South Beach Real Estate - Investing in Condos

As our legendary home sales boom eases - existing-home sales are expected to dip 2.4 percent this year - analysts are triping over themselves to say real estate will lose it's attraction as an investment compared with stocks and bonds.

Nothing could be further from the truth. With vacation and investment properties accounting for more than one-third of home sales last year, it's clear household see real estate not only as a good investment but also as a sound alternative to paper equity shares whose value swings along with the economy, company management skill, and market competition.

Changes in our industry are helping to drive the attraction of real estate as an investment. Buying and selling propety is no longer a lengthy, awkward, and costly process. And mortgage innovation has made propety hoding more liquid. That said, typical household real estate investors aren't looking for double-digit percentage returns; they're purchasing propety to reap benefits not available from other investments: pride of ownership, tax deduction, equity to borrow against, and the ability to greatly leverage their downpayment.

To be sure, not all propety investment is made with sound principles in mind. Some investment is driven by speculation, and that isn't healthy. Its' the nature of human greed that, in any asset market that offers the potential for great income and wealth gains, some investors will look for short-term profit.

But it's important to separate the good from the bad. most home purchases - whether for a primary residence of a second home - are made rationally with an eye toward tomorrow, not just today. Most households aren't expecting double-digit price gains. Instead, they recognize real estate for what it is: a safe haven for their funds.

Real estate has played second fiddle to traditional stock and bond investments for too long. As an increasingly liquid asset, it ought to stand side by side with stocks and bonds in household investment and retirement portfolios.

That's a message analysts touting sotcks and need to hear.

This article brought to you by David Lereah - a senior vise president and chif economist for the National Association of Realtors..

Lereah is senior vice president and chief economist for the National Association of Realtors.