Image via Chart of the Day

A 20 second scan of the headlines for the real estate tab on this blog will show you I’ve been bearish on U.S. real estate since this blog began several years ago, but I’m thinking it might be time to go from ultra bearish to neutral on select markets based on the following chart.

In certain areas, where supply trumps demand, home prices are ridiculously cheap when bought at foreclosure. In other markets, where supply is a problem and where the local economy supports a strong to average job market, homes are still a bit overpriced.

But on the national level, after averaging in the dogs (Phoenix, Miami, etc) along with the high fliers (New York, DC, etc.), it would appear we’re back to early 1990s levels on the median home price index, and could be closing in on early 1980s levels.

My only concern is that during the early 2000s, we built a disproportionate number of low to middle income housing — that has resulted in overwhelming numbers of foreclosures – to take advantage of the credit bubble, and that could potentially be dragging down the national index, where in the past, this wasn’t such a pressing concern.