Forget real estate sales. There’s a bigger indication that the market may be turning around: Real estate investment.

Home prices may be down, but the average real estate fund is 2 percent higher this year compared to 2007, according to the Chicago Tribune.

That’s a decent amount, given New York-based financial analyst Lipper Inc. also says that the average U.S. diversified stock fund is down 8 percent this year.

The rise in real estate-related stocks is good news–and offers hope as the housing slump rages on.

• Shares of self-storage and apartment management companies have risen as investors are again beginning to see real estate as a great investment.

• Although real estate funds decreased 14 percent in the past 12 months because of concern about value declines and the credit crisis, the Trib says, their annualized returns aren’t terrible: The funds’ three-year annualized return is 6 percent. The five-year annualized return is 14 percent.

And another bit of good news: Real estate investment fever isn’t just happening in the U.S. According to the Financial Times, nearly $20 billion in real estate funds are scheduled to be launched this week for development in Asia and Europe.

Property fund management firm MGPA raised enough for a $3.9 billion fund to invest in Asia and a $1.3 billion fund to invest in property in Europe, which will be spent on renovating buildings and buying devalued assets. The European fund currently has a site planned for development in Greece and previously bought residential assets in Poland, according to Reuters.

London-headquartered property fund manager Europa Capital also raised money for two funds to invest in European property.

Getting equity isn’t hard to do overseas (at least, not yet), which–when you also consider that the funds are focusing on buying distressed or devalued residential and commercial properties, many in developing markets–could be a sign that investors feel real estate’s long-term opportunities are very positive, the Times said.

And that’s a good sign–in the U.S., Europe and everywhere else the funds are investing in.

We all know the housing market’s turnaround won’t be instantaneous–and it won’t be easy. The general point when that correction will begin has been under debate for a year–late fall? Early 2009? Or beyond? No one is sure.

And as more downbeat housing news floods in–such as RealtyTrac announcing foreclosure filings were up in May late last week–we’re more unsure by the minute.

Forget declaring each slightly positive nugget in the latest housing reports as a sign: The best indication that faith in the housing market is getting stronger is the market’s reaction to the industry.

If investors are banking on property regaining strength in the next year–and, based on the recent investments we just discussed, it seems they are–things may not be as bad as they seem.

Or–at least–they may not be bad for long.

On Wednesday, a Brooklyn construction site owner was charged with manslaughter in connection with the death of a worker who was crushed by a wall, Newsday said.

William Lattarulo had hired a general contractor and an engineer to create
plans to dig the foundation for the laundromat he was building–but he never used them, opting instead to cut
about $90,000 off the budget by paying undocumented laborers, according to Kings County
District Attorney Charles J. Hynes.

Hynes also said that
Lattarulo didn’t heed warnings from workers that the foundation of
a residential building next door required additional support, Newsday said.

As a result, a worker died on March 12 underneath the rubble of a collapsed wall, and another worker was hurt.

The charge, according to authorities, should be a warning to contractors who are doing poor construction work in New York.

"Owners and developers, contractors, engineers and architects
are on notice," acting Buildings Commissioner Robert LiMandri
said. "Criminal prosecution is possible and it will happen when it
needs to."

New York has seen 16 construction-related deaths this year. In March, a falling crane killed seven people in the city; in late May, a crane crashed onto a building, killing two construction workers.

The May crane accident received extensive media coverage and has prompted the city to re-examine its crane inspection system and overall construction site safety.

Last week, the New York City Building Department’s acting chief inspector of cranes was arrested and charged with taking bribes from crane operators and companies, according to Manhattan District Attorney Robert Morgenthau.

James Delayo also was
charged with doctoring business records,
offering false instruments for filing and tampering with public
records, Bloomberg said.

Although the charges weren’t directly related to the recent crane accidents, the timing is key: New York is cracking down. And it doesn’t want another fatal construction site accident to happen.

But will that be possible?

The New York Times published an editorial calling for increased construction site safety on Wednesday, suggesting more building inspectors and stricter penalties for unsafe work sites.

Is that enough?

What will it take to make New York construction sites significantly safer–before the accidents occur?

And should property owners, contractors and other in-charge construction project officials be held responsible for accidents? Do you think it’s fair that William Lattarulo was charged with manslaughter because a worker died on his site?

