"It's about diversification"
“These are strange times for forecasters and analysts. Are we heading into a market lull? Or are we seeing the beginning of a significant downturn? Many of the fundamentals for housing are at a crossroads: Inflation, interest rates, demand, household incomes, prices, and whether homes are a good investment compared to other investments," said Marshall Prentice, president of La Jolla, CA-based DataQuick Information Systems. To cover oneself it’s good to be diversified.
The National Association of Realtors also recently revealed a slow down in price growth. Nationwide, the median existing single-family home price was $217,900 in the first quarter, up 10.3 percent from a year earlier when the median price was $197,600, but in the fourth quarter of 2005, the annual rate of home-price appreciation was 13.6 percent.
In the nation's priciest market, the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $746,800, prices were up only 1.4 percent in the past year, after years of appreciation as high as 20, 30 percent and more. In another formerly hot market, San Diego, CA, prices rose only 1.9 percent.
Some also speculate that recent slow downs in sales will inevitably push home prices down.
Another recent measure of affluent households -- those with $250,000 to less than $1 million in invested assets -- revealed that, among those looking to make increases in their investment portfolios, nearly 80 percent of them were shying away from real estate.
Much larger shares are going to retirement accounts, deposit accounts, mutual funds and stocks, according to Rhinebeck, NY-based Phoenix Marketing International, a marketing research and consulting firm.
"I'm not surprised that less than a quarter of those surveyed said they'd add to their real estate portfolio. After all, these people have seen very large increases in the value of real estate and, quite logically, probably think the market is overheated, as many do here in the Bay Area," said Romeo Danais, a Silicon Valley real estate investor for years, who says he's now pulling up stakes in Silicon Valley to invest in real estate in Oklahoma, New Hampshire and Texas.
David M. Thompson, vice president of affluent practice at Phoenix, says it's also about diversification. "As wealth increases, there is less percentage-wise in real estate, though not necessarily less in the total dollar amount. As affluent households get wealthier and become more complex, they get advice from professionals about diversification," he said.
The National Association of Realtors also recently revealed a slow down in price growth. Nationwide, the median existing single-family home price was $217,900 in the first quarter, up 10.3 percent from a year earlier when the median price was $197,600, but in the fourth quarter of 2005, the annual rate of home-price appreciation was 13.6 percent.
In the nation's priciest market, the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $746,800, prices were up only 1.4 percent in the past year, after years of appreciation as high as 20, 30 percent and more. In another formerly hot market, San Diego, CA, prices rose only 1.9 percent.
Some also speculate that recent slow downs in sales will inevitably push home prices down.
Another recent measure of affluent households -- those with $250,000 to less than $1 million in invested assets -- revealed that, among those looking to make increases in their investment portfolios, nearly 80 percent of them were shying away from real estate.
Much larger shares are going to retirement accounts, deposit accounts, mutual funds and stocks, according to Rhinebeck, NY-based Phoenix Marketing International, a marketing research and consulting firm.
"I'm not surprised that less than a quarter of those surveyed said they'd add to their real estate portfolio. After all, these people have seen very large increases in the value of real estate and, quite logically, probably think the market is overheated, as many do here in the Bay Area," said Romeo Danais, a Silicon Valley real estate investor for years, who says he's now pulling up stakes in Silicon Valley to invest in real estate in Oklahoma, New Hampshire and Texas.
David M. Thompson, vice president of affluent practice at Phoenix, says it's also about diversification. "As wealth increases, there is less percentage-wise in real estate, though not necessarily less in the total dollar amount. As affluent households get wealthier and become more complex, they get advice from professionals about diversification," he said.
posted by Ken Calhoon at 7:26 AM
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