This week the BBC reported that Ireland is in secret negotiations with EU officials to bail out and restructure their country's mounting debt load. Fears of an European melt down begin to surface and news pundants fly internationally. These rumors drive down US stocks and fog the forecast for economic recovery. Given that the US economy is effected by global events how can you realistically forecast? Since the invention of the Internet and the speed by which information can become viral the standards that were once seemed insignificant are now very significant. All these market over-reactions are the result of nervous investors and a continuing financial recovery from the 2007 banking melt-down. The US will be sailing through very choppy waters (economically speaking). Given that real estate is a bell-weather for the US economy and a key leading indicator, look for the current flat to minimum appreciation market to remain for the next 2 to 3 years.
Buy real estate for the shelter it provides and only if there is value. Incredible deals can be found in real estate these days at fractions of the costs 3 years ago. Below is an good example of a property here in Santa Cruz offered at only $477,500: