As the global economic woes continue, there are encouraging signs that the real estate market in California is on the rebound. The closed sales for January 2009 were up 84.9% from January 2008. Even more telling was the number of sales in January: 624,940. This is the most since October 2005. Approximately 85% of the sales are occurring under $500,000.  Statistics are now showing that prices in 2009 are comparable to 2001. Currently, there is a 6.7-month supply of inventory. This reflects that if no new listings came on the market, it would take 6.7 months to sell the current inventory; normal is considered around 6 months. 

Another encouraging sign is that conforming interest rates have dropped below 5% for some loan programs, which puts them at a 40-year low. So, who will benefit most from this opportunity?  Sellers with enough equity for a down payment on a move-up property. They may have to sell for less than they want, but the attractive values on the move-up will more than make up for the loss on the selling side. Also, buyers who were priced out of the market a few years ago have a renewed opportunity to enter the market with prices 35-40% lower.  There is also a great opportunity for investors to come back into the real estate market. With the stock market down over 50% from its high in late 2007, and CD's below 3%, real estate is again looking like a very good investment. What may be a difficult market for some is creating opportunities for others.