Yes, the market is depressed right now. All the negative news stories (housing prices are down, foreclosures are dragging down home values, etc.) can really affect a person’s opinion about the industry. I tell people I’m in real estate and they cringe, or I’ll get the “how’s that going for you” comment.
From an investing standpoint, the depressed state of the market isn’t that much of a concern. In fact, a distressed market like the one we’re in can actually benefit real estate investors. Discounted homes are everywhere, and the market is flooded with people facing foreclosure, creating motivated sellers. It is a buyer’s market, so now is the time to buy.
It is still important to take notice of where the market is headed, by studying indicators such as future job growth, government stability, and population growth. But that doesn’t mean you need to time the market, or wait for it to turn around. A good deal is a good deal, no matter what market you are in.