Post your thoughts and suggestions below …

On Monday, the National Association of Realtors released its Pending Home Sales Index results for April–which, somewhat surprisingly, showed the amount of signed contracts rose 6.3 percent from March.

The index increased from a reading of 83.0 in March to 88.2 in April, according to the NAR.

The results were varied across the U.S.

• In the West, the index increased 8.3 percent in April and is actually 4 percent higher than a year ago.

• The index shot up 13 percent in the Midwest, although it is still 13.1 percent below the April 2007 level.

• In the South, the index rose 4.6 percent to 88.8–22.5 percent
  below last year’s level.

• And the index declined 1.9 percent to 79.3  in
  the Northeast in April, which is 12.2 percent below a year ago.

Yet, despite the index rising, the group predicted that housing starts–multifamily units
included–will decline 27.2 percent this year to 987,000, followed by a
0.6 percent drop in 2009.

Median home prices are expected to decline, too.

• The NAR estimates the median new home price will be 3.1 percent less this year, around $239,500. "Rising construction costs will provide less room for price cuts on
  new homes," said chief NAR economist Lawrence Yun.

• However, the group says prices should increase 5.4 percent in 2009 to
  $252,400.

The NAR blamed buyers’ difficulty obtaining mortgages for the recent housing market woes but said the lending situation was improving.

However, that doesn’t mean sales necessarily will rise as a result–because, according to Yun, low consumer confidence could hurt the market.

Yet he said the overall economy could improve and predicted U.S. gross domestic product growth would be 1.7 percent this year and 2 percent next year.

Growth? Why, then, would consumer confidence weigh so heavily on housing?

The answer can be found in Yun’s unemployment predictions–which suggest the unemployment rate could average 5.3 percent in 2008 and 5.6 percent in 2009.

Those numbers are in line with Friday’s depressing jobs report from the Labor Department, which said:

• The unemployment rate skyrocketed to 5.5 percent in May from 5 percent–its fifth consecutive month of decline.

• The May unemployment increase was, according to the New York Times, the most severe monthly rise in 22 years–and it cost the economy 49,000 jobs.

With less jobs and rising food and gas costs, Americans are stretched thin, wary of their financial future–and unlikely to go house shopping.

That’s especially true in rural areas, which benefited from rising home prices several years ago as consumers looked to outward-lying suburbs and towns that let them commute to urban jobs without paying urban home prices.

It was, according to a recent Bloomberg article, a "drive until you qualify" way of thinking–and it helped emerging suburbs and exburb commuter towns grow 15 percent in popularity from 2000 to 2006, almost three times as fast as the U.S. population.

But gas prices have risen consistently this year–last week, they hit a new national high of $4 a gallon. And it’s killing commuter towns.

Home prices in areas lacking public transportation where most citizens have long commutes are falling faster than in neighborhoods that are closer to cities, a recent study showed.

Cities don’t necessarily have it easy. Many, like Miami–where home sales are still in a "free fall," according to USA Today–are struggling too.

But if consumer confidence is our biggest hurdle to overcoming the housing slump, we’re in luck. Because that means we don’t have to wait for lenders, prices, inventory reduction or any other out-of-our-hands factor to turn things around.

We can.

We just need to all start feeling better about the economy. Then buying real estate. Then investing in real estate development. Then selling real estate.

See how easy that sounds? Unfortunately, getting the general public to do it will probably prove more difficult.

But if consumer confidence is in fact our biggest burden, how should we go about turning it around?

Any suggestions? Post your thoughts below…

Yesterday, we talked about how the housing decline was costing Hispanics construction jobs–but, according to today’s unemployment report, the whole industry is suffering.

That’s not to say that Hispanic workers are any better off than they were earlier this week, as evident by the number of articles that have popped up in the past few days about the issue, including:

• One in the Washington Post, which features
  Javier Amurrio, a 38-year-old immigrant from Argentina who was unemployed for 7 months in 2007 and became one of the Hispanic homeowners discussed in our earlier blog who lost his home as a result;

• And an article in the Chicago Tribune, that mentioned that African-Americans also have struggled with a 9 percent
  unemployment rate in the first quarter;

But it is today’s government report, showing that the unemployment rate rose 5.5 percent in May–which is the biggest increase in two decades–that is particularly worrisome. We knew various sectors were sagging; now, it looks like unemployment is become a harsh reality and risk for almost everybody.

