Are we in for a bubble burst?

[Steve]

In the past 5 years housing prices have doubled in many areas across the country. We seem to now have reached the tipping point and it seems prices are on there way down. This may be good news for those of you looking to buy a home but if you are selling one, you may be in for a rough patch. Do you think we will see a gentle lowering of housing prices or are we in for a real estate bubble bursting? Will Bernanke tank housing? - Ouch. It's getting harder and harder for real estate agents to put a happy face on the market. Sales are slowing, prices are falling, and the backlog of unsold homes is rising fast. And now it's suddenly looking like the Federal Reserve will raise interest rates again. To put it differently, some economists say: What goes up must come down. One housing bear, Ian Shepherdson, chief U.S. economist for High-Frequency Economics in Valhalla, N.Y., wrote June 6: "Ultimately, we expect the level of home sales to head down to, or even below, the long-term trend. When bubbles burst, they usually burst properly. Gentle deflations are rare."

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Around high it burst last year. Houses are dropping 50% of what they were appraised at 1 and 2 years ago. It's horrible. One lady in particular here, had her house appraised at $142,000 back in 2004, and she just had it done again in March, down to $79,000.

[Steve]

WOW! I had no idea it was that bad in certain parts of the country!