6 signs of a housing recovery
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More new construction
The level of activity among local builders -- both commercial and residential -- can also be telling.

If builders announce plans to renovate a strip mall or begin construction on a town house complex on the other side of town, economic indicators are telling them demand is picking up.

If you're game for a little reconnaissance, you might consider checking in with residential builders in the area.

If they're slashing prices or throwing in pricey upgrades to unload their inventory, they're still experiencing weakened demand. If they point you to a relief map filled with neighborhoods under development, your market may be on the mend.

Look, too, at your neighbors.

If they're still investing in upgrades and renovations, you know they're banking on the long-term viability of local real estate.

Positive changes in your neighborhood
Finally, as the old saw states, "all real estate is local." Drew suggests taking mental note of trends on your block.

"Look for changes in your neighborhood that could impact property values," says Drew.

For example, a proliferation of distressed properties -- which may be boarded up or in a state of obvious disrepair -- is sure to turn off prospective families in the market for a new home.

By contrast, a housing market in the midst of recovery has a noticeable absence of such homes. It will feature manicured lawns and fresh coats of paint.

For more clues, continue to do your homework. Talk to real estate agents, complete a drive-by inspection of homes in your area and read the news to determine which economic influences may affect local job growth, and ultimately demand for homes.

"Read with understanding," Grimes says. "When you read an article about the nation's housing numbers or even your state's, remember that you could be in a niche market. There could be external environmental factors that would increase sales, like a new factory going up, which would increase (property) absorption."