The Wall Street Journal is reporting there are growing signs of a slowdown in the U.S. real-estate market. While the current weakness could provide investors with an opportunity to place new wagers at lower prices, analysts warn that the environment has become more challenging.
The real estate market stormed back over the past five years after enduring its most brutal period since the Great Depression. The rebound has rewarded investors and boosted the overall economy.
The Dow Jones U.S. Real Estate Index, whose components include real-estate investment trusts as well as mortgage, realty and forestry companies, has climbed 92% since early 2009. That gain, amid a rise of about 20% in the median price of new and existing homes over the past two years, is a bit less than the 114% rise for the S&P 500 index. But it’s an impressive recovery for a sector devastated by a historic slump starting in mid-2007.
Now however, there are growing signs of a slowdown. If the Federal Reserve begins raising interest rates next year, as expected, it could become harder to make money from real-estate investments, the analysts say.