SilverLinings: New Home Inventories Declining

What's a real estate investor to do?

Applying the "buy low sell high" rule to today's market is a simple task. One must glean the good news from the bad. Sometimes it's easy... as is the case in today's Wall Street Journal (Dec. 28, 2007, C1). The Title? "New Homes Sales Data May Contain a Bit of Hope".

The article contains the negative data: New home sales are down- lowest level in five years/50% below peak.

Positive data: The inventory level of new homes is declining. (Down to 520k from the high of 570K).

Depending on where you sit in the real estate table, each observation could be good or bad news. For those trying to rent their properties, it's nice to have a limited supply... same goes for those wishing to sell.

For those who want to buy low and sell high it may be time to get busy.

Limited supply makes prices go up... or at least hold steady.

It's anyone's guess where the trough is in this market.

But today's data is the glimmer of improvement that sellers are hoping for.