Mar. 30, 2009 - The Housing Investment Rush of 2009/10?

The media is blaring terrifying headlines about how bad the real estate market is, and there are plenty of pundits ready to declare the death of real estate as an investment.  But are there early signs of recovery in those foreclosed field of dreams?

The real estate market is restless.  Foreclosures are at record highs, prices have had the biggest drop since the Great Depression, and nobody expected much of an improvement in the overall market until well into next year.  Yet sales of previously owned homes in the U.S. have unexpectedly begun to rise.

Prices for houses have dropped so significantly that they have begun to find a market, with distressed properties playing a major role. Indications are small local investors recognizing opportunity are buying properties, installing renters, setting the stage for a housing recovery.  Ironically, the renters are sometimes former homeowners, as banks now are allowing owners to stay in the homes after foreclosure.

Despite house price falls, investors are still committed to property as an asset class.  A new survey conducted by Knight-Frank found that a significant number of high net worth investors plan to increase their residential real estate investments over the next one to two years.  Liam Bailey at Knight Frank said, “In turbulent times the wealthy want their investments to be both tangible and transparent,” recognize opportunity as conditions change in the real estate market.

The great real estate crash may have driven some people away forever, but for some, real estate continues to be as good as gold.