For several years now, the real estate industry has faced hard times.
Whether you measure this as slumping sales of new homes or resale homes, or falling home values, things have looked bleak.
The negative press coverage about real estate, often with banner headlines about the most recent gloomy statistic, has fueled the attitude of pessimism we see.
This has sometimes been a self-fulfilling prophecy: real estate "experts" predict continued falling prices or sales, potential buyers read this and either decide not to make a purchase.
The result: lower sales and lower home values.
The problem with this pervasive pessimism is that it does not tell the whole story.
The real estate market is actually many, many markets, not just one.
There are regional markets such as the Northeast or the Midwest.
Markets within cities such as Los Angeles, Las Vegas, and Seattle.
And local markets within each of the cities.
In any of these markets, conditions vary widely.
Some real estate markets in the U.
S.
have already begun rebounding, or in some cases have experienced newly rising prices.
Factors such as the state of the local economy, net in-migration of people to the market, and the existing supply of homes all play a part in how a given market performs.
You can't look at broad-brush national statistics and draw conclusions about whether it is a good time to buy or not.
You have to research the local market where you are thinking of buying and evaluate market conditions there.
The second thing to keep in mind is that the news media are reporting past results; they have no more insight into what may happen in the future than anyone else.
There have been many times when the stock market is overwhelmed with pessimism and the result is irrational selling of shares.
Then, something sparks a rally and investor confidence returns.
The point is, the stock market does not send every investor an e-mail saying: Hurry! Now's the Time to Buy! Most equity investors do not recognize when the market is turning and so miss out on opportunities.
Similarly, by the time it is commonly recognized that the real estate market has rebounded, the best buying opportunities will already be gone.
It is really impossible to predict when the real estate market will rebound on a national level.
For individuals with a long-term perspective, five years or more, a home will continue to be one of the foundations of a wealth-building strategy.
In an economy as strong as the American economy, where home ownership has for generations been encouraged by Federal government policy, there is no reason to believe that real estate values will not resume their upward climb in the near future.
Will it be in six months? A year? Two years? That's hard to say.
What's important to remember is that this down period in the real estate market will end.
Smart investors know that and aren't forced into unwise real estate investment decisions based on the whim of the media.