You'd almost have to be living under a rock not to have heard about what's going on in housing and real estate these days. If by some highly unlikely series of coincidences the news about the subprime mortgage meltdown has somehow escaped your radar, you've no-doubt noticed all the "For Sale" signs in your neighbors' yards. Have you noticed those signs have been up for a while?

In some cases realtors' signs have stood in yards for months on end. Houses aren't selling as fast as they used to, and not for nearly as much as they used to.

Just a glance at what's happened to the price of iShares' Dow Jones US Real Estate index fund, IYR, in the first half of this year begins to tell the story. Real estate investors are hurting. And anyone with money invested in real estate, including homeowners like us, is hurting too.

Does this chart look frightening? How about the one below.

The six month period at the end of this 6 year climb in real estate is the proverbial tip of the iceberg. The magnitude of the news today in real estate gives me two important data points from which I can begin to decide what to do next

1. There is little doubt real estate has topped out. So many times before we've heard the bubble warnings, and each time the warnings were shrugged off. Not this time. Now we have real declines in following indicators. We have bankruptcies. Can scandal be far behind?
2. As the 5 year chart shows, there is plenty of room for prices to fall

So for me at least, the waiting game begins. There is no question this market will be back. It will grow again. Two important trends make this inevitable. World population keeps rising, but the amount of land on which to live and feed that population does not.