We may - emphasis on the word may - be seeing the first glimmer of hope in the market. History often repeats itself, so it would be wise to keep your eye on this number.

Buried in the news yesterday was a little note from the National Association of Realtors. They reported an index of sales contracts on previously owned homes rose 7.4% in August from the prior month. The NAR's pending home sales index was designed to try and measure which way the housing market is going in the future.

Often the industry that crashes first in a financial crisis is the first to recover. If history does anything well it repeats itself. So I'm keeping my eye on real estate.

This index has been long known as a LEADING INDICATOR and this is critical. As a "Leading Indicator," it's forward looking; like a crystal ball for the housing industry. Perfect? No, but it's not bad either. And that's why I see this as the first glimmer of hope.

The index was also up 8.8% from August 2007. They recorded gains of 18.4% in the West, 8.4% in the Northeast, 3.6% in the Midwest and 2.3% in the South. Even July's pending home sales index was revised up, to a decline of 2.7% from a prior estimate of a 3.2% decrease.

Karl Case, the "Case" of The S&P/Case-Shiller Home Price Indices (one of the best-known measures of the residential housing market) said in September that he "thinks that the housing market may be near a bottom." If he's right, financial firms may be able to breathe a sigh of relief.

And in a paper presented before the Brookings Institution in Washington, D.C. that same month, Mr. Case argued that there is cause for optimism. He noted that of the 20 metropolitan areas covered by the Case/Shiller index, nine have shown prices slightly improving in recent months. He noted that the relationship between incomes and home prices has neared a level seen at the end of past housing slumps.

Buyers are finally coming to the table. Prices have dropped significantly in many areas; Fannie and Freddie have been stabilized. Pent up demand is letting off some steam.

Now, please don't get the impression that I'm bullish on the U.S. Real Estate Market, but I'm looking, I'm watching, I'm following the data.

There will be huge opportunities again to be made in real estate. History will repeat itself...again. And I want to be there when it happens this time.

DAVID NEWMAN, Market Analyst