A buyer's market in real estate - this is the current phrase being used by people interested in selling you something. They say, because there are many desperate sellers, buyers are getting great deals. This is the standard sales pitch when markets change direction. But this time there is a hint of panic in their voices. Realtors and other real estate professionals are very heavily pushing this view - now is the time to buy. It makes you wonder why they are being so pushy.

It's quite simple. It's a myth. This is NOT a buyer's market. Sure, there are lots of desperate sellers. Sure, there are lots of houses, condos, and vacation properties to buy. So what? If it was a buyer's market, where are all the buyer's? Why aren't we all becoming instant millionaires making deals like nobody's tomorrow?

From one perspective, the salesmen (or saleswomen) are right - buyer's do have a great selection to choose from. They are also right when they say that prices are way down from last year. Wonderful. They don't tell you that the house you buy today has a decent chance of dropping 20 to 30% more in value in the near future. They don't tell you that you might be "upside down" (owe more on the house than it's worth) within months, even week. The March 29th edition of The Economist reported that the price of houses in major US cities dropped by 10.7% in January (see page 12). Almost 11% in one month.

That information, and the recent collapse of Bear Stearns, should tell people something. There's more pain on the way. Bankruptcies are beginning to rise - now companies are going under in big numbers. They are parking miles of empty rail cars in Montana. The shipments from the west coast to the interior have dried up. Banks have stopped trying to sell the houses that they are foreclosing on - the realtors won't take them and there's too much on the market already.

There's a recession on people. Bernake will eventually figure it out. You don't need him to tell you though, just ask Warren Buffet or this columnist. Recessions are bad for house prices. They also depress rents. That last point is not good news for investors who are also landlords. Big nugget of gold here - treat your tenants right. Do it now, before they go next door and take your income with them.

Key thing about this situation is that its a BAD time to buy. It's not a buyer's market. That's a myth. If you buy now, you stand a good chance of losing. The only people who win here are the salesmen (or saleswomen) who collect their paychecks on the transactions. Maybe the seller wins, if he/she can avoid bankruptcy or foreclosure.

This is not to say that there are no deals to be had. There are. But they are really tough to find.

Keep this in mind - just because a house is cheaper today than this time last year doesn't mean its a good deal. That "deal" will not look so good in a few months, unless you get really lucky. Prices are trending back to their 2002, and in some cases 1997, levels. The price inflation from speculation, bad loans, and sheer greed has got to correct itself.

What is a buyer's market, then? It's when the buyer can get property, from a decent supply, for a fair price. The buyer should not expect or fear market drops to his/her asset values. The buyer should be concerned about getting "upside down" in his/her mortgage. And the buyer is not forced to choose from a limited supply. The supply is neither excessive or limited. The supply just is.

When do you spot the buyer's market? Not on the supply side - that's where the myth lies. The buyer's market is on the demand side, when demand begins to even out the supply of houses. When demand gets to that point, prices stabilize and the market "hits bottom". You can't time it. Buy you can recognize it from month to month. Then you get in. Not now.

The current push that it's a buyer's market in US real estate is generally a myth. If people want to believe it, and they have deep pockets, then all the power to them. A real buyer's market, from this perspective, is when the buyer has a decent choice at a fair price - and can still be happy with it weeks and months later.