Millennials Crash Real Estate Investing Party (moving away from stocks and into tangible assets)

Americans have stashed the majority of their investment dollars in the stock market over the years. But there may be a new trend on the horizon. In 2007, nearly two-thirds of Americans were investing in the stock market; last year, just over half did. A new generation of investors may be turning to real estate instead.

Screen Shot 2017-06-14 at 9.39.29 AM

RealtyShares recently teamed up with Harris Interactive to put out the Real Estate Investing Report, surveying Americans on their investment preferences. And according to the survey results, 55 percent of millennials are interested in investing in real estate, the highest percentage of all demographics questioned. Research from Fannie Maesupports these findings, reporting that 85 percent of millennials think real estate is a good investment. With such a strong preference for real estate, it is important to understand why millennials are interested and how they may invest in the future.

Why is it important?

Well, last year, millennials became the largest generation of Americans. According to a recent Pew report, there are 75.4 million millennials compared with 74.9 million baby boomers. As the largest age group in America, millennials will have the greatest ability to shift the market as their net worth builds, rendering it key to take note of millennials’ views on real estate and investment opportunities overall.

Millennials are skeptical of the stock market

Survey respondents were asked to choose between stocks, real estate, commodities, bonds, and cash equivalents such as oil, gold and cotton as the best-performing investment since 2000. Overall, 40 percent reported uncertainty around which asset class performed best, and 25 percent believed the stock market was the best investment.

shutterstock_390499828
In reality, real estate outperformed the stock market during that time frame. Millennials got it right: over the 16-year period from 2000 to 2016, the S&P 500 yielded a 5.43 percent annual total return compared to 10.71 percent in real estate. And while the S&P has had a slight advantage more recently, both markets have recovered well since the Great Recession, with the S&P and real estate at 12.65 and 11.37 percent, respectively (range from Dec. 31, 2010 – Dec 30, 2016).

In the RealtyShares survey results, 20 percent of millennials indicated they believe real estate has performed the best since 2000. In fact, millennials were the age group with the largest percentage with that belief. The next highest group to believe real estate outperformed the stock market since 2000 is comprised primarily of Generation X (ages 35–44), 16 percent of whom chose real estate as the top performer.

Why are millennials the generation most likely to value real estate over the stock market? Many millennials graduated from college and entered the job market during the Great Recession. This major economic downturn made it difficult for millennials to find jobs. Simultaneously, they watched the stock market undergo the worst crash since the Great Depression. Although the housing bubble burst contributed to the stocks’ crashing, the stocks may have lingered in people’s minds longer than the housing market did.

Millennials have watched real estate bounce back

 

In 2007 and 2008, the subprime mortgage crisis caused a panic to unfold in real estate. Across the country, many Americans took home loans they couldn’t afford, which artificially increased property prices. The resulting bubble led to a major market adjustment — housing prices fell 18 percent in 2008. CNN Money reported that at the end of 2008, home prices had fallen 27 months in a row.

shutterstock_325197260
It has taken eight years for the real estate market to recover, but in some markets, real estate is red-hot. Housing prices in popular millennial destinations like Portland, Denver and Austin have been steeply rising. And while millennials may have waited a bit longer than prior generations to marry and buy a home, Zillow reports that half of first-time home buyers in the United States are under 36 (compared with the median age of around 33 from 1995–2009), and first-time buyers make up 47 percent of all property sales.

Morgan Stanley believes we are still in the midst of a real estate recovery, but there is still more good news ahead in the coming years. According to a study by the American Modern Insurance Group, 86 percent of millennial renters plan on owning a home someday. This equates to roughly 50 million future homebuyers entering the future housing market.

Millennials see advantages in owning a tangible asset

 

Millennials, ever-vigilant on the internet, are paying heed to online financial experts. One of these experts especially popular among millennials is personal finance blogger Financial Samurai, who recently shared his preference for investing in real estate over the stock market.

shutterstock_325899806
Also, stocks, as an intangible asset, are difficult for many to quantify. However, with real estate you can physically see and occupy the investment. This makes for an intriguing investment choice for the more visually minded/image-oriented millennial generation.

While the large down payment needed to invest in real estate is the biggest reason millennials aren’t buying real estate, thanks to online real estate investing platforms, millennials can now invest in real estate without saving tens of thousands of dollars for a down payment.

