MONEY MAGAZINE'S REAL ESTATE EDITION...HEADLINE -HOUSING IS BACK!

If you are a natural pessimist, or from Missouri, and you want to see it for yourself, you may want to pick up this month's Money magazine.  Inside, they prove their four points: 10 In the last year, home prices increased in 92 of the country's 100 largest metro areas.  2) Homes are more affordable than any time in the last 40 years.  3) The number of houses for sale is the lowest in a decade and possibly a generation.  4) Price increases are projected for most of the country in 2013.

Bank of America and Merrill Lynch's analysts had the following statement, "We believe that the gain in home prices can persist despite subpar economic growth this year...The combination of low interest, high affordability, and improving expectations for home prices, provide powerful momentum for the housing sector."  Finally, the National Association for Business Economics reported in HousingWire, "While Gross Domestic Product (GDM) is expected to be negatively impacted by all the uncertainty surrounding the nation's impending debt ceiling debate and risks of sequestration, the housing market is expected to continue its upward trajectory."

These reports and analysis of the current housing market may explain why so much cash is flooding the real estate market.  Many economist deem it the safest bet for growth in the coming 3-5 years.  This newsletter always touts the benefits of home ownership and real estate investment.  The leveraging of your cash is the best feature.  But return on investment is always a reason to look to the market.  Many who study the real estate market are beginning to see signs of the start of the next upward cycle.  Don't expect it to be a 2002 through 2006 phenomenon.  Hopefully, we will never see that kind of bubble again, fueled by improperly documented and ridiculous loan programs.  But real estate has always been cyclical and this time around is no different.  Many people try to figure out the exact moment it hits its low and the exact moment to sell high.  Applause to you if you get it right, but for the rest of us, the question is, "Do current market conditions benefit a buyer?  Low interest rates, a bottomed out prices, would evoke a positive yes from this author.  Sellers too, can begin to see their equity returning and be motivated to sell now as well, to take advantage of lower prices on their next purchase.  Overall, you'd have to give a thumbs up to at least considering a real estate investment, either a owner occupied home, a second home, or an investment.