"Many of my clients put this investment into a 401(k) or IRA because it's not money they'll actively trade," Shopoff says.

How much the real estate market recovers and when depends on the specific market and the overall economy. While the market will eventually regain some lost ground, it's a strong recovery that will drive returns.

"Population growth is what really matters," Stever says. "As long as populations increase in overcorrected markets, they'll bounce back. The markets really in trouble are those with flat or declining population. It's important to think of real estate on a market-by-market basis."

Rob Leinbach from Walton International says residential construction has slowed because the market overbuilt from 2004 through 2006.

"Home builders won't be able to build homes for the next couple of years due to existing foreclosed inventory," Leinbach says. "That provides a tremendous opportunity to buy land now and plan that land and get it entitled in anticipation of the next upturn.

"Anyone can buy an acre of land," he adds. "But to accumulate 2,000 acres in order to build a high-density master plan community takes a large capital commitment and specific expertise."

And for investors looking for a return on investment, it takes a lot of patience.

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