Real estate could heat up and their may not be a lot of warning. We moved to Las Vegas in May of 2003 based on what I saw happening in the jobs market and the numbers of people moving there. No one could predict what would happen over the next 9 months. So what prompted that market craze?

Two things drove the market place in Vegas in that 9-12 month craze.

First there was a shortage of available secondary market homes. The first thing we noticed upon arrival was that there were few homes in the secondary market that met our needs. The homes that did meet our needs sold quickly and for better than asking price. Even in the new build market there were very few available homes. Many builders were sold out and others had a lengthy wait. Very few spec homes were available. This created a frenzy of buying which led to my second point.

2. Second: Irrational buying. The Vegas market was ripe with greed. I remember watching the nightly news that winter and seeing an interview with a lady who had bought 10 homes by a particular builder. No, she was not wealthy, she was greedy. By this time the market was near the top and all of the homes she bought are not worth less than she paid and you guessed it they have all been foreclosed on. Her thought was that she would buy them now and sell them later and make millions.

So why should we believe that the Real Estate market may turn upward again sooner than later? For all the greed, foolish decisions and bad advice listened too that has resulted in the current state of the market, the law of supply and demand is still in effect. Keep an eye on markets where new jobs are being added and people are moving in faster than they are moving out. Surprisingly that describes Vegas among many other market places. Don't be surprised if supplies fill up and we see a return to a more healthy real estate market.

Just be ready, just in case.

PS Austin Texas is one of those market places too.