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Optimism abounds in local real estate

(Editor's note: This is the second of two parts. Read Part 1.)

The recent Morgan Stanley Wealth Management Investor Pulse Poll had some interesting findings.  Denver investors sense improvement in their local housing market, and at least three in 10 believe real estate will be the best-performing asset class over the next three years.

  • In an important step for the Denver housing market, 64 percent of Denver investors sense improvement in their local housing market (price appreciation of 10 percent or more) — compared with 41 percent nationally.
  • However, 63 percent say the timing is good to buy a primary residence (lower than 74 percent nationally), and 21 percent say commercial real estate prospects are good (lower than 28 percent nationally).
  • Also, 47 percent have seen foreclosure problems close to home, similar to 43 percent nationally.

Millionaires are different

Investors with household assets of $1 million or more are more likely to see improvement in their portfolios from 2012 (74 percent versus 48 percent in lower asset group) and, predictably, are less likely to be concerned about financial issues impacting their personal finances in the long-term, such as:

  • Funding a child’s education (23 percent vs. 50 percent, total Denver investors);
  • Providing financial assistance to older adult relatives (17 percent vs. 37 percent);
  • Paying off student loan (18 percent vs. 32 percent).
  • Being a financial burden on children (14 percent vs. 30 percent)

Millionaires are also more interested in the oil and gas industry relative to total investors (50 percent have invested vs. 29 percent; 45 percent plan to invest vs. 30 percent). They are also more bullish on REITs (54 percent vs. 31 percent) and commercial real estate (33 percent vs. 21 percent).

Financial advice in high demand

Guidance, analysis and clear communications are the leading expectations for financial professionals among the 77 percent of Denver investors who have one:

  • 85 percent want guidance on their portfolio asset allocation;
  • 85 percent want clear communication on how assets can contribute to a retirement income stream;
  • 84 percent want guidance and resources on changes in the fed tax policy & exemptions;
  • 82 percent want both analysis of the economy and potential portfolio impacts;
  • 81 percent want downside portfolio protection;
  • 75 percent want new investment ideas.
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Todd Hauer

Todd Hauer is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley Smith Barney in the Denver Tech Center. He can be reached at 720-488-2406 or toll free at 1-800-347-5099, or you can email him at Todd.Hauer@morganstanleysmithbarney.com.

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