So how does this delusion work?

Just a filler.

I think I may have noted in the past how real estate people and newspapers are delusional. Well, at least the media is. The real estate people are eternal salespeople and, as usual, the genius who went to journalism school, whatever that is, just repeat what they hear, spin and all. They must think it will help world socialism in some way.

Here is the NYT, which we all know is delusional, passing on the good news about the real estate market; nay, the economy in toto.

“Recession is over, economy is recovering — let’s look forward and stop the backward-looking focus,” the Wells Fargo chief economist John E. Silvia wrote in a research note.

You see, when the freefall turns into a modest collapse, that is great news. Wells Fargo, by the way, is located in California, home of delusion, as well as illusion.

The index of 20 metropolitan areas had an annual decline of 17.1 percent in May from the same month in 2008, an improvement over April’s 18.1 percent fall.

Hooray. Great news.

Of course, a rational discussion of real estate sales would mention that investors are bottom feeding, grabbing up the walking dead. Another item of note is the coming pressure on the good loans. The bad loans, our Fannie Mae mandates, have pretty much sunk to the bottom of the ocean, but as the economy weakens (if you don't believe Mr. Silva) the more stable owners will start selling or filing Chapter 9. This will affect better areas and the psyche.

You may recall in recent decades when the GOP, for lack of a better name, would try to slow the spending in various places like medicare or social security, the left immediately announced that the mean-spirited Republicans cut medicare.

I just don't know how you deal with blatantly stupid ideas that the media, in general, repeat to the blatantly stupid people. The morons who walk amongst us then mutter "the Republicans are bad, they cut medicare...." You can't even begin to explain 7th grade math to them. Welcome to socialism.

So, if you try to stop runaway inflation, you are pushing deflation, I guess.

Slide in Home Prices Is Slowing Down, Index Shows

Isaac Brekken for The New York Times

Homes in the Las Vegas valley on Monday. The Standard & Poor's/Case Shiller home price indexes report released on Tuesday showed the first monthly increase in single-family home prices in nearly three years.

By DAVID STREITFELD

Published: July 28, 2009

The long slide in housing prices is continuing to brake, figures released Tuesday indicate.

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Home Prices in Selected Cities, Through May 2009

For the fourth consecutive month, there was modest improvement in May in housing prices, according to Standard & Poor’s Case-Shiller Home Price Index, a closely watched measure of the market.

The index of 20 metropolitan areas had an annual decline of 17.1 percent in May from the same month in 2008, an improvement over April’s 18.1 percent fall.

The report contained another, more startling piece of data: prices increased in May by a half-percentage point from April, the first positive monthly return for the index in three years.

“It is very possible that years from now we will say that April 2009 was the trough in home prices,” S.&P.’s vice president for index services, Maureen Maitland, said.

But skeptics were quick to note the increase was measured in absolute terms. When adjusted for seasonality, a standard measure, prices showed a slight drop.

From its peak three years ago, the index is down about a third, pushing prices in major cities back to where they were in 2003. Analysts said that the improvement over April was unexpected and welcome, but they differed over whether it could be sustained.

“Recession is over, economy is recovering — let’s look forward and stop the backward-looking focus,” the Wells Fargo chief economist John E. Silvia wrote in a research note.

Ian Shepherdson at High Frequency Economics was more cautious. “We would not expect any gains to last,” Mr. Shepherdson told clients, “because prices are still high relative to incomes and rents, and also because the uptick in sales will, we think, prompt a new wave of supply.”

For 16 months, beginning in October 2007 and ending in January 2009, the Case-Shiller index posted record annual declines. As recently as February, all of the 20 cities in the index showed a decline from the previous month.

In May, only five of them did. The cities that are still dropping are Las Vegas and Phoenix, the two places where the bubble was the worst, as well as Miami, Seattle and Los Angeles. Prices improved in 13 cities.

A housing market where prices are consistently stable — never mind one that rises — nevertheless appears a long way off. Many analysts think the most hopeful possibility is that prices start to rise modestly on an annual basis late next year. But that date could be pushed back even further if the economy comes out and then dips back into a recession.