborhoods over the next six months. Only 12 percent expect them to fall.
A large majority of affluent homeowners are even more optimistic about long-term home values. Nearly 70 percent of respondents expect the value of their homes to rise over the next three years by somewhere between 5 percent and 30 percent. More than 40 percent of high-net worth investors polled own a second home or investment property.
But poll respondents seemed less optimistic about their equity investments. More than 60 percent of affluent Americans expect their stock returns to be about average in 2006. Only 20 percent predict they will enjoy above-average performance. Investors are even more doubtful of their long-term prospects. Only 11 percent expect greater returns from their domestic stock investments over the next 10 years than they earned in the last decade. Nearly 60 percent expect to earn about the same.