“How’s the real estate market?” Pause. “Things lookin’ up?”

It seems scripted, almost a conspiracy, or a joke that Realtors weren’t invited to share. This a routine repeated daily to those in real estate. If nothing else, the general public has faith that the residential real estate market is “coming back,” “looking up,” or “picking up.”

And it should be. Prices are at late 2003, early 2004 levels and it is difficult to watch television or listen to the radio without being reminded that interest rates are at an “all-time low.”

The fact is that they are very low, but not an all-time low. Scott Ractliffe, a mortgage loan officer with Pinnacle Bank, says rates are at 4.5 percent for a 30-year mortgage and 3.625 percent for 15-year loans. “The last time rates were at or below this range was July through November 2010,” he adds.

So they are not at an “all-time low,” he says, but “other than those few months, interest rates have never been this low.” OK, they are at an all-time low, or perhaps tied.

At any rate, prices this low and rates at historic lows should lead to staggering sales figures, but that is not the case. According to the Greater Nashville Association of Realtors, home sales in May were down as compared to May a year ago.

Last May, the country was enjoying the fruits of the end of the first-time homebuyers’ tax credit, so that could affect the numbers. However, Nashville was recovering from the flood in May 2010, which caused sales to slow in many areas.

It is impossible to calculate the effect the flood had on the Nashville real estate market. On a positive note, it does not appear that flooded areas have been stigmatized by the disaster as homes that were completely flooded in Bellevue are selling after having been restored. There are slight reductions in values, but they are selling as the buyers are seeing the flood as an anomaly, not a trend.

In 2006, when the market peaked, interest rates were hovering 6.75 percent, a four-year low, but almost 25 percent higher than today’s rates. Home prices were approximately 20 to 25 percent higher. These numbers are staggering. The monthly payment on a $300,000 home with a 30-year fixed rate mortgage is $1,520, according to Ractliffe, and $2,163 on a 15-year loan. And that home would have cost $400,000 in 2006.

It does appear advertisements are accurate as far as now being the best time to buy a home in this area. Unemployment rates are not disastrous, yet home sales are sluggish. But, as the laymen say, “it’s lookin’ up, right?”

It is when all things are considered. In 2007, a large percentage of the loans made in the previous four years were bad loans and getting worse. Home prices had increased for 13 consecutive years without as much as a hiccup. Millions of those loans would result in foreclosures causing the prices to drop. The buyers were obtaining, in many cases 103 percent loans. When the market turned, there was no way out. Sellers had no cash to bring to closing, no cash invested in their properties and no equity.

In contrast, virtually every home loan made in the past three years is solid. Prices are stable and appraiser nervous and conservative. As a population, Americans are accumulating less debt. Many have refinanced their current residences and are going to sit this one out.

Yet, anecdotally, the scuttlebutt in real estate circles is that most Realtors are busier than they have been in years. In August, the 2011 sales figures will be compared to a previous year void of funny money and disasters, respectively.

Things will be lookin’ up.

Richard Courtney is a broker with Pilkerton Realtors and author of Come Together: The Business Wisdom of the Beatles. He can be reached at Richard @richardcourtney.com.