You won't hear the housing bubble pop, but you could begin hear it give off a slow hiss.

Median home prices were up only 1.8 percent during February, March and April compared to a year earlier, according to Deloitte Research's Leading Index of Consumer spending.

That's a sign the real estate market is slowing as well as a signal it probably won't come to a screeching halt.

The index says as recently as December 2004, real home prices were rising at double-digit rates.

Not any more.

"There has been much discussion recently about a housing bubble, but the truth is that home price appreciation has slowed considerably in the past three months," said Carl Steidtmann, chief economist of Deloitte Research and author of the monthly index.

He also says forecasts of doom and gloom in the real estate market are passé.

"The time to talk about a bubble was last December," says Steidtmann.

"Consumer spending growth in the summer months will be largely dependent on the direction of home prices and job growth," continued Steidtmann.

"As job growth continues to accelerate, we should see a corresponding pickup in real wage growth," he added.

That's the opposite of the message in "The California Report: Beware The Froth," recently released by the highly accurate University of California-Los Angeles Anderson Forecast. The forecast accurately predicted the last recession and California's slump in the 1990s.

While the forecast credit's the hot housing market with fueling a lackluster economy in California and the nation, consumer spending based on home equity gains is an addiction to phantom wealth.

The economy is too weak to sustain any softening of the housing market. A softened housing market could begin to dry up the home grown stash of equity consumers have been squandering on cars, furnishings, appliances, home repairs and other items historically purchased with incomes and savings.

Also, given the high rate of discount loans and interest-only mortgages, much of the equity is market based with consumers contributing less equity by way of paying down the mortgage.

The forecast calls for the economy to weaken and experience another recession as early as 2006.

"Prices don't have to go negative to have an impact, just 15 percent to zero percent is enough to start the dominoes falling," said "Froth" author UCLA economist Christopher Thornberg.

Despite Steidtmann's bullish comments, his index, reveals a mix of conditions that look more like the economy the Anderson forecast sees.

• Home price appreciations have slowed sharply, despite volatile housing markets on the East Coast and in Florida.

• After a year of modest declines, real wages now appear to be declining at an accelerating rate, as rising energy prices push up the cost of living and rising benefit costs hold down wage increases. In May, real wages were down 1.1 percent from a year ago.

• Initial unemployment claims fell in May by approximately 10,000 claims per week. That helps offset the weaknesses revealed elsewhere in the index.

• The tax burden has risen slightly since March 2004 as continued economic growth pushes some households into higher income brackets.

Published: June 29, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.