Taking the Market's Pulse... "Investors perceive U.S. real estate as a safe haven for investment dollars, even though landlords in many markets are still waiting for fundamentals at the property level to improve." That's a quote from the 2005 Real Estate Investor Outlook sponsored by Marcus & Millichap and the National Real Estate Investor, subtitled Still Bullish.

In other words, even though net incomes have declined or remained static in recent years, real estate prices have increased, sometimes dramatically. Is this rational? Yes, according to Hessam Nadji, S.V.P. National Director Marketing and Research at Marcus & Millichap, who lists several factors explaining this positive attitude.

First, the economic cycle should remain positive as the recovery continues. Second, no overbuilding threatens to flood the market with a new supply of product. And, third, aging baby boomers in the coming years will need investments producing cash flow.

As recent Dispatches have discussed, many firms try to combine the best elements of pure research and local brokers' knowledge to help clients make better buy-sell decisions. Marcus & Millichap's research staff of 25 is based in Phoenix.

But each market report is approved by a local manager and at least one agent. And collaboration with the National Real Estate Investor survey further broadens this perspective by soliciting the opinions of a variety of institutional and private investors. (Remember the Dispatch Yes, Crowds Really Are Smarter, Sep 28?)

So how do you make market judgments? What's your favorite market indicator? Blast away. I'll write more in future Dispatches.

--Peter Pike