People have been saying for years that “a home is a good investment,” and it looks like young people are getting the message loud and clear. Business Week‘s Peter Coy shares some new research:
Yale economist Robert Shiller, author of “Irrational Exuberance,” says that one earmark of a speculative bubble in housing is when people start talking about a house as an investment rather than just a place to live. If he’s right, then younger people are more affected by a bubble mentality than boomers.
Forty-two percent of Gen X’ers and 39% of Gen Y’ers said they thought of a house purchase as an investment, vs. just 32% of boomers who felt that way. Boomers were more likely to think about buying a home because of a life event such as a job change or marriage.
There has absolutely been a shift in buyer mentality towards housing as a shelter for your money and not just your family. With the incredible appreciation that the housing market has experienced, my “Generation Y” clients have come to the table with expectations of continued appreciation of their homes.
If we choose to view housing primarily as an “investment,” we must also weigh ALL economic factors that influence prices–including but not limited to interest rates; types of mortgages available; supply and demand; and specific property elements such as location, size and special features like views and amenities.
I choose to view my primary residence as a shelter for my family first, and an investment second.