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Of course the real estate market will rebound soon - the catch is predicting when the market will turn around. The real estate market is responsible for creating more millionaires than any other single source. There are many, many, people who have successfully invested in real estate over the years and they will want back into the market ASAP.

Lets look at the laundry list of reasons why real estate will come back soon. My personal prediction is in the final paragraph!

1. Real estate consumes a huge amount of bucks on each transaction. This minor setback we are enduring causes the money pipeline to back up and the investors must endure a huge gap in their income. What broker sitting out in the land could resist the possibilities of a new 4-5 million being offered his firm for investment into mortgages at a lower percentage rate? This is the classic beginning of the end of the market turn down. Brokers get offered huge chunks of capitol for rates under the current market. This means accounts are going to be opened, credit reports ordered and the system put into gear. This is ongoing as we speak!

2. Investing in real estate is too good and too safe for too many reasons to stay in a downturn. The stock market is jumping around like a jack rabbit chasing a butterfly. Investors hate this level of uncertainty and have already turned back to real estate. Sure there are foreclosures - but mostly on loans that shouldn't have been made in the first place. Not verifying income, job status or anything and extending big bucks on a mortgage is sheer nonsense.

3. Real estate is the underpinning of the American economy. When real estate is running along fine, homes are selling, mortgages are being granted, etc, etc, everything works well in all over sectors of the market. Let the realty market sway a bit and it shakes the entire upper structure. This includes the huge construction employment market, sales of appliances and lots of other related items.

4. The rate of interest rocketed up a bit to start this downturn in the market. We no longer had 5 and 6% money for mortgages and the whole wagon stopped right there. As soon as sales on mortgages stopped the number of sales of homes dropped - the two action items are really the same device because you rarely sell a home without having a mortgage granted. Within 60 days the higher priced money started to disappear and the mortgage interest rate started to fall, one small chunk at a time. At the current time, the same interest rates we enjoyed 1-2 years ago are coming back into the market. Indeed some markets already enjoy low rates.

5. Many new mortgages go to young couples coming out of apartments and getting their first homes. This market had no where to go for 1-2 years (depending on your location in the country) and we now find there is a small pent up demand in this area. The parts of the country where real estate prices are still reasonable (Texas and some southern states) has enjoyed reasonable sales right through this rough patch.

All things considered, this writer thinks the real estate market will correct a bit more this winter as the large eastern banks write down their losses and foreclosures. This coming spring we will see a resurgence in the real estate market. Sales for April, may and June are the key indicators to watch for - if these months trend up we can kiss this down turn goodbye!

Learn more about this author, Fred Tolleson.
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