16 February 2008 - With the media constantly reporting on the nation's housing slump, it can be easy to lose perspective and forget about the long-term benefits of real estate.

Over the past three decades, home values have risen an average of 6 percent annually, according to the National Association of Realtors. Of course, all real estate is local, and markets vary by region. In some markets, people who bought homes within the past year or two have seen the value of their investment go down while others have seen it go up.

But real estate is not a quick-in, quick-out investment nor is it an investment that should be based solely on national data. Real estate market conditions are like the weather forecast - the local conditions are much more meaningful than national data.

According to statistics from the National Association of Realtors, a buyer who purchased a median-priced home five years ago has seen an average home value gain of $54,000 during that time; in Las Vegas, the gain averages $150,000, and in Miami, the same buyer would have averaged a $200,000 gain.

Even so, some homeowners who have seen gains over the long term may perceive losses because of short-term market fluctuations. For example, buyers in Anaheim, Calif., saw an average median price increase of 13 percent between 2004 and 2006. In 2007, prices there had declined 0.6 percent - making them a bit lower than the previous year, but still leaving a healthy gain from four years ago. This is a good example of how short-term fluctuations have less of an impact on owners and investors who buy with a long-term perspective. In fact, in most cases, consumers and homeowners who are in it for the long-term will come out well ahead.

The long-term value of housing as an investment is compounded by the power of leveraging. A sum of $10,000 used for a down payment on a median-price U.S. home at a typical home price appreciation of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating at 10 percent annually will return $23,600.

It's no wonder the Federal Reserve shows consistent year-after-year results of the staggering difference in net worth between homeowners and renters. In a recent study, the average homeowner had $184,400 in net worth versus only $4,000 for the average renter.

History also provides its own type of perspective. In hindsight, times of crisis often turn out to be times of opportunity. With more than 4 million net new jobs added in the U.S. in the past two years, a significant pent-up demand has developed. In Utah, in particular, the job creation rate has been outpacing the nation's job growth rate over the past year.

Combined with the state's record population growth and low unemployment rate, this has created a substantial demand for housing in Utah.

In many areas, this may be the best time in years to buy a home. Smart and serious investors look at the long term. Those investing in a home and keeping it for a typical holding period of six to 10 years will likely see their investment pay off financially. At the same time, they will enjoy all of the non-tangible benefits of homeownership.

So although some homeowners and speculators may be experiencing short-term pain, those with a long-term perspective will more than likely see overall gains.