Well, how do you think they got to be so rich?
Millionaires also have an unwavering faith in money-making power of real estate.
Most homeowners worth a cool $2 million or more expect their home value to increase at least somewhat and some of them expect a significant equity boost in the next year.
The 2007 Coldwell Banker Previews International Luxury Survey conducted by Affluent Dynamics questioned 301 U.S. homeowners whose primary residence is valued at over $1 million ($2 million for California where the median price is twice the national median) and who also have investments of more than $1 million.
A majority, 56 percent, expect the value of their home to increase at least somewhat, while 10 percent expect it to increase significantly during the next 12 months.
Over the next five years, 58 percent believe values will increase at least somewhat and 36 percent of respondents believe the value of their home will increase significantly.
That doesn't mean the rich have a corner on the real estate smarts market. The survey's findings are not unlike those from less financially endowed homeowners.
The Coldwell Banker survey comes on the heels of a similar study by Michaels Opinion Research, Inc. conducted for the Boston Consulting Group.
It said 55 percent of Americans say their home would sell for more money now than it would have a year ago. That's down from 59 percent last summer, but still a majority. The Boston Consulting survey also said 74 percent of homeowners were confident they could sell their home within the next six months at a price they think it's worth.
The studies come in the midst of a housing market slowdown where the rate of appreciation has slowed in the vast majority of large metro areas, a growing number of areas are suffering price declines and foreclosures are sweeping the land threatening 2 million or more households, according to recent reports.
Concentrated rates of foreclosures may be putting downward pressure on home prices. Original forecasts of a quick turnaround have been recast as a deeper, longer downturn.
Nevertheless, echoing comments from Boston Consulting, Jim Gillespie, president of CEO of Coldwell Banker said, "These responses tell us that the affluent truly understand the value in owning real estate. It is important to remember that in addition to being a home, real estate is a long-term investment, one that can withstand periodic changes in the market."
That may be true, but only so long as a homeowner can afford to stay put in a recently purchased home financed with a poorly written mortgage that's flipping upside down under the weight of interest rate hikes.
Coldwell said wealthy women apparently are more confident than men about growing equity -- 61 percent said they expect the value of their home to increase somewhat in the next year, compared to only 50 percent of men with money. Ten percent of both sexes said they expect significant home value increases in the next year.
Over five years, 40 percent of female respondents expect significant home value increases, compared to 32 percent of men. Again, the sexes agreed, somewhat (60 percent male, 56 percent female) when forecasting that their homes will increase in value somewhat in five years.
The rich also want more real estate, of course.
Forty percent are considering a second home buy in the next year, with 38 percent considering the purchase as investment, and 22 percent buying for their retirement needs, the study said.
