Housing: Boom Or Bust?

(CBS)  Disappointed by the stock market and by mutual funds, Washington architect Joe Wnuk wanted to redesign his retirement accounts. So he decided to move some of his money into real estate. He's looking to buy a second home.

"The increases haven't been as substantially as I would like them to be,'' he says of Wall Street.

In Washington right now, Wnuk says, housing is just too tempting as an investment.

In Washington, the median home price has risen 69 percent in the past three years. Stocks, by comparison, have risen less than 10 percent in the same time.

As CBS News Correspondent Anthony Mason reports, Americans are buying second homes in record numbers. Last year nearly a quarter of all homes sold were bought for investment purposes.

"The second home market is surging," says David LeReah, chief economist with the National Association of Realtors.

He says the boom has been fueled by baby boomers. But in some red-hot markets, he says, speculators are now driving up housing prices.

"So there certainly is some risk," says LeReah. "There are certainly some pockets where they may be more vulnerable to a price bubble bursting than other areas of the country because of the speculative element."

Darryl Wortham says he's not speculating.

"I'm not looking to get a 50 percent return out in Vegas." He says. "I'm looking at 5 percent, 10 percent."

Wortham, a tech project manager in California, has bought three houses this year in Georgia.

"So I bought all the properties really sight unseen," he says.

That's right, he bought them online, through an Internet investment group.

"You see they have all the pictures up here, so it makes it real easy to make the buy," he says. "You come down and see the 'purchase' button.

"That's all you have to do."

Wortham, who sold off many of his stocks, now prefers owning property.

"It's really nice being able to get those keys and get those checks in from the tenants," he says. "Oh, I love it."

Asked if he's concerned about a housing bubble, Wnuk says: "At least there won't be a depression in real estate."

Wnuk believes in the numbers.

"It's a safer investment right now for me," he says.

And for now at least, those numbers only seem to be going up. The number of homes bought for investment purposes has jumped 60 percent in the last four years.

Part 2: Why Some Homes Don't Sell