The lead into Fortune Magazine’s April 11, 2011 cover article says it all. “Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing. It’s time to buy again.”
The analysis covers cities nationwide. The conclusion, a positive long term outlook both for markets considered to be “Non-distressed,” and those that have had high foreclosure rates. The report takes into consideration the levels of new construction, lower home values, and low interest rates, among other factors contributing to their conclusion.
The article states that in many “Foreclosure” markets, properties are “being converted to rentals either by investors or their current owners. Those properties are finding plenty of renters.” It continues, “Remember, the millions who lost their homes to foreclosure still need somewhere to live.”
Mark Zandi, Chief Economist for Moody’s Analytics expects that in distressed markets, “prices will fall a couple of percentage points,” but Zandi concludes that “they will need to bounce back because they’ll be far too low compared with rents and replacement cost.” The article predicts that, “Renters will come off the sidelines to purchase homes in the years ahead.”
Fortune Magazine's "The Return of Real Estate" Cover Story
Guarantee Real Estate wrote a great summary of Fortune Magazine's Cover Story on "The Return of Real Estate". The original summary is here, or below. The original story on Fortune's website can be found here.