CLARKONOMICS: The news on the housing market continues to be bleak, bleak, bleak. In just one example, the latest numbers from the Case-Shiller index show that home values in Phoenix are down almost 50% from their peak in July 2006.

This is not surprising considering that many Phoenix properties were not owner-occupied, but were bought to be flipped -- a trend that really fueled the overbuilding of houses.

There are similar numbers in Las Vegas and Miami (both down more than 40%) and San Francisco and San Diego (both down 40%). But you've got to realize that the housing stats are skewed by the bubble markets where people were trying to get rich quick on someone else's money.

So where's the good news in all of this? Well, so many sales today are of REOs (real-estate owned properties). That's where you buy directly from the bank after they foreclose on a property and let it go unloved and neglected for several months.

Meanwhile, half of all purchases in February were from first-time homebuyers taking advantage of incredible deals and fantastic financing, according to The Financial Times of London. So they're getting incredibly affordable housing.

In addition, true investors (not speculators) are buying REOs and fixing them up and turning them into rental properties. Clark was recently talking with a real estate investor who bought a 4BR/2B in the suburb of a major metropolitan area for $21,000!

That particular property needed lawn care, new carpeting, new paint, new appliances and a replacement for the HVAC system that had been stolen. The total cost of repairs was just under $15K. That's amazing! You may not find a new home for the cost of a Camry, but there are deals out there. It just requires thorough research.

Finally, a word about Clark's prediction that mortgage rates on 15-year loans will dip into the 3s by May 1. A kind listener recently informed us that at least one homebuilder is offering 3.625% on a 30-year loan.

But because that's a subsidized rate geared to boost sales, Clark isn't counting this one. So the pies may still fly…