With home prices dropping more than 50% in many metropolitan areas, a new report put out by realtor.com shows that home prices may be showing some stability along with an increase in consumer interest.

Los Angeles is one the areas that have been hardest hit by the wave of foreclosures. Great climate, a variety of thriving industries including: entertainment, tourism and high tech , will supply the economic support that will allow this area to thrive in the months to come.

The large amount of foreclosed homes on the market have driven prices down to an affordable level. The typical home in the suburbs costs $280,000 with a mortgage of about $1400 and about $1750 when your factor in taxes and insurance. Rent for a similar home can range from $1800-$2100 making purchasing a home the better option in today's economy.

The real challenge is in obtaining financing. Lender guidelines have become more stringent and the amount of documents required has increased dramatically in the last two years.

This is also a great opportunity for investors. Most great investments are made at the beginning of an up cycle and with the economy showing signs of improvement it will not be long before real estate appreciation returns.

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