The US real estate market may be recovering, but home prices are still at or near the bottom. Since the 2006 market peaked, US national homes prices have fallen 32 percent, according to the Standard & Poor’s Case-Shiller home price index annual report. The index also shows that home prices have rebounded, with gains of more than six percent reported at the end of 2009. Buyers may find that these low prices may not last much longer.

National Association of Realtors (NAR) reports shows sales volume has been improving through 2009 in even the hardest-hit areas such as Southern California, Las Vegas, Phoenix and Florida. Although prices have not dramatically improved, there is clearly an increase in sales activity. The seasonally adjusted number of existing home sales was up 44.1 percent compared to last year (Source: National Association of Realtors (NAR) November 2009 report).  The trend of increased sales began in 2008, and gains posted in nine of the last 12 months.

While home price drops of more than 60 percent are common in the US’s hardest-hit areas, prime These prime locations have also seen an explosion of sales volume according to the NAR report. Year-on-year, volume increases in New York were 44 percent, 58.2 percent in Boston and, 31.8 percent in Washington, DC. Cites like New York, Boston and Washington, DC. never experienced the deep discounts seen in hard hit areas with discounts ranging from 20 to 25 percent.

Some of the US housing rebound can be attributed to artificial stimuli including the federal tax credit, aggressive Federal Housing Administration lending policies and the low interest rates. This stimulus is due to continue in 2010, as the Obama administration has obtained an extension to the tax credit and the Federal Reserve vowing to keep rates low throughout the year.

International buyers are amplifying the rebound in the US market. In a recent survey released by Barclays Wealth, the US is the number one country of interest for foreign purchasers. Canadians are now the biggest foreign buyer in the US. The percentage of Canadian buyers doubled from 2008, from 11 percent to 23.5 percent in 2009 according the NAR reports.

• Canadians are now the biggest foreign buyer in the US

Both job growth and new-home indices show indications of the fundamental strength of the housing market. Has the US market has hit the absolute bottom? The trend shows that the residential market is poised for a recovery in 2010.