Bernanke's speech to home builders:"housing may no longer be viewed as the secure investment it once

[Lionel Mandrake]

7. Good!

Housing was viewed as a "secure investment" only because people expected house prices to rise forever. People would buy houses they couldn't afford, believing they could always take a profit, if necessary, by selling their houses.

The bubble burst about five years ago. Now almost a third of homeowners have negative equity. That's bad, but it's good that people now have a more realistic view of the housing market.

Eventually housing prices will reach bottom. Soon after that, realistic expectations will be superseded by irrational exuberance, and the next bubble will start to grow. Realtors have ways of amplifying that growth, e.g., by creative accounting which makes sales prices seem higher than they really are.