A new survey reveals that 70 percent of Americans would advise friends and family to buy a house, Thomas Wilson, CEO and chairman of the insurance company Allstate Corporation, told CNBC Friday.
“The underlying demand for houses has not changed, despite the fact that consumers are more conservative and want to save more,” said Wilson, who is also vice-chairman of the Chicago Fed.
“By a factor of 4 to 1, they think investing in a home is a better deal than investing in the stock market,” he said.
The survey, called the Heartland Monitor, released quarterly, is a joint project of Allstate and the National Journal. The respondents, 66 percent of whom are homeowners, are geographically located across the country.
Highlights of the survey are:
- 63 percent think the current housing crisis is temporary
- 59 percent say they are living the American dream
- 58 percent believe that achieving the American dream is tied to their own skills and hard work rather than the state of the economy.
So we have to ask why some areas are performing so well and other so poorly? The answer across the board seems to reflect the reality that the wealthy markets are recovering soonest and strongest. The New York real estate market is performing very well in the first quarter of 2011. Cyclically, it may be true that after a recession hits, interest rates drop to fuel activity, and industry cuts costs, mostly through lay-offs. Once companies show signs of becoming profitable, they start to hire again and the trickle down effect takes effect. While this is happening, the rich are investing their cash reserves to make big money. (Imagine you had invested $ 1 million into the DOW in March 2009……that would be worth almost double to-day.)