Don't look now, but those with a net worth of more than $1 million who may have gotten burned in the stock market are starting to get interested in one of the most basic of investments-real estate.
That's according to a recent Spectrum Group newsletter, Millionaire's Corner. Nearly 20% of high-net worth investors consider real estate a good investment and plan to buy more in the future, says Spectrem Group, a Chicago-based market research and consulting firm specializing in the affluent market. Moreover, a full 34% of millionaires between 25 and 45 are intrigued by real estate. The research came from online quanititative studies of more than 750 millionaires and focus groups in five cities conducted last fall.
The millionaires reported that since they don't know when the stock market is going to recover and with interest rates so low and real estate so depressed, "a lot of the people said they thought real estate looked interesting," George Walper Jr., president of Spectrum Group, told Barron's. He said the finding was consistent with research in a book he co-authored with Catherine McBreen, Get Rich, Stay Rich, Pass It On.
While the millionaires didn't specify the type of real estate they'd look at, Walper said he believes people are interested in income-producing properties like small apartment buildings or strip malls. That would be in keeping with activity by one supremely savvy investor- Warren Bufett's No. 2, Charlie Munger- who is said to be investing in a shopping center in California.
Source: Barron's, Jan. 26, 2009
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