Real Estate Investment: The Only Way to Go?

According to Real Estate Investor Grant Cardone, the housing market is “done in America.” Cardone told Yahoo Finance that the housing market will never come back, as sales of new homes fell by 7.8% last month, hitting a 5-month low, even as pending home sales notched a 1.1% gain.

Despite Cardone’s bearish outlook, he states that real estate is currently the only place he’s willing to invest. 

Recently, the Wells Fargo/Gallup Investor and Retirement Optimism Index revealed that investor optimism has dropped, and according to a Gallup poll, it’s real estate, not stocks, that are considered to be the best investment. The poll indicates that 35% of Americans believe real estate to be the superior long-term financial investment, compared to 27% who say stocks are the better investment.

Stock ownership has not quite reached pre-recession levels, and previous Gallup analysis showed that stock ownership has declined among most major U.S. subgroups since before the recession, with the exception of upper-income and older Americans. Gallup notes that their poll was conducted April 1-9, in the midst of a bull stock market and that with home values higher than they were before the recession, noting the likely returns.

The investors themselves are primarily small mom-and-pop businesses, rather than larger institutions, according to CoreLogic. CoreLogic notes that the amount of homes purchased for investment has increased to its highest level in nearly 20 years, and  this increase is from smaller investors rather than large institutions.

Investors are particularly focused on the rental market. Renting has picked up, with 36.6% of Americans as renters, up to a 50-year high, Yahoo reports. According to Cardone, the the Baby Boomer generation could be the cause of the rent increases. 

“We’re going to rent to 80 million Baby boomers in this country. Baby boomers are going to become the biggest renters in the country and millennials will follow,” Cardone said.