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It depends on where you live. Our national economy is really made up of regional economies. California may be booming but the economy is lagging in Oregon and Washington. Unemployment has gone up .5 % in these two states since January, 2005.

The stock market is lagging because people are putting all their cash into real estate. That is fine if you can take $ 350,000 cash out of your 401(k) to pay for a home outright. Some people are paying cash for homes in other states to prepare for retirement. Great, if you can do it.

In the meantime, speculators are buying homes they will never live in with plans to flip them at huge profits. Beware of homes being flipped in your area. You might be caught with your pants down later. Read more about real estate bubble? 'Nuff said.