If the real estate market is back on track after a recession or even a small dip, it could be a great time for investors to start engaging in 1031 exchanges. Using an exchange, you can defer capital gains taxes on the first property sold if you meet all the stipulations for acquiring the second property. Read on to learn more about signs that the market is hot.Sign #1: For Sale Signs DecreaseThis is something you can spot from your own neighborhood. If less houses are up for sale, it is because buyers have become active in the market again. You can also look up statistics to get a better sense of how this applies in your region, state, or even across the country.Sign #2: The Job Market Bounces BackWhen unemployment goes down, more people are able to start purchasing homes. While these homes are not part of 1031 exchanges, they are indicative that the overall market is coming up again, which is a good sign for investors, too. Properties are treated with higher value when the market looks good.Sign #3: Days on the Market DropsThe longer homes are on the market, the more investors and realtors have to worry about the health of the industry. When homes sit empty for some time, the supply is bigger than the demand and the values of the properties often have to drop in order for sellers to get any kind of return or unload the property at all. When homes are snapped up quickly, this is a key sign that the market is in good shape.Sign #4: More Buyers are in the MarketYou can find statistics to learn more about the percentage of buyers interested in buying a home or even the activity involved in commercial sales. The higher these percentages are, the lower the income is that is required for an initial purchase.Knowing when to sell and when to buy is a crucial skillset for the modern real estate investor. If you have never had the opportunity to use a 1031 exchange to help you defer capital gains taxes on properties for commercial use, there has never been a better time than now. Think about how using a 1031 exchange might allow you to sell one property and acquire another one that might have otherwise been out of your budget range. 1031 exchanges provide a lot of opportunity for investors.