In my local market, I see the problem as an oversupply of inventory. A great one. I feel that if there are less new homes being built then this will reduce the oversupply and balance things out some. However I don't think it is the entire soloution.

About the housing Market and Specificly REITS..

with all this Negative Stuff about The H. Mkt. in how it is down, remindsme of This Every Fall and Winter it goes thru this...

Why? Very Few Buys homes in the Fall or Winter!
Thus It is ALWAYS going to drop...and Inventories are going to climb... But wait until Spring and Summer...

And Also Blame the " Flippers", those Hustlers who buy a house, fix it up and try to sell it at a profit ..all to avoid Getting a real Job..

Ans Blame The Mortgage Hustlers who Finance Homes at 110% of the Mortgage to Overcharge The Poor that extra 10% to get their Fees and stick the Buyers with a Mortgage so High, it gets Repo'd with-in a year.. ( ie: Targeting latino's )

But the "housing Market" Doesn't represent ALL of the Real Estate market, Their are 5 other Catagories of Real Estate from Shopping Malls to Commerical Buildings, etc.and that, my freind is were the real R.E. Money is at..

And Alias? Why is the RIET INDEX doing so Well, inspite of all this? = + 25% YTD

And even if the Reit index Drops all the way down to what the S&P Does, it's still should become part of one's Portfolio.. Notice It Didn't loose Any money during 2001 & 2002 Bear market Yrs....

And even better yet With CGMRX...

Another Point:

I bought a Home in 1985 and had $20k, but I only put $10k down and Invested the other $10 into A Reit M. Fnd and after 20 yrs that House sold for $175k net profit, but guess what that Reit M. Fnd. Value was by yr. 2005? $275k....!

I was going to buy a 2nd home with taht $10k and Rent it, but I'm glad my father Convienced me to Put it into this Reit Fund instead and also had alot less headaches vs Renting it.

Nagative on Riets? Not me thank you..

After 30 yrs in the land development and building business, I've learned one thing: the market always bounces back. We survived the "spiritual maliase" of the Carter years when commercial rates topped out at 22% (home mortgages at 13%) and we'll survive this current slowdown. As always, in perilous times, there are those who will crash and burn; and those who will look for the pony in the manure pile. Right now, at least in our area, it's a good time to buy.

It's the BEST news yet...HOUSE STARTS ARE SLOWING. This will work down the over supply (inventory), and with supply and demand the way it is, demand will slowly raise prices as supply slows.... It's happened many times before, and it's no different now.

So all those waiting...there is no better time than now to BUY !

LOL LOL LOL all the way to bank! Got divorced and sold my house in 7-2005! Paid off the ex and put 180k in the bank... I will buy my 600k house back in 2008 for 250k, anybody that thinks I am wrong...GO BUY... Only condition will be if unemployment is over 30%!!! Could be the end of the world as we know it. Get informed people, our rediculously low mortgage rates and invester fed 150% upward housing prices happened all over the world! The ATM's are EMPTY and things are going to get really bad... really bad....

where do i buy a riet fund???? i have 10000 to put somewhere but don't know where to begin as a new investor. can you help??? i never in my life had money. always lived day to day. now iafter 49 yrs. of just saving a little here an there i have 10000. i want to be able to leave something to my kids when i'm gone. where do i begin????

Are any of you Realtors? You sound like someone that gives out advice hoping others will buy into it.
Buy a home and join the rental market. Let others pay the mortage.

A slow down in the housing market is probably a good thing, and overdue in some respects! It should cause the Feds to quit raising interest rates for the time being. And slow down the rate of inflation.
What will hurt the economy more is the fact that democrats are hinting very strongly that they will raise taxes. With less money to spend look for the retail market to take a hit.

Keeping buying those foreign cars. You'll not only get your recession if the big three fail another great depression could befall America. I know people in Calafornia will laugh at this, just wanted to say I told you so if it ever happens.

Regarding the comment:

And Also Blame the " Flippers", those Hustlers who buy a house, fix it up and try to sell it at a profit ..all to avoid Getting a real Job..

Granted, some flippers are greedy but some provide affordable houses. They revitalize communities. They take capitol risk and they make a fair profit. These people have real jobs.

The *construction* of new homes does not determine the entire "housing market" nor the whole picture. Developers responded to the upswing of homeowners who decided to sell while the market was hot. As usual, many were behind the curve and didn't act fast enough. Anyone knowing a little about economics will observe the supply and demand expansion and contraction of homes on the market. Adding to this effect is, of course, interest rates (which by the way are still low). The bottom line in all this is that the market hasn't slowed. There are still hundreds of thousands of transactions going on. The greatest problem is that many greedy homeowners want to get more than what their homes are worth. And we thought people learned about overpaying when the tech bubble burst!

I had "flippers" in my neighborhood. They ruined it. Buying for 325k and trying to sell the next day for 450k. Does that make any sense to you? Now there are 5 houses just sitting and very overpriced. It makes it look like everyone is bailing out of the neighborhood. Now my next door neighbor who really needs to sell his home, Can't even get anyone to come by. Everyone thinks there is something wrong on that street. Flippers are bad news.

