Has the real estate market bottomed out yet?

What is the key indicator the real estate market has bottomed
out? It’s one ratio:

Inventory : Sales

Inventory is the number of houses offered for sale at any given
time. real estate brokers will have an accurate count of the total
inventory of houses on the market at any time. They can also
give comparisons of this month’s inventory to last month, and a
year ago. That gives you the general trend for the inventory
supply.

Sales figures are the actual number of houses sold. Again, real
estate brokers compile this information, and make it available.
They will also be able to provide comparable figures to a month
ago, or a year ago.

The significance of the Inventory:Sales ratio is:

1. Inventories will grow when buyers diminish. That is, when
   news gets out prices are at their peak, many house owners
   will rush into the marketplace, to sell at the highest prices
   possible. Therefore, the top of the cycle is marked by a
   sudden influx of inventory.
2. Within 6-months to a year, fewer sales and increasing
   inventories will drive prices down. It will now become a buyer’s
   market, as people desperate to sell attempt to get out. At this
   stage, the inventory will peak.
3. With a falling market, many house owners will withdraw their
   houses. Inventories will begin to shrink. prices will now
   stabilize gradually, and there will be buyers entering the
   market to take advantage of the opportunities.
4. At the bottom of the market, prices start moving up again and
   sales increase as buyers snap up houses before their prices
   go up again.

The ideal time to apply the Buy - Rent - Hold strategy is while
the market is falling.

Excert from
BUY, RENT & HOLD
How to Make Money in a
‘‘Cold’’ Real Estate Market
BY ROBERT IRWIN

Tami Roberts

P.S. If you would like a copy of the complete book summary, subscribe to my Daily Foreclosure Report for Baldwin County at http://www.gulfshoresvalue.com/