I am interested in getting out of the stock market and into real estate.  While interest rates are low, real estate itself is more costly to purchase.  Does it make sense to buy into the market, for investment purposes only, at this time?

Great question! It certainly seems like real estate is a "sure thing" these days, but the bidding and purchasing process is intense and can inflate the price of a home. If you have the time and the skills, you may want to consider a property that needs a lot of TLC.

Agree with ACarpenter.  The good deals are few now.  2001 was the time to get into the real estate market.  Prices appreciated 50 - 80% in 2003 from Jan 2001. 

I expect real estate to be really cheap by 2006.  That is when homeowners who took 3/1 ARM, 5/1 ARM get their interest rate adjusted up 2% and can't make the mortgage payments.  The economy will be at a lull and people will be losing jobs in California. 

I hope our new governor Arnold can turn it around.  But it is a mighty big ship, and few things change overnight.