Spreading investment risk in housing: A 5-year analysis

            With the stock market trying to make up its mind in March of 2018 whether to correct or keep moving uphill, it’s a time that many investors are weighing a cacophony of opinions and maybe muttering to themselves about how to best allocate assets.

            Along with the boom, or boomlet?, in stocks, housing has also experienced a continued multi-year recovery from the depths of what has been dubbed by many as the “Great Recession.”

            A sampling of investments could help put the current environment in perspective. Start with the local housing market in Bend, then expand to possible indicators on a broader scope over a 5-year period. (Refer to the chart)

            At the end of 2013, the median price of a Bend home was $281,450, as determined by calculating the median of each month's median price sale for 12 months of the year.

            Over the next five years ending with 2017, the price increased each year with the biggest jump of nearly 12% in 2015. Prices then fell off slightly in 2016, and rose

only 5.60% in 2017. Over the 5-year period the median increase was an impressive 40.70%.

            But an investor bullish on housing yet interested in spreading risk could have realized a 91.20% return in five years with the exchange traded fund (ETF) iShares US Home Construction, trading symbol ITB.

            Or an investor could have gone all out with a single housing stock, D. R. Horton, and raked in a 127.14% return. An equally promising return of 117.41% would have been possible with Preferred Apartment Communities Inc., trading as APTS.

            But forget housing and, in the spirit of March Madness, drain a 3-point shot from halfcourt with Amazon, which returned a whopping 275% since the end of 2013.