I think we might be running out of people to purchase. With all of the "Cardboard Mansions" being constructed, it's about time things slow down. Most of these people are leveraged up to their eyeballs and with foreclosures already rising we could be in for a major catasrophe if the economy slows down (with it is bound to do).

People have to much of the "gimmies" they want that 4/5 bedroom, poorly constructed 3 to 5K. And they are poorly constructed I've watched several developments go up this past year.

Our wants exceed our needs and we will pay the price for excess

The momentum of negative media hype is the tail wagging the resale hosusing market while new home construction company stocks are soaring. Does this make sense?

Hang in there everyone. If you want to retire younger than 65 (67 for some of us youngsters), then forget about mutual funds, 401ks and the like. Leverage yourself in real estate as much as possible. Although it's also not a "get rich quick" way to go, it's still quicker than relying on your principal to grow in a mutual fund or 401k. Do the math yourself, take $100,000 and put it into a $350,000 single family home, rent it out, assume only 4% appreciation for 5 years. (While someone pays your mortgage say, 85% of the time (Although I've actually had 100% occupancy for two and 1/2 years so far). Take that same $100,000, put it into a mutual fund that gets 8%. (So I'm being conservative and am assuming that the stock market will do double what your real estate investment does over the same period). Go ahead, run the numbers. YOU JUST CAN'T GET AROUND THE FACT THAT YOUR REAL ESTATE INVESTMENT IS APPRECIATING ON THE ORIGINAL MARKET VALUE OF THE HOME (I.E. $350,000), NOT THE ORIGINAL PRINCIPAL AMOUNT YOU PUT DOWN (I.E. $100,000). Don't forget about the tax benefits you get every year by deducting the expenses of the rental property, as well as the straight line depreciation. Last year, my effective Federal income tax rate was 4.5% because I owned two investment properties! (Now I own three, bought another this year). If you ride things out and let someone else pay your mortgage for a few years, you'll be in the cat-bird seat, no doubt. Yeah, being a landlord has its moments, but if you treat people fairly and with dignity, you almost always get what you want out of them. My advice to anyone considering buying investment properties, is just do it. Once you get your feet wet, you'll kick yourself that you didn't do it sooner. I've been doing it since I was 42, I'm now 44 and own three, single family investment properties. I am in a very uneventful, but pretty predictable market (Atlanta, no bubble, never had any double-digit appreciation, just a modest 4% to 7%, depending on the county). Had I started doing it in my 30s when I first started thinking about it, I'd be retired by now! Just some food for thought if some of you out there are on the fence. Remember, I buy and hold, I don't buy and flip! If you do take the plunge, make sure you have a great lease agreement, think about forming an LLC for your properties or in the alternative, get yourself some umbrella insurance. There are insurance companies out there that do personal lines (umbrella) up to $5,000,000. Good Luck! -Matt

Dennis sounds like he is living in denial!
we had undeserved appreciation at historical levels from 2002-2005! all the investors that drove the market are gone, the smart money go out 10 months ago! if you think this decline is normal for the season, you are mistaken! we appreciated at historical levels and now is a major correction and adjustment...not to mention more than 50% of loans funded in 2004 to present are non conventional, nasty loans that are adjusting or will be adjusting shortly. people will have to walk away from there homes because they cannot afford the 30% increase in payment, cannot afford to heat and cool it and cannot afford to sell it beacause they owe more than their house is worth...it seems that keeping up with the jones's will be the demise of the real estate market! 20 years from now your kid won't give a hoot if you had a 3,000 sqft home with granite counters. they want to be with mom and dad! they don't have memories of your equity! LOL

Coming from California to Texas last year, we really see the difference in markets. We sold our house that we had out there after 2 1/2 years and made 145k on it. Moved to Big D and paid cash for a bigger, brand new home. We left just at the right time apparently. Things slowed down a lot right after we left.

How many white collar lay-offs can be in the news..how many union concessions..? Before there is simply less and less incomes that can afford to buy a house?
The chimp's war on the middle class is the only war he is winning, and the effect on housing demand is inevitable

The housing market may be slowing down as far as building new single family homes. On the other hand, for those that are real estate investors, this is the time to buy. People are always going to need a place to stay regardless of companies not building as much. As long as you own a home, someone is going to rent from you.

As to the housing markets...here in the real mid-west while the costs went up, they didn't get to the extremes of either coast...thank heavens. However this year I did buy 3 new units, one single family home (it's rented) and a duplex for what I sold one half of a duplex I owned in CA. All the units are rented and I am making a tidy profit. But, then again I am not planning to sell any of them soon. I may sell the duplex in about ten years...depending on what the value is then. I will be retired. The other unit I will keep for probably another twenty years... I would like to down size my home, but will wait until I see what is happening in the housing market in the spring...if it is still a bit flat, I might wait a year. Meanwhile I will be doing updates to my twenty two year old home. And yes, it is paid for also. Gee it's nice not to have a mortgage.