The good news is that recent price trends are strong in residential real estate. We have a quarter of price growth in the bag. Prices have also fallen so far since the summer-of-2006 peak that affordability is roughly equal to what it was at the turn of the century (2000). Nobody can argue that a fall of 30% doesn’t make it easier to buy. Is it the best time to buy?

The bad news is that the financial media is incapable of balancing competing and complicating factors which any buyer of real estate must review.

If you look at mortgage payments and the number of past due accounts; if you look at the number of properties which are approaching or are now in negative equity (in which mortgage debt exceeds the value of the house); if you look at the supply of existing (not new) properties for sale; if you look at the systemic debt levels of consumers and of American society as a whole; if you look at unemployment; and if you look at the trends which history dictates after a credit crisis; if you look at all of these major factors, they are all negative for real estate.

Balancing these factors requires the intelligence to incorporate many different variables; a balance which is impossible on a breaking news story. All of these variables create a fuller opinion on the future of property values. You need this information to make a good decision about your most important investment – the purchase of your home. Look at the charts. Glance at the captions. What feeling does it leave you with? That feeling should be your “buy” or “sell” indicator.

The daily media is simply a dumb conformist blind man--chasing the latest number with no regard to competing claims, no memory, and no common sense.

EQUITY VANISHES: About $7 trillion has been taken from the wealth account of property owners. If there are 130 million housing units in the United States (rental and owner occupied), then owners have lost an average of $54,000 per unit they own. The loss is massive.