If you look at action in stock market in the recent weeks, it may appear that we are out of woods. I think it’s too early to judge that. Real estate market gurus started singing their optimistic songs. If you look at stock price movement of builders like Toll Brothers, you can see there is lot of expectations about real estate market turn-around.

Although I like to believe in the hype and start putting my money in $70,000 house in Cape Coral, FL, I am hanging in there because it is just the hype. New York Times published an article about real estate market in Florida. It may be really tempting to go and buy couple of foreclosed properties in Florida and elsewhere. I am going to hold on to my money until employment situation is getting better. New York Times columnist mentioned in the article “age of the flipper is behind us”. You wish! Flippers make the real estate market looks sexy. Flippers are hiding for now, they will come back.

Yes the real estate market appears to be making a bottom. The numbers that have come out over the last few months point to a real estate market that is extremely weak, but seems to be coming off the bottom ever so slightly. In recent weeks analysts on Wall Street and talking heads on financial television networks have been speaking extremely highly of the real estate market. I think it is a good idea for investors to understand that the real estate market isn’t getting worse anymore, but I also think they should be very careful about diving back into a market that still has a huge amount of supply.

Overall I believe that investors should learn a major lesson from the real estate market bubble that burst in the last few years; your house should be a place for you to live and not counted on as an asset or an investment that will grow by leaps and bounds. Yes your home will probably increase in value over time, but you are better off thinking of that as a bonus than you are counting on this for your future needs. Unlike other assets the market for a home is not always extremely liquid, as we have seen in the last few years.

The demand for houses is likely to improve over the next few months, but do remember that there is a huge amount of supply on the market that has been there for quite some time. In addition, there are many sellers that have decided not to sell their home during the recent downturn who may come out of the woodwork and want to sell their home as housing demand improves.

The bottom line is that the real estate market is showing signs of life, but it is far from being a boom area that investors should jump into right away.