Affluent Buyers Expect Real Estate Decline

It seems counterintuitive - but the numbers speak for themselves. While luxury home sales are soaring, America’s wealthiest consumers have high hopes for their stocks this year, but are worried about prospects for real estate, according to a survey released Tuesday.

First-time home buyers seeking an afflordable Florida home loan are still dedicated to purchasing their dream house, but nine out of 10 wealthy portfolio holders said they expect their portfolios to rise in 2006, according to the 2006 U.S. Trust Survey of Affluent Americans. No thanks to real estate, however. On average, they expect an 8 percent return from U.S. stocks.

Faith in the Florida housing market and across the nation was weak: Only 48 percent said they expect real estate’s value to increase in the next year, down from 72 percent who thought it would in last year’s survey.

Thirty-three percent of respondents expect real estate values to decline over the next year. The survey, conducted by asset manager U.S. Trust, polled Americans with annual adjusted gross income of more than $300,000 or net worth greater than $5.9 million.

Concerns about the economic future of the next generation topped the worries of the wealthy. Confidence of home buyers across the board has been faltering recently, as eighty-three percent of respondents listed this as their greatest concern, up 2 percentage points from the previous year.

What are investors to do? Interest in other ventures such as hedge funds as increased. As Florida home loan rates continue to rise, many buyers are hesitant to enter into the market.