It’s springtime for real estate….Like many aspects of the financial crisis, the clouds seem to be dissipating.

Last summer I wrote that it was time to buy residential real estate if you were in the market and looking for a bargain. I never expect to call a market bottom, and certainly not for long-cycle assets like houses, but I seem to have come pretty close. The latest S&P/Case-Shiller survey results, released last week, suggest housing prices bottomed out around April 2009, when its 20-city composite index was down 32.6% from its peak reached in June/July 2006. Since then it has gained 3% through January 2010, with some markets much stronger, especially San Francisco and Minneapolis. (Charlotte, N.C., Las Vegas, Seattle and Tampa, Fla., continued to hit new lows, but at a much slower rate of decline.) Now it may be commercial real estate’s turn. ..This may not be a bottom, but it’s a considerable improvement from just three months ago, when rents in 70 of the markets fell. Given the reporting lag, the bottom may well have already been reached. If so, this moment has important implications for investors, the banking and real estate sectors, and the economy as a whole. Last year I warned that commercial real estate was a "dark cloud" hanging over the banking industry, echoing comments that were coming from the Federal Reserve. Like many aspects of the financial crisis, the clouds seem to be dissipating.
By James B. Stewart, April 7, 2010 WSJ

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