Wealthy Are Betting That Home Prices Will Stay High...
Amid signs that housing markets might be cooling, the majority of wealthy Americans remain optimistic that their homes will continue to appreciate in value, according to a survey conducted for the PNC Financial Services Group.
According to the survey, 65% of those surveyed said they expect to see double-digit increases in the value of their primary homes over the next five years, with nearly one-third expecting an increase of 20% or more in the value of their home over that period.
Fewer than one in 10 respondents expect to see any decline in the value of their home over the next five years.
"Our findings indicate that many among the wealthy will not believe there is a real estate slowdown until they see it reflected in their property values, especially in regions of the country where prices have skyrocketed during the past five years," said Nicholas Buss, PNC's real estate economist.
He noted that most wealthy Americans have not been speculative buyers of real estate, saying that the party may be over for those who have made a quick profit from property "flipping" in recent years.
He also noted regional differences, saying that Floridians are more bullish about the prospects for residential real estate than New Yorkers and New Englanders. Californians are close to the national norm, according to the PNC survey.
Of the 32% of wealthy Americans who own a second vacation home or condo, nearly two-thirds say they purchased a second home for personal use rather than as an investment. Only 19% said they purchased a second home as an investment.
The survey was conducted by Harris Interactive. Respondents had incomes of at least $150,000 and investment assets of at least $500,000 if employed. Among retirees, respondents had to have investment assets of at least $1 million.
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