Real Estate -- The "Good Old Days" are over, but so are the "Bad Old Days"

The good old days of annual double digit real estate price increases are nothing but a memory.  Also gone are the days of annual double digit price drops.  Our real estate market has approached the point where there is a hint of stability, with much smaller fluctuations in value.  While no predictions can be 100% accurate, all indications are that changes in either direction are more likely than not to continue to be less acute. 

Unlike the stock market, where volatility is becoming the norm, real estate prices tend to head much more deliberately in one direction or the other, or go nowhere.  It seems that we are nearer Nowhere Land in the real estate market right now, and that's fairly comforting to folks who have been waiting for the ride to slow down before jumping on. 

Historically, the general trend has been that, when financing interest rises, the cost of homes drops, and when rates fall, home prices go up.  As a result of economic conditions, we are in a somewhat unnatural area right now.  Seldom is there a time where prices and interest rates are low simultaneously.  This is a tremendous buying environment.

The reason why it's a great time to buy is simple, supply and demand.  There is high inventory and the supply of able buyers has been decimated by a number of factors.  There is a large group of previous home owners whose credit has been affected by loss of their homes.  There is a large group of otherwise creditworthy home owners who owe so much on their current homes that it is prohibitive for them to trade homes.  There is a substantial group of unemployed folks, many would be first time buyers if their income were to return to stability.  All these folks have effectively been eliminated from the competition to take advantage of the great value in today's real estate market.

Anyone who has the financial resources to acquire real estate, either as a consumer or investor, should seize the opportunity.