How low will real estate go? Who cares?

A recent Forbesarticle blares the headline "How low will real estate go?"

The piece quotes a bunch of experts and includes a bunch of statistics but, for most home owners, I think that asking how low real estate price will go is precisely the wrong question. The right question is "Are houses in my area at a price now where it makes sense for me to buy?"

Here's what David Farrell, director of tourism of the Long Island Foreclosure Tours, told Reuters about falling home prices. It's worth writing down:

"To me, that's intrinsic value in real estate -- when you can live in a house and every month your bills are lower than they'd be as a rental. It's hard to lose if you're a long-term purchaser and it costs less every month to buy than to rent."

Assessing whether home ownership makes financial sense is a much easier question to answer than how much lower the market will go. It's also a much more important question.

I've read a lot of stuff about the investment philosophies of the great bargain hunters -- people like Warren Buffett, John Templeton and Carl Icahn -- and I can say for an absolute fact that I've never found any great investor who listed being able to get in at the bottom of the market as a key to his success. Rather, buying at a price that made sense as a long-term investment and having the intestinal fortitude to ride out dips led these investors to great wealth. It can do the same thing for you.