In the past I've discussed many ways to do technical and fundamental analysis on the real estate market. One of those methods was using REITs (Real Estate Investment Trusts) as indicators for which way the market is moving.
Personally, my strategy is based on the idea that we have hit the bottom for many areas. Obviously there is plenty of room for some properties to go down some, and some to go up - but overall, this is my belief.
The anecdotal reports I've read across the country and analysis is what leads my to this, not a single number or source.
One of the interesting things I have observed is we have formed a new support level with the REIT index, further indicating the bottom has occurred. The index in is a trading range at the moment right now, which means things are limbo more or less - not really going up, not going down.
Three things can happen. It can remain in limbo, drop through support (and go down), break through resistance (and go up).
If the REIT index breaks through 530, I think it is sure sign that the overall sentiment will change to real estate is now a "value" investment by the many people. Already the smart money has moved back into real estate.
The point of this is twofold...
- Keep an eye on all indicators. No single indicator means nothing on its own. Just unemployment or foreclosure rates or any other indicator means nothing on its own. REIT can be a good indicator because it represents the sentiment of others which will push the market to a degree itself.
- The window to get the absolute bargin basement prices appears to be closing a little each day. If you are standing still or wasting time, get moving. If you need to expedite your learning or someone to keep you on track and help you, think about joining the Success Academy.