Some positive housing statistics have come out recently. The Case-Shiller index, which tracks changes in the values of residences in 20 metropolitan areas in the U.S., is up 2.9% in the second quarter. The previous quarter it was down 7.9%. The consumer confidence index was 54.5 in August, up from 47.4 in July. But does this data mean the market is turning around? Housing experts say in certain areas yes, while in others not so much.  According to the index, Charlotte, Cleveland and Las Vegas were the only areas that had higher declines in housing value month to month from July to August with 0.4%, 0.5% and 0.3% declines respectively. Minneapolis had the greatest monthly increase in values; it's up 3.2%, followed closely by San Francisco at 2.8%.  As many real estate market watchers note, real estate markets need to be analyzed locally as each market functions differently. Paul Brigandi, portfolio manager at Direxion Funds, says locales with a lot of foreclosures will snap back faster than the rest of the market because of the demand for low-priced housing. Foreclosures went up 5% in the third quarter to 937,840 properties, according to RealtyTrac. Nevada, Arizona and California had the top foreclosure rates statewide. One in 23 houses got a foreclosure filing last quarter in Nevada, which is six times the national average, according to RealtyTrac.  Follow Intelligent Investing On Twitter.  Sign Up For The Daily Intelligent Investing Newsletter.  Nationally speaking, Mickey Cargile, managing partner of Cargile Investments, says that the bottom is in place for housing prices and they will start to go up in a year to 18 months.  The commercial real estate market will probably continue to see falling property prices for the next year, as the commercial real estate market usually lags the residential one by a year, says Michael Stubben, senior vice president of Cole Real Estate Investments. The office and industrial commercial real estate properties are tough to price now because of a high number of vacancies, he says, which will take two years to flush out of the system.  Martin Weiss, chairman of the Weiss Group, sees many reasons for a positive long-term outlook. "There are a lot of forces that were driving housing prices lower. Those have been mitigated to a great degree," he says. But that positive outlook could be changed by another recession or a surge in interest rates, he adds.  Vahan Janjigian, Forbes chief investment strategist, is concerned the government is propping up the real estate market. "They've artificially driven down the mortgage rates, and they're offering this big incentive to first time buyers," Janjigian says of the first-time home buyer tax credit of $8,000. Because of this potentially lift from the government, it's hard to tell how the market would have done otherwise and will do in the future, he says.  Sherry Chris, chief executive officer of Better Homes and Gardens real estate, saw a busy housing market in the early fall largely because of the home buyer tax credit. She is working to have the credit extended beyond its Dec. 1 deadline. "I see housing sales falling off in the later part of this year and into 2010 if there is no extension," she says. Approximately 1.4 million people have used that tax credit so far, Chris says.  "There is legitimate demand because prices have come down, there are a lot of people who were taking advantage of the tax credit and the low mortgage rates," says Ken Shubin Stein, founder of Spencer Capital Management. He adds that this demand seems like an "alphabet soup" created almost entirely by the government.  Though the government tax cuts have helped firm up housing prices and demand in the short-term, Janjigian is concerned that long-term the real estate market can't recover until unemployment comes down substantially. The unemployment rate is currently 9.8%.  Apart from buying houses themselves, there are other attractive real estate investments. Brigandi says within the next several years home builder stocks, such as D.R. Holton ( DHI - news - people ) and Hovnanian Enterprises ( HOV - news - people ), will be good buys as more risk appetite and demand comes back to the market. His firm also manages two leveraged exchange-traded funds that investors can use depending on their views of the real estate market. These funds are the Direxion Daily Real Estate Bull 3X (DRN), which is three times leveraged to the MSCI real estate investment trust index, and the Direxion Daily Real Estate Bear 3X (DRV), which is tied to the MSCI real estate index.  Get Intelligent Investing On Your iPhone.  See More Intelligent Investing Features.
Some local markets have seen the bottom, while others still have a ways to go. Minneapolis housing prices are up.