Despite his negative outlook, Talbott is pleasant and easy to talk to. During our phone interview I tell him I'm surprised to find myself enjoying a conversation with a guy who's predicting that the value of my family's biggest asset will fall by almost half. He says many people—including TV hosts—react with hostility to his message. "I would go on these talk shows, and within four seconds I could almost tell the value of [the host's] house and the value of his mortgage just by his questions," Talbott says.

So what does he make of the way the housing bust is playing out so far? He cites data showing that, nationwide, average home prices have fallen by around 5 percent. But he believes the true drop in value is probably steeper, since the current statistics are based on houses that actually change hands and don't reflect the huge glut of homes languishing on the market. That bloated inventory reflects the fact that many people aren't yet willing to acknowledge the reality that their home is worth less than they're asking for it.

Talbott believes we're still near the beginning of a five-to-seven-year cycle in which home values will fall back to the levels of 1997, when banks and mortgage lenders began letting so many Americans take out so many kooky home loans, which were the primary fuel for the boom. He also expresses surprise that the continuing stream of bad news from the housing market hasn't taken more of a toll on the stock market. Over time, it will.

Recently a congressional subcommittee predicted that the subprime mortgage crisis will result in 2 million foreclosures over the next few years. Talbott wonders if people really understand the magnitude of the suffering that will cause. "When people talk about 2 or 3 million people losing their homes, that makes Hurricane Katrina look like small potatoes," he says. "[And] this is spread out over the whole country."

So far many of John Talbott's predictions have been spot-on. But as the housing bust continues, homeowners in my neighborhood and beyond have every reason to hope his prescience proves short-lived.

Daniel McGinn is a national correspondent at NEWSWEEK and the author of House Lust: America’s Obsession with our Homes , to be published by Doubleday this winter. To preorder it, click here .

© 2007