Real Estate: The Future

Real Estate business might be experiencing its downfall when the Great Recession happened 8 years ago, is it safe to say that this coming years might be the great comeback? The “American Dream” might take a while for the younger generations who are mostly mobile and consider housing as overrated investment. After watching their parents gone through the great recession, buying a home is a risk not worth to take. Younger Americans still prefer renting rather than racing through owning a home.

In a popular post this week, George Mason University economist Alex Tabarrok also denounced home ownership on his blog “Marginal Revolution.” He cited what the economist think about buying vs renting.

“Housing is overrated as a financial investment. First, it’s not good to have a significant share of your wealth locked into a single asset. Diversification is better and it’s easier to diversify with stocks. Second, unless you are renting the basement, houses don’t pay dividends. Stocks do. You can hope that your house will accumulate in value but don’t count on it. Indeed, you should expect that as an investment your house will appreciate less than does the stock market.”

When the competition in getting a stable employment in the US gets tougher, this generation could only hope for how to sustain financial stability. “Deteriorating housing affordability will drive 2016 housing trends,” according to Zillow’s 2016 housing-market outlook published earlier this week.“A lack of affordable homes near city centers will push new and first-time homebuyers to suburbs that feel like walkable, amenity-rich mini-cities.”

2016 might start higher interests rate proposals on housing market but this won’t be as bad as it was when the great recession happened. The future of real estate might be brighter after all. If we counter this generation’s challenge with a greater cost that they are willing to risk.

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