Real Estate rout may be short lived

According to a recent article by Barron’s, the real estate slump may be over sooner then we think.  Despite the record number of foreclosures and homes on the market, and widely ignored in the media, was the news that home prices actually rose, (slightly) between March and April, in eight of the 20 markets covered by the S&P/Case-Shiller Index (Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Portland, Ore., and Seattle). Prices of Las Vegas homes and Henderson NV real estate in several areas of both cities have also gone up slightly.

I think part of the reason for the stabilization is a flood of overseas investors and second home buyers. The weak dollar combined with the fire sale of US real estate has drawn foreign investors in large numbers. Homes that were selling for over half a million dollars are now selling for just over $300,000. Builders are giving away upgrades and providing super low interest fixed rate loans just to move their inventory.

The other part of the equation are areas that didn’t experience a boom. Those markets remained fairly stable, experiencing neither an up or downward trend in inventory and pricing. There have been some experts recommending buying now. Time magazine ran an article in February urging buyers not to wait. MSN real estate ran a similar piece recently, stating five reasons to buy now.

With interest rates at  historic low and an oversupply of homes on the market, there hasn’t been a better time in recent history to purchase a home.