The bursting of the Internet bubble and the 78 percent decline in the Nasdaq from its peak was one that many thought would be tough to repeat. However, the current S&P 1500 Homebuilder Index has declined 85 percent since its peak. Rather than seeing the current situation as a cup half empty, many wise investors are viewing this is an opportunity to invest in a severely discounted market.

But one may ask, where is the absolute bottom? Economists and fear mongers would say there is no end to downward spiral. But educated investors would rely on hard data to make the decision.

The latest NAR (National Realtor Association) published last week has shown that median prices of single family homes are still plunging in national wide, however, if one examines the data closely, it is hard not to noticed that the sales volume has increased since last month. According the Associated Press reports, fully 40% of all homes sold in the previous quarter were bank sales and foreclosed properties. This contributed to at least a 9% decline in the median price of all homes sold during the period.

In some areas, the volume of sales has stabilized and some has even shown slight increase in volume. For instance, in Hampden County, Mass, there were 266 homes sold last month, only two fewer than Oct 2007. According to Seattle Times, the median prices of homes in Southern California fell 41% from the peak price of 2007, but the lower prices did drive sales volume up 56% from a year ago. One of the most notable is Austin, Texas. Single family home sales fell 25% in October compared to 12 months ago. However, in October 2008, median home prices has increased 7% and set a record for the month.

The NAR report also reported sales of single family homes in Fort Lauderdale were up 20% but prices were down 24%. Miami reported a 2% increase in volume but a 24%  decline in price. The West Palm Beach market saw a 9% increase in volume and a 18% in price decline.

Light at the end of the tunnel?

Another notable point is the total months of home supply on hand. In April 2008, the number peaked to as high as 11.2 months of supply.  Since then, the inventory slowly but steadily decline. In September 2008, the reading was 9.9 months of supply.  To many this may be an early indicator that real estate is slowly but steadily gaining small positive ground against the downward spiral.

Can these data be an indicator that seasoned investors with strong financial backing are taking action on the bargain basement prices in popular cities nationwide. Perhaps, one can also see the decrease in prices back to 2002 level as an attractive incentive for first time home buyers with a solid credit history.

The October real estate data is a clear indicator that some investors who sees the current market downturn as cup half full and are ready to seek out quality bargain properties nationwide.