Got to love the optimists… PNC did this survey of 200 wealthy South Floridians, and heard a level of optimism not heard much these days.

We believe that South Florida real estate remains a good investment,” said Robert Saltarelli, regional president of PNC Advisors in Naples. “Depending upon the individual client’s income and liquidity needs, we believe that a portfolio with 20-25 percent invested in real estate in this region is appropriate and should continue to deliver solid returns.”

Highlights of the real estate findings in Florida include: – Nearly three quarters of Floridians surveyed said they expect to see double-digit increases in the value of their primary homes over the next five years. – Just one in 20 wealthy South Floridians (5 percent) expects any decline in the value of their primary homes over the next five years. – Just one in five South Floridians say they got rich through real estate, but those who did are twice as likely to expect their real estate values to continue to increase. Nearly nine in 10 (89 percent) who say residential real estate is a major source of their wealth are expecting double-digit increases over the next five years, and 81 percent are expecting an increase of 20 percent or more, compared with 42 percent nationally. – Four in 10 (39 percent) South Floridians surveyed said that a major decline in housing prices would pose no threat to their family’s wealth. One in five (19 percent) said it would pose a threat. via Finanzan.net

Is this an indicator of “only so much waterfront”, realistic expectations, or groupthink?

Dean Foust from over at Business Week (b)logs in on the topic. He and I see eye to eye on the short term projections, and disagree on the long term.

What do I think? I think there’s a parallel to what happened in stocks. Not predicting a nationwide 30% downturn, but perhaps a 10% to 20% downturn in overheated markets, followed by a long stretch–perhaps a decade or more–of flat returns. I think there’s a good chance that come 2015, Americans will be so conditioned to earning NOTHING on their home that the days when housing was viewed as an “investment” will seem quaint.

 

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