As soon as home prices began tumbling five years ago, real estate agents, anxious homeowners, would-be buyers and panic-stricken lenders began looking for "The Bottom."

While it's so far proven to be as elusive as the Grail, unicorns and other totems of mythology, I'm confident that someday we will find the bottom in the housing market.

But let's not confuse a bottom with a bounce back. They are not the same thing, and the first does not assure the second.

By now it's obvious to all that housing, like tulips and dot-com stocks, was a classic speculative bubble. But the thing most people don't appreciate about speculative manias is that it can be decades, if ever, before asset values or prices revisit the lofty levels seen during the peak of the mania.

For all the gold fever of late, prices when adjusted for inflation remain more than 40 percent below the all-time peak in 1980. Or, consider the tech stock-dominated Nasdaq index, which is 46 percent below its 2000 peak. Tulips, meanwhile, found a bottom 475 years ago.

Yet many homeowners and real estate boosters seem afflicted with the assumption that, once a bottom is reached, homes will begin to recover most, if not all, of the value lost during the past five years.

"There's no reason to expect that," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. "It'd be like buying into Nasdaq and assuming it's going to bounce back to 5,000."

Baker was among the first to warn that the run-up in home prices was a speculative mania that would end badly. His 2002 paper was met with scorn far and wide. The Joint Center for Housing Studies of Harvard University responded with its own study that declared there was little basis for concern about a housing bubble.

Few were as dismissive of Baker's research as David Lereah, then the chief economist for the National Association of Realtors. Lereah's 2006 book, "Why the Real Estate Boom Will Not Bust -- And How You Can Profit From It," occupies a special shelf in the business canon, alongside James Glassman's late 1999 tome, "Dow 36,000."

Baker worried in 2002 that housing prices nationally could fall as much as 22 percent, wiping out $2.6 trillion in household wealth. The plunge proved even deeper because the bubble kept inflating for four years longer. Nationally, average home prices are 34 percent below their 2006 peak, according to the S&P/Case-Shiller Index.

In Minnesota's 13 most populous counties, the median price fell 26 percent between 2006 and 2010, according to sales data compiled by the Minneapolis Area Association of Realtors. Of the 103 sales markets tracked by the group, 101 have experienced a decline in median home prices since 2006. Meanwhile, the average price of homes sold in 2010 is roughly the same as it was in 2001.

Lost decade, anyone?

Just for fun, I tried to reach a few people who were brave enough to call a bottom in the housing market over the years. One who was sporting enough to take my call, Mary Bujold, is president of the Minneapolis-based real estate consulting firm Maxfield Research. I could almost hear her cringe when I reminded her of her March 2009 prediction, which she offered up to a Star Tribune reporter.

"Please, you don't have to read it back to me," Bujold said.

For Bujold, the biggest surprise was how deeply distorted the market turned out to be, and how much the entire economy had come to rely on consumer confidence tied so closely to a falsely inflated home value.

"When the whole tower started to tumble, I think there was a shock as to how far-reaching those effects were," she said.

That's the thing about bubbles: The bottom always seems to be six to nine months away, and it's always a lot further down than anyone ever led you to believe. • 612-673-1736