Real Estate Stalling? Reversing?

This next year is going to be pivotal in terms of whether or not housing continues its comeback. There is a definitive feel of a slowdown this spring from the double-digit jumps experienced over the last twelve to eighteen months. Many feel a more modest appreciation year over year (low single digit) would be a healthy transition away from a potential bubble. However, with investors having made their substantial plays two years ago, a high non-participation rate in the labor market and stagnant incomes for the vast majority of Americans, it is becoming more difficult to imagine a robust real estate market.

It may be instructive to examine a high-profile sale on the ocean in south Florida, an area that was crushed during the collapse of the real estate bubble and is supposedly on its way back. But the story is more nuanced than that. Yes, a multi-million dollar property was recently sold whereas there was almost no market for it just a few years ago. But it was bought for 10% less than its selling price back in 2004, which wasn’t yet the peak of the bubble.,0,4895638.story

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