It’s official, we are experiencing the worst home price crisis since the 1930s. In the past year, home prices have tumbled by almost 15%. So much for the old dictum that you should put your money in real estate because at least then it’s safe.

That said, it’s amazing how resilient the economy has been to this drop. Most pundits wrote that the reason we stayed clear of a recession after September 11th is the massive increase in wealth people experienced thanks to appreciating real estate values. Why hasn’t the reverse of this trend caused a massive receession?

Some might say it has, but real estate is definitely not the only issue facing the American economy. I’d say if this slap is all the punishment we get for too loose monetary policy and dubious lending incentives for the last 7 years, then we’re getting off pretty easy.