Journalists and Economists are cute. I love it when they try and tie down the vagaries of a market with simple, little rules and declare that they know the answer. For someone who believes in free markets (to an extent), I actually like the misinformation they spread. The more people believe the content they distribute, the more inefficiencies are built into the market!
In this article, the NY Times polls economists on various ways to price real estate and measure that versus the general market. In my opinion, such an effort is laughable. First, when did we start listening to economists? These guys were dead silent in the run-up of this bubble. Second, it's impossible to reduce a market (which is what real-estate is) to small little valuation ratios and get a right answer. If this were possible, then economists would rule the stock market and trust me when I tell you that economists have no place on Wall Street. In fact, the only time economists are employed on Wall Street is when the asset management firms need someone to write their shareholder letters or write research for the retail investing community. The public loves titles and for some reason they love the title of economist! Typically, whenever I read something written by an economist, I do the exact opposite of its conclusions.