Real estate may flourish with millennials leading the charge

 

While older generations may be more interested in downsizing, millennials are having children and growing in their careers. Buying a home is the next logical step. With positive returns potentially on the horizon, millennials are on the right track. The data says real estate has the capacity to be the best investment, and millennials are on board.

ORIGINALLY PUBLISHED HERE

 

********************************************************************

Screen Shot 2017-06-12 at 10.08.36 AM

Screen Shot 2017-06-14 at 9.46.53 AM

Screen Shot 2017-06-14 at 9.21.07 AMScreen Shot 2017-06-14 at 9.21.07 AMScreen Shot 2017-06-14 at 9.21.07 AMScreen Shot 2017-06-14 at 9.46.09 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-04-20 at 11.13.37 AM copyScreen Shot 2017-04-20 at 11.27.56 AMScreen Shot 2017-04-20 at 11.58.34 AMScreen Shot 2017-06-11 at 9.31.13 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-06-12 at 9.54.25 AMRead the latest car news and check out newest photos, articles, and more from the Car and Driver Blog.

2017 is a Landmark Year for E-Notarization (Here are the holdout states)

The prevalence of digital technology, the trend to reduce paperwork, the goal to save time and money and the need to increase security have converged in the growth in e-notarizations. And the momentum is growing. National organizations are increasingly endorsing e-notarizations and remote notarizations, and their uses are spreading.

Screen Shot 2017-06-14 at 9.39.29 AM

The prevalence of digital technology, the trend to reduce paperwork, the goal to save time and money and the need to increase security have converged in the growth in e-notarizations. And the momentum is growing. National organizations are increasingly endorsing e-notarizations and remote notarizations, and their uses are spreading.

All states are authorized to accept some form of e-notarization in conformance with the Uniform Electronic Transactions Act (UETA) which was approved in 1999 by the National Conference of Commissioners on Uniform State Law (NCCUSL) as an overlay statute to help reconcile conflicting state laws. The Electronic Signatures in Global and National Commerce (ESIGN) Act was passed in 2000 by the federal government and grants legal recognition to electronic signatures and records if all parties to a contract choose to use electronic documents and to sign them electronically, and it also supports e-notarization.

E-notarization adoption, particularly remote notarization, is poised to gain even more traction in 2017. Remote notarization takes e-notarization a step further by using modern technology to expand the definition of “in the presence of” the notary, which is a foundational requirement of notarization in all state laws.

Screen Shot 2017-06-15 at 5.56.22 PM
Last summer, Fannie Mae, Freddie Mac and Quicken Loans endorsed remote notarization for their mortgage closings. This was quickly followed by the Uniform Law Commission (ULC) approving an amendment to the Revised Law on Notarial Acts (RULONA), which allows notaries in an enacting state or jurisdiction to perform remote notarizations for signers outside the U.S. for certain documents. The ULC also approved a drafting committee for an amendment that would allow remote notarizations for signers in the U.S.

While “in the presence of” had been traditionally interpreted as meaning “physically in the same place,” some forward-thinking states and organizations have recognized that technology allows people to be virtually in the presence of each other without requiring physical proximity.

shutterstock_325899806A remote notarization includes all the formalities of a traditional paper transaction, except that the notary and the signer are linked together by real-time, audio-video communications. That means signers and notaries have the freedom and convenience to complete transactions from wherever they happen to be, and the capability is revolutionizing many industries.

Plus, the process is actually more secure and legally defensible than wet ink signatures, thanks to authentication methods and audio-video recordings.

Knowledge of this digital process expands and widespread acceptance of e-notarization grows across industries, we can expect to see e-notarization and remote notarization become more prevalent, especially in the mortgage industry.

ORIGINALLY PUBLISHED HERE

********************************************************************

Screen Shot 2017-06-12 at 10.08.36 AM

Screen Shot 2017-06-14 at 9.46.53 AM

Screen Shot 2017-06-14 at 9.21.07 AMScreen Shot 2017-06-14 at 9.21.07 AMScreen Shot 2017-06-14 at 9.21.07 AMScreen Shot 2017-06-14 at 9.46.09 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-04-20 at 11.13.37 AM copyScreen Shot 2017-04-20 at 11.27.56 AMScreen Shot 2017-04-20 at 11.58.34 AMScreen Shot 2017-06-11 at 9.31.13 AMScreen Shot 2017-06-12 at 9.49.30 AMScreen Shot 2017-06-12 at 9.54.25 AMRead the latest car news and check out newest photos, articles, and more from the Car and Driver Blog.