According to the Bureau of Labor Statistics, employers cut 49,000 jobs last month: 49,000 jobs.

We’ve been on a job losing streak all year. And, not surprisingly, construction is one of the hardest hit sectors because of a declined demand. Construction employment sunk by 34,000–its 11th consecutive drop–The Wall Street Journal said.

The financial industry dropped 1,000 jobs; retail lost 27,100, its sixth-straight decline.

One small good point of news: Average hourly wages increased by $0.05–0.3 percent–to $17.94, a 3.5 percent increase from 2007, which the Journal said suggests that wage costs are remaining manageable.

But that’s only good news, of course, if you still have a job. And judging by today’s numbers, many don’t.

The continued unemployment rate growth–if it does in fact increase again in June–is likely to have a huge effect on the already struggling U.S. economy. How are Americans going to cope with less (or no) income when necessities like food and gas prices keep rising?

Well, consumer spending is going to take a hit. We’ve already seen a drop-off this year in big-ticket item sales. And we’ve seen a decline in demand for new homes.

The bottom line: If unemployment keeps rising, Americans are going to hold on to what money–and property–they have, and we can kiss any hope of the housing slump turning around by early next year good bye.

Even if people want to move into a new home during these trying times–which we hope they will, since the bloated housing inventory needs to decline before home prices and construction demand significantly pick up–it’s going to be tough.

Financing is hard enough to get if you have good credit these days–but apply for a home loan without a job? Forget it.

The housing market should be concerned that unemployment is rising–and not just because it’s hit the construction sector hard.

The question is: How do we begin to turn this messy, troubled economy around?

Will it take more jobs? Less expenses? Incentives for Americans to buy homes, like the National Association of Home Builders and Toll Brothers CEO have suggested?

What do you think?

Two news stories this week showcased the New York apartment market’s current troubles–both with building, and with renting.

Last week, we covered the sad news of yet another fatal crane collapse at a residential building site in New York–the city’s second in recent weeks.

Not surprisingly, the city has reacted strongly: They’ve stopped use of the Kodiak cranes, and developers at five sites are losing thousands per day as a result, according to Crain’s New York Business.

Temporary buildings commissioner Robert LiMandri issued stop-work orders for all seven of the Kodiak cranes operating in New York so that the city could inspect them.

The cranes were being used at five sites–most of them with a  multifamily component: the accident site, First Avenue at East 91st Street; a mixed-use development at 808 Columbus Ave.; a new W Hotel in the financial district; a luxury residential building located at 245 10th Ave.; The Laurel Condominiums at 400 E. 67th St.

Obviously, safety is a priority–but since city officials haven’t given the developers a timeline for the inspections, they’re forced to wait, and that’s an expensive pause.

The delays could take weeks, Crain’s said; although the crews have been mostly reconfigured to do work that doesn’t involve the crane, that could make it very difficult for those projects to stay on budget.

And it’s becoming a growing problem in the city: The amount of construction projects that the New York City Department of Buildings has stopped due to safety violations has increased 79 percent since January.

The most recent crane accident may also result in a new training requirement for entire crane crews–a 30-hour initial training and additional eight-hour course every three years, according to Crain’s.

Construction delays can be costly for developers and cause big problems for the renters waiting to move into the new or rehabbed buildings–although, according to one recent news story, New York may have less renters to worry about.

Fox quoted the New York Post as saying rents are starting to decline in the Big Apple. A studio in York Avenue and the East 70s is running about $1,500 a month; a two bedroom in the West 170s is renting for the same amount, according to Manhattan Apartments, Inc.

The Financial District and Upper East Side are also offering deals, the Post said.

Move further away from the subway, and things get even cheaper.

The decline is an interesting turn of events for New York, which has largely avoided the giant real estate price declines that the national housing slump has caused in other cities.

However, last month, numbers indicated that the slump may finally have reached New York–as we recently reported, residential building permits have sunk 50 percent in the past year in New York City, which clearly indicates there’s less of a demand for housing.

And now, according to Fox, desperate landlords are willing to pay a month’s rent for new renters or foot the broker’s fee.

You could argue that less demand for rental properties means more New Yorkers are buying apartments–but those lower building permit numbers indicate that may not be the case for long.

Could New York–which long withstood the housing slump–finally be feeling the effects? And is this an indication the national housing decline is nowhere near over–and in fact, spreading to claim new victims? What do you think?