By Ben W. (bdarbs) - Renter by Choice

Buyers who think that now is a good time to buy a home are crazy. If they aren't crazy, then these poor souls have been led astray by the real estate propaganda machine. Here's why:

Home prices are currently disconnected from the fundamentals that should rule the real estate market. One giveaway is that rents haven't kept up with the rising home prices. It costs at least twice, maybe three times as much to buy a house as it does to rent one, and no matter how you crunch the numbers, in nearly every rent versus buy analysis, renting makes the most financial sense.

There is also a huge problem with affordability. From coast to coast, potential home buyers earning the median household income cannot come close to affording a median-priced home. This is because salaries, like rents, did not keep pace with the bubble-inflated home prices.

This nation is now trapped in the largest bubble in our history. There is little doubt that the same circumstances that led to this bubble's inflating will inevitably pop it, finally driving down prices. Good news for those who do not currently own homes - but very bad news for homeowners who hoped to see their properties continuing to appreciate in value.

Prices can't stay disconnected forever - they must inevitably come down. There still seem to be buyers out there who don't know this and are still willing to offer more than a home's asking price if need be. They justify the decision by saying things like 'it's a buyers market...I need to make my move now', 'renting is just throwing money away', and 'real estate is the best kind of investment'.

These people are, unfortunately, about to make possibly the worst financial decisions of their lives, perhaps because they have been brainwashed by such organizations as the NAR and DataQuick (two entities the mainstream media uses to report so-called reliable housing data). These organizations, and others like them, have a vested interest in keeping those home prices rising and have been deliberately misguiding the public for years with their creative ways of manipulating data.

The real estate industry manages to spin everything to create the necessary (for them) sense of urgency among buyers. These scare tactics lure the public into thinking that they must buy now before sellers get the upper hand or before the interest rates go up. That line of thinking is just insane. How could it be justified to buy a home with a low interest rate if that home's real value is on its way down? It isn't. If rates keep going up, then prices will be driven even further into the ground.

The bottom line is that no matter how you look at it, now is a bad time to buy.

Why are real estate prices still so high?

There are many reasons why real estate prices tend to be sticky. For one thing, real estate takes a long time to sell when compared to stocks and other securities. Other reasons:

Sellers are reluctant to take any loss, partly because they tend to become attached to their personal residences and may assume their houses are worth more than the market bears out. In other cases, sellers simply can't afford to accept lower prices, particularly if they bought when prices were at their highest. They're not looking to make a profit, they're just looking to pay off their mortgages and break even.

Even with this in mind, now's still the time to sell. Sellers should cash out while they still have some equity left over from the boom, then they should just rent until the dust settles. This is exactly what I did. I acquired three properties over the past few years, then cashed out on all of them a little over a year ago when the market showed signs of slowing. Now I rent in a nice neighborhood in the San Francisco Bay area, waiting for the market to return to reality. The fact is, I can afford to rent a MUCH NICER home than I could buy right now. When this situation turns around, and I can afford to buy a house at least as nice as the one I can rent, then the market will have reached equilibrium and it should be a good time to buy another house.

Will there be a tipping point when home prices all over the country suddenly come crashing down?

I believe there will be one, and I hope it will come soon - otherwise we could suffer a decades-long housing recession similar to the one in Japan. If the market manages to correct quickly, it will be better for our economy.

What is needed to expedite this turnaround is a change in consumer sentiment. This alone could bring about this tipping point and bring the market back to reality. This may well occur when tales of adjusting ARMs, subprime foreclosures , and lost equity become mainstream and all those glamorized TV programs showing house flippers making easy money disappear.

And for the record, I don't believe the government should step in. The proposed subprime bailouts are a bad idea, as taxpayers should not be made responsible for funding mortgage lenders' greed and stupidity.

How can we pop this bubble?

Well, we certainly can't count on the NAR, DataQuick, or even the Fed to change their ways and start telling the truth. If they did this, they'd need to admit that they had previously been lying to the public to serve their own interests.

What we need in order to change buyer sentiment is a grassroots effort focused on educating the public with the truth. You can help get things started by educating yourself and then sharing what you've learned with others. Start by reading eFinanceDirectory.com's daily housing bubble news articles, Patrick.net's housing crash news, and the contributions of housing experts like Schahrzad Berkland, Rich Toscano, and Warren Brusse. eFinanceDirectory.com has conducted interviews with many of them here.

You can also share your own housing crash horror stories with eFinanceDirectory.com so your voice can be heard. If you lost a house to foreclosure, are in debt up to your eyeballs thanks to an adjusting mortgage rate, or would like to share your opinion about the housing bubble, you can send your story to moreinformation @ efinancedirectory.com. They'll publish it so it can be seen by thousands.

If you are as passionate about the bubble subject as I am, help get the word out. Create accounts with popular social bookmarking sites and vote for this article and your other favorite housing bubble articles. It takes only a few votes for an article to get popular and reach the masses.