You’ve seen the headlines. The combination of lower prices, increased rents and a weak dollar are drawing investor capital from all around the globe and funneling it into American housing.  According to NAR, foreign investment is US real estate has increased by 20% in the 12 months ending march 2011, totaling $82 billion in just one year. What’s missing in most of these stories is why.

Why are overseas real estate investors, who are standing thousands of miles away with little if any personal experience in US real estate, pouncing on this opportunity? Low prices and great exchange rates don’t explain it. If you hear of a stock that has plummeted, would you buy it based on that fact alone? Or would you want to understand the fundamentals of the company behind the stock. What do they produce? Who are their customers? Why should you believe this investment will pay off, as opposed to seeing the new low price as an accurate reflection of the value of the company? In other words, if it’s a piece of junk, you wouldn’t care how cheap it is.

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The question most real estate investors often ask is, “Where do I invest now?”

As always, there are local housing markets around the country where homes are affordable, the underlying economy is strong, and appreciation is imminent.  These are markets you should consider for your next long-term real estate investment.

Norada Real Estate Investments tracks the economic conditions and real estate trends of nearly 400 markets across the country.  Because of the dynamic nature of real estate market conditions, we continually monitor and rank the top markets to make it easier for you, as an investor, to concentrate on the areas that will give you the greatest opportunity for success.

While you might be inclined to look for bargains in areas that have seen the largest price corrections in the past, watch out – there is no guarantee that home prices in areas of high speculation will ever rebound to boom levels.

Unlike the stock market, local real estate markets usually move in slow, predictable cycles. Appreciation is not luck or magic. It correlates closely with economic development and population growth in a local market.

If you missed out on Phoenix, Vegas and Florida (or if you rode those waves and know what it's about), download the current issue of our free report.

Download your free copy of the 2012 Housing Market Forecast Today!