Real Estate vs. Stocks Over The Last Decade. Which Would You Rather Be Invested In?

  While no investment has really been safe over the last decade, it may surprise you to know that real estate has been one of the better investments over the past ten years.

Forbes.com reported on this issue two days ago:

With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit: Housing had a superb decade. In fact, the value of a square foot of housing in the U.S. is up 58% from its January 2000 level, according to data from New York housing analytics firm Radar Logic on the 25 largest U.S. metropolitan areas. That represents an average annual gain of 4.3% in the value of one square foot of housing.

The growth in average U.S. housing values looks pretty impressive compared with that of other assets, especially stocks. The S&P 500 is lower now than it was in January 2000. So is the Nasdaq. Even factoring in inflation, which ran between 2.5% and 3.5% for most of the decade, a home purchase really did produce wealth for anybody who opted to sell some stocks and buy at around the time the dot-com crash got rolling.

While not all areas performed as well as others, overall the better investment over the past decade has been in real estate. Of course, this is based on someone purchasing a home in the early part of the decade. Those that purchased in the mid 2000's were not so fortunate.

What will happen in the next decade? No one knows for sure. I Remember though, sitting around the table, listening to my relatives talk about how they could have bought the house down the street for some ridiculously low price years ago. I feel this is where we're at today. The deals are out there and they aren't hard to find.