The Future Of Real Estate In America

Make no mistake: the present real estate crash is the steepest drop, over the fastest timetable, in history. But that distinguishes it only in size, not in character, as real estate markets follow cycles just like every other kind of market.

So, while it may not be much consolation to those of us who have all of our money tied up in real estate presently, and can't pull it out, the fact is that the real estate market will recover. Not today, not next year, and perhaps not even the year after that, but it WILL recover. 

How will this recovery occur? And what will it look like when it does?

The real estate market will recover because of some very fundamental forces: supply and demand. Let's face it, our population is building faster than ever (yes, even faster than the original Baby Boom), due to both immigration and good ol' fashioned procreation.

What this means is that at a certain point, housing crisis or no housing crisis, people have to start buying houses again. And not just the investors, who are carrying the current market as best they can, but newlywed couples, young families, and successful immigrants, the kind of first-time homebuyers who were embraced five years ago and now shunned.

So what we'll see is that certain areas of the country (the ones hurting the least right now) will start easing back into appreciation. It will be market by market, as the declines ease off, and hesitant recovery starts to take place as new homeowners start taking advantage of the massive bargains available on the market.

At first it will only be the A-credit, salaried employees who are able to borrow money to do this, but mark my words, Uncle Sam will stubbornly cling to his dream that "all Americans can become homeowners." Never mind that it's that precise dream that put us where we are now; those lessons will be forgotten quickly enough, as FHA and Fannie Mae & Freddie Mac start offering more and more incentives to borrow money.

But the more buyers the better, in the short term anyway; so when the need for living space starts to outpace the fear of the real estate market, we'll see the first-time homebuyers take the lead in re-infusing the market. It will be a slow, hesitant process, but it will happen, and the economy will breathe a sigh of relief when it does. 

Brian Davis is a real estate investor and landlord out of Baltimore, MD. He writes real estate investing articles for NuWire Investor, EZ Landlord Forms, Ezine Articles, Hub Pages, and many other real estate industry websites.