The real estate market appear to be slowing down. Most forecasts call fro existing sales to be 5-10 percent below last year. There are"?many reasons for this. The press has made a fetish of identifying a soon-to-burst housing bubble. Sellers have gotten greedy and want last year's price for their home. Interest rates are up and will price some buyers out of the market. But perhaps the most important reason is that we are ten years into the most expansive real estate market in American history. Even if the most dire forecasts for sales come true, 2006 will be better than an y year of the Twentieth Century.

There is no real estate market; there are thousands of real estate markets. Even though the national numbers will show a decline, there will still be markets where activity is brisk. The question for most practitioners is: What will my market be doing this year and next? You can answer this question by paying attention to two factors, both of which are highly correlated with real estate activity. First, how many people are moving into your market? The more, the better. Take the case of Florida, the virtual poster child for the housing bubble. Yes, price have risen substantially in most Florida markets, but 1200 people a day are moving into the state. That will sustain market activity and prop up prices, even as appreciation slows.

The second factor is jobs. Look at how many jobs are being created in your market area. Again, the more, the better. Also look at the percentage of those jobs that occur in education, medicine, government, distribution and high-tech. These are stable, high wage jobs that will boost the local economy and real estate market more than service sector or even manufacturing jobs. Here we can cite the example of Columbus, Ohio, which has a high proportion of jobs in those industries. The history of its housing market has been one of steady growth.

If you track inmigration and jobs, you'll get a good handle on where your market is going.