It's over."

Thus began yet another conversation about real estate. The man speaking was a real estate developer and investor from Florida. The man listening was a writer from Maryland. The man recording the conversation was your editor.

"I have been trying to sell my house for two months," responded the man from the Old Line state. About 20 people looked at it, but not a single person made an offer."

"You're going to have to lower your price," said the Sunshine State man. "People still think they can get bubble prices for their property. But it's over. I mean, the bubble is over."

Prices may not crash, opined the developer, but the bubble-rate rises are finished. We knew they would come to an end someday. If our friend is right, the precise day was the 16th of December 2005. Why that day? We don't know. Perhaps it was the 13th rate increase from the Fed; it had an unlucky sound to it. Maybe it was the spike in the price of gold. Or maybe it was nothing at all. When things need to be tipped over, there are always points when they will be. Maybe the tipping point for U.S. real estate prices came last week. Maybe it will come next week.

But what will happen?

To this question we have no better answer than anyone else. We notice that the tipping point for bubble gains has already come and gone in both Britain and Australia. Both economies seemed to count on further bubble gains in order to keep going. But when the gains ceased...the economies kept going anyway. Go figure.

In Britain, house prices rose 22% in 2004. So great were the increases, and so used to them had the British lumpenhouseholders become, that we predicted doom for the whole limey race when they came to an end. Well, along came 2005. House price increases dutifully came to a stop - just as we said they would. There is still a dispute as to how much of a stop they have come. Some analysts think they are still creeping ahead...just at a very slow rate. Others think they are going backward, but no one doubts that the house-price bubble is over in Britain.

Along with the end of the bubble came many of the expected signs of despair and funk. The number of people going broke is higher than it has been since Britain itself went broke in the 1970s. So are there more houses being repossessed than there have been for a dozen years.

Similarly, in Australia, the line that described house prices had been almost vertical in recent years. Then, more recently, it had begun to flatten out...and most recently it was even sloping downward, with house prices slightly lower than they were a year ago. Similarly too, the economic situation has darkened for many Diggers, but for most of the folks Down Under, life goes on just as it does for the residents of the British Isles from which so many came.

That is the part that puzzles us. We understand the bankruptcies. We get the foreclosures. We saw them coming. What we didn't see coming was so much nothing. That is, we saw the economies of all three Anglo-Saxon countries - Britain, Australia, and America - dangerously dependent on house price increases. When house prices stopped rising, we expected a lot more trouble than has so far revealed itself. We have not been to Australia for many years, but our people on the ground tell us that things seem perfectly normal. If the end of the world has come, it is news to the Aussies. They are still spending money. The economy is still expanding. No worries, mate.

Likewise, in Britain, there is no sign of calamity. Elizabeth was there only the day before yesterday. "Is the economy collapsing?" we wanted to know. "Are investors jumping off Blackfriar's Bridge? Are hedge fund managers lining up for hot soup? Are homeowners packing up and moving to the New World?"

"If they are, we saw no signs of it," came the reply.

So, dear reader, there is life after the real estate bubble after all. What kind of life remains to be seen.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.