When to buy real estate again

If you were wondering what indicators to look at in order to judge when buying real estate might make sense again (i.e., when future price declines are less likely), just keep an eye on these two charts and, in particular, the first chart.
The trend for existing home sales and inventory has lagged that of new home sales and inventory, but it now appears to be catching up.

When inventory gets back below five or six months and stays there for a year or more - that will probably be a good sign that prices have stabilized.

Note that it is not the level of inventory, but rather, re-entering this range that is critical - at least that was the case in the 1980s and 1990s.

A bottom in 2011 seems more likely with each passing month and with each new realization of the very long-term nature of real estate market cycles.