A respected bastion of United States consumer sentiment, the Gallup Organization shares tidings that 44% of Americans now view real estate positively, while 21% view this area that touches so many of our lives negatively.
Eight years ago, that very data point spoke of utter desolation. Gallup's benchmarks on American consumer households' view of industries have been around since 2001. In 2008, the indexed U.S. household sentiment toward real estate clocked in at -40, a 75-point negative swing from its housing boom net positive high of 35 in 2003. The current rating (derived by subtracting the percentage with a negative view of the industry from the percentage of a positive view) is 23.
Here's Gallup's picture of where Real Estate fits in as a trending consumer sentiment indicator, compared with a bucket of other industries ranging from auto to banking to oil and gas to the federal government.
That's progress, and Gallup analyst Jim Norman notes that real estate has even become an outlier in its gains during the glacially slow trajectory upward since 2011. Here's Norman's "bottom line" take-away.
No industry's reputation suffered more than the real estate sector's during the financial calamities that began with the collapse of the housing bubble in 2006 and 2007. Year by year, however, this industry has managed to turn around the negative views of many Americans as housing prices have climbed past pre-crash levels. The public now holds an overall view of the sector that is the most positive since 2005. The industry's image improved in 2016 even as the overall ratings for the 25 industries tracked by Gallup slipped slightly. Combined with the public's renewed belief that real estate is the best long-term investment, the higher ratings give cause for optimism in an industry that has seen more than its share of ups and downs since the turn of the new century.
Consumer sentiment and confidence rank among housing's leading indicators, along with job formation and income growth. Almost two out of five--double the amount from 2011--Americans choose real estate as the "best long-term investment," and as this wonky, politically risky, and environmentally temperamental world exposes new challenges to one asset class after another, U.S. real estate pops out as one of the few safe havens after all.
Point is, this data point is a positive now, even as the U.S. and world economies continue to send out mixed signals about the strength and trajectory of the molasses recovery.
In an environment of uncertainties and a high-volume noise level leading into November's general elections, strong consumer sentiment on real estate is a welcome bright line. With a focus on household wages--current and potential--and their strong or weak correlation to house prices and values, wrinkles, opportunities, and even some moonshot wins will come to those who put data points like this one to work. It's a matter of being able to serve the underserved.