The current U.S. real estate bear market comes with different perceptions. On one side are those - the majority - claiming the market is depressed and it's "too risky" to invest in real estate today. On the other side are the few taking a bullish approach because of the great bargains, low prices and excellent monthly returns. Competition is minimal because most people wouldn't endeavor to make real estate part of their investment. A good number of owner-occupant buyers, the largest segment of real estate activity has been eliminated. These folks won't turn their credit, income, and savings over night. Banks will continue to "proceed with caution" thus keeping many Americans renting - instead of owning their own homes - while the concept of easy credit standards will soon be history.
To get clarity on the Boom and Bust aspects of real estate it's essential to revisit last decade's events from an economic standpoint. Back during the early 2000′s the real estate boom started as a result of the credit expansion policy of the Federal Reserve. Add to that the government's intervention in the lending sector and the deregulation of Wall Street's paper derivatives and you have the recipe for an "artificial" booming economy. I refer to it as artificial because it had no ingredient of a free market growth.
