americans sour on real estate

Affluent Americans sour on real estate
In survey, one-third of wealthy respondents expect real estate decline during the next year.
By Christian Zappone, CNNMoney.com staff writer
June 6, 2006: 6:48 AM EDT


NEW YORK (CNNMoney.com) - America's wealthiest have higher hopes for their stocks this year, but are worried about prospects for real estate, according to a survey released Tuesday.

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. On average, they expect an 8 percent return from U.S. stocks.


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Faith in the real estate market, however, 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. That number is up from 14 percent who thought that last 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. Eighty-three percent of respondents listed this as their greatest concern, up 2 percentage points from the previous year.

Alternate investment vehicles such as venture capital-, private equity-, and hedge funds make up less than 5 percent of a typical affluent investor's portfolio.

Regarding the federal estate tax rate, 47 percent said there should be no estate tax. The majority, however, believe 18 percent would be an appropriate estate tax rate.

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