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While home prices are imploding all over the rest of the country, euphoria persists in Aspen. Surely, experts say, the bust can’t happen here. It already has.

Appraisers seldom loudly contradict prevailing wisdom. But they have been writing it instead: The Aspen market has been largely flat since last summer.

Residents can see it in the new wave of open houses. Luxury condos (when was the last time a condo was just “pedestrian”?) are yanked off the market, and quietly re-installed a short time later with a large price cut.

This newspaper at one time had a section entitled “The Real World” which featured real news from outside Pitkin County. In The Real World today, one dream has been shattered: That home ownership is the Holy Grail — a dream to be fought for. The “perfect storm” of a mortgage mess, credit crunch, and falling home prices has caused a re-examination of the once-fabled American dream.

Nationwide, home prices have fallen an average of over 14 percent from early 2007 through early 2008, Standard & Poor’s reported last month. That sparked New York Times writer David Leonhardt to dust off the “rent ratio” — a tool which predicts when, in The Real World, it might be better to rent than to buy.

The rent ratio is a simple way to bypass all the pros and cons of renting or buying: The mortgage deduction, hideous homeowner fees, lost earnings on a down payment, or the direction of the market. If you like easy solutions, this is it.

The rent ratio is the market value of a home divided by the annual (not monthly) rent it could get. When it exceeds 20, it’s better to rent than buy. On a $500,000 home, the ratio would advise a rental deal when the annual rent falls below $25,000 (about $2,100 monthly). Or, any renter willing to pay that much should consider buying when the price of the same place is below $500,000.

Historically, Leonhardt noted, the ratio has been under 15. But since the dream of ownership became hotter, pushed by go-go mortgage deals, it’s soared above 20 in “hot” coastal markets like New York, Boston, Washington, Los Angeles or San Francisco.

While the bubble cooked, the asking price no longer mattered. Buyers judged affordability according to the monthly mortgage they could negotiate. Mortgages didn’t go up though sales prices did.

Now, on the other side of that mountain, the rent ratio has fallen below 20 in those once-hot Eastern markets but remains above 20 or 25 in parts of San Francisco and Los Angeles.

Leonhardt dismisses the usual advice of real estate agents preaching the gospel that buying is always better because it “builds equity,” allows renovations at will, and frees buyers from nasty landlord nightmares. This sermon, he says, is a “useful fiction.”

Pitkin County has unusual complications. The market has been loaded up with homes bearing strange names like? “monster,” “fractional,” and “time-share.” The West End of Aspen, once alive with modest miner’s cottages, is now a ghost town, eerily quiet at night as cash buyers would rather let their homes sit empty than be scratched up by proletarian renters.

In 2006, when the market peaked, developers found Jesus in a penthouse. The rush got so hot the City Council had to douse it. First, it toughened up regulations. Later, it threw up its hands, deciding to regulate the mess by treating its symptoms. It declared construction “holidays” on Sundays, or pristine periods like Christmas week, the Fourth of July, or Food & Wine weekend.

Now, we can’t figure out if the Klanderud Council left the barn door open or got victimized by pent-up demand, its own “infill” program, or the divine touchdown of Jesus in every imagined penthouse atop every formerly cruddy building in town. The jury on the Ireland administration will be out for quite a while.

Long ago, Pitkin County created a dual market, protecting local homebuyers from the condo-bondage free market. Prices were “affordable” on the condition that buyers forego the white-hot appreciation of the free market. We couldn’t build enough employee housing to keep up, but dreams persisted.

The Burlingame Ranch project came around, on the edge of town, to be derailed momentarily as City Hall recently blew a decimal point or two. The scandal is resulting in a massive shortfall and cries for brave new outside accountants with their decimal points in order.

One local lunchtime commentator noted it might be cheaper to simply pay local households $100,000 apiece to free up local employee housing by moving out than to bear $200,000-plus shortfalls on new units.

The market could cool down in Aspen. The seasonal rush for real estate courses at Colorado Mountain College could fall off. Former real-estate agents will content themselves with one deal a year, side jobs all over town, or both. Online brokers, fueled by recent court rulings prying open local multiple listing services all over the U.S., may multiply. The fallout has yet to fall out.

Writer David Leonhardt has bought his place but still swears by the efficiency of the “rent ratio,” useful to those retiring from Aspen and venturing back to “The Real World.”

For the rest of us, first things first. The local decimal point must be found and fixed.

The writer is a founder of the Aspen Daily News and appears here each Sunday. Counsel, console or berate him at ddanforth@aol.com. Your notes will be kept private unless you ask that we print them.