The constant stream of news stories about foreclosures, increased housing inventory, and the virtual collapse of home builders’ confidence may foretell a disturbing trend; and the negativity associated with housing could impact the market for years. Once seen as a solid investment, residential real estate has lost its allure for those who saw it as an effortless means of enhancing retirement savings. However, with an economy still struggling to come out of the worst recession in three quarters of a century, many have changed their opinion.
Having lost much of its perceived investment potential, housing must now rely to its emotional appeal—a place to create memories grounded in the concepts of home, stability, family, security, and sanctuary. Not to be scoffed at, many find such values to be worth far more than financial considerations.
However, we all have differing needs and perceptions; and the perception de jour seems to be that housing is a bad investment. And when analyzed purely for investment potential, housing often comes up short. While some tout the true values of home ownership, large numbers remain skeptical, remaining on the sidelines, anticipating that magical moment when stabilization returns to the housing market.
With long-term unemployment at record levels, consumer confidence shaken, and an awareness of the significant declines in home prices, residential real estate could be in a long-term struggle as the negativity associated with housing could impact the market for years.
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