Monday's upbeat news is a result of some market stimulus -- a first time buyer's tax credit and home prices depressed by foreclosures. Experts at a major real estate conference held in San Francisco predict more upbeat news on the home front for next year.
Ken Rosen, Chairman of UC's Fisher Center for Real Estate, is predicting that higher oil and gas prices, along with growing national debt, will spark inflation and that will cause mortgage rates to rise.
"You're going to buy in the next six months because you have this windfall tax credit and a five percent mortgage rate. Take advantage of it because neither of those things will probably be there a year and a half or two years from now," said Rosen.
While the moribund residential real estate market is just beginning to show a little bit of life now, it's the commercial sector that really has the experts worried.
That's because the recession has created high vacancy rates for office buildings and hotels and commercial property values have tumbled.
While this has already happened to the home market, the impact will be even greater in commercial real estate.
"In the commercial market, you're going to have fewer people losing a lot more, so you're going to have companies go into bankruptcy. You're going to have massive dislocations of value," said John Long.
Long, who runs an investment firm, is estimating the losses will be in the hundreds of billions of dollars in California alone.
He points out there is one upside to this commercial downturn -- lower rent for business tenants, which will help their bottom line and maybe even allow some to create jobs again.
Still, the turbulence in commercial real estate is prompting predictions of more bank failures.
"We clearly think there are many to come. In our view, we think many of them will be mid-size or regional banks, many of which made a lot of loans here in California on the West Coast," said Don Herrema from Kennedy Wilson International.
While there is a mixture of good and bad news here, the residential real estate market will be influenced by high unemployment and by would-be buyers worried about holding onto their jobs.