Right now everyone has an opinion about the real estate market. Many people are forecasting that real estate will take 5 years to recover fully and they point to the subprime lending crisis as a reason. But recent revelations by Morgan Stanley, Citigroup and other banks that have been carrying a lot of subprime loans on their balance sheets  lead to a more measured conclusion.

Morgan Stanley wrote off about $3.7 billion in subprime loans and Citigroup about $5 billion, leaving many analysts feeling that the worst of the crisis is over. The future of subprime paper consists of finding a fair market value for the loans that are recoverable and separating out the unrecoverable junk. Once the paper has been classified and bundled, the market forces artificially driving real estate down will diminish.

With the falling dollar, US real estate is a golden investment for international capital and money is already flowing into hard assets in the commercial market. With the continuing dollar weakness, oil price inflation and US economic growth leading the Western World, US real estate markets will recover quickly.