So if the housing bubble bursts

[Horse with no Name]

and the dollar is devalued...with oil/gas prices at record high, what is the next step of progression?
Looks like North Texas is getting ready for a hit.
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/051006dnbusresales.17fad45b.html

Has the North Texas housing market finally turned down?

It's too early to say, but April's 13 percent drop in pre-owned home sales from a year ago should catch folks' attention.

April's decline was the biggest year-over-year slide in local home sales in more than two years, and follows a 4 percent decline in March.

But of course there is an upside :sarcasm:
Sales of the highest-priced North Texas homes – those $1 million and up – were 21 percent higher through the first four months of 2006.

I wonder how many people out there STILL don't believe that the middle class is being directly assaulted?

[unschooler]

1. When housing declines further, maybe middle class folks will have

a shot at buying.

[JCMach1]

2. Housing bubble has been driven by people putting savings into homes

this is why we have a negative savings rate in this country...

In the long-run, this will be horrific:

1. if it crashes, the whole economy goes with it (think of the millions of people who have plowed all of their savings into their homes expecting to get equity back later).

2. If the trend continues and no crash happens, the poor and middle-class will continue to be priced out of the market...

[Horse with no Name]

3. So it is really a no-win situation? n/t

[bigscott]

4. not sure

those of us who are not leveraged 10000% will be OK - it is called diversification of (meager) assets. Also, regardless of how much you can "make" on your home, you also have a roof over your head

[Tesha]

9. For a lot of us, this is just a spectator sport.

Like bigscott, we bought our house to live in,
not to use as a money-making machine. As a result,
we're not leveraged to death and the market would
have to absolutely crumble into depression-level
tatters before we'd be "upside down" on our fixed-
rate mortgage.

So for us, the questions regarding housing bubbles
bursting are mostly just spectator sports. Well,
unless a non-uniformity in the bursting bubble
suddenly produced housing we could afford in a
place like San Francisco.

Tesha

[sendero]

13. It is not good..

... but it is particularly bad for those who have bet the farm on their house.

A house is something to live in, a long term investment as well. Once Joe and Jill Middleton start treating it like they were leveraged buyout specialists, they, and we, are heading for big trouble.

I don't believe in a full scale meltdown, but I believe the housing market will be slow for years and prices will be depressed, especially in areas where the speculation was most rampant.

[JCMach1]

17. That's just it... it's not REALLY an investment

that has been the mantra of the past 15 years or so...

[Robbie Michaels]

5. The market's shaky

I was a loan officer for two and a half years, and the signs are there. Some markets will get hit hard, while others may not be affected. The affluent parts of San Diego will probably have some sort of devaluation, but some cities in the region will get hit hard within the next year or so.

I just wonder what will happen to those people who choose to live in Riverside County and commute to San Diego for employment.

[rucky]

6. There hasn't really been much of a bubble in W. Ohio

so i'm not too worried about a burst, here.

I got out of California 3 1/2 years ago because of the turbulent market. it is positively INSANE to sink that much debt into a home. and every time I thought it couldn't sustain itself, it climbed higher. it blows my mind. incomes aren't that much higher out there.

[suziedemocrat]

8. Do you think it will go down for a year or two and then stop -

ot are we in for years of devaluation?

[fasttense]

7. There is definitely a slow leak in the housing market

If there will be a pop in the housing bubble is another question.

With the dollar's decline, the increase in the price of gold, silver and oil and the constant blatant rigging of the federal govt economic numbers, I would say we are in for some horrendous "stealth" inflation. Currently the federal government pretends that inflation is a little over 4% (depending on which index you look at), but everyone knows it is much higher. Reality based economists say it was about 12% last month. Even the feds say inflation increased this month so you can bet inflation for the reality based crowd is about 14% this month. Expect it to continue to rise and rise. Keep those wheelbarrows handy, you will need them to pack your cash into when you go to buy a loaf of bread.

[meisje]

10. Columbus- Dominion Homes loses $3.9M in 1Q, predicts loss for year

Dublin-based Dominion (NASDAQ:DHOM) said the loss worked out to 49 cents a share, reversing a $642,000 profit, or 8 cents a share, in the first quarter last year.



It blamed the loss on finishing fewer homes than expected and a 5.5 percent drop in profit margins because of "competitive pricing pressure" from the slowdown in new home sales in Central Ohio and Kentucky. It said that was especially true in the Columbus area, as several competing homebuilders have been offering steep discounts. Dominion also builds in the Lexington and Louisville, Ky., areas.

The loss would have been worse, but the company recorded a $1.8 million gain from its new Centennial Home Mortgage LLC mortgage-banking joint venture with Des Moines, Iowa-based Wells Fargo Home Mortgage Inc. The joint venture takes over Dominion's mortgage-origination business from Dominion Homes Financial Services Ltd., which has come under regulatory scrutiny for a high level of defaults by Dominion home buyers. Wells Fargo Home Mortgage, a subsidiary of San Francisco-based banking company Wells Fargo & Co. (NYSE:WFC), paid Dominion for a 50.1 percent stake in the venture.

Dominion's revenue in the first quarter dropped by a third to $61.8 million, from $92.6 million a year ago, as the number of homes it completed fell to 315, from 478 last year.

The company's backlog of homes under contract for construction stood at 590, with a sales value of $118.2 million, versus a backlog of 780 homes worth $157.8 million at the end of the first quarter 2005.

Dominion's sales were also down in the quarter. The company signed 475 new contracts, down 24 percent from 626 contracts a year ago. The average sale price fell as well to $188,000, from $193,000 last year.

That doesn't bode well for the remainder of the year. Dominion CEO Douglas G. Borror said in the earnings release that he expects to finish 2006 in the red.

"Based on the level of sales we are currently experiencing, we do not expect that 2006 will be a profitable year," he said. "However, we are undertaking several initiatives to reduce the expected loss and position the company for future success."

He said the company has been building different types of houses, has been cutting costs, and has cut back on land purchases.

[w8liftinglady]

11. dallas area is one of the highest foreclosure areas

http://www.realtytrac.com/freeSearchResult.asp?zipOnly=true&zipcode=dallas%2C+TX&searchFormCity=dallas&searchFormState=TX&searchFormZip=&x=44&y=7

[Joe Fields]

12. It really isn't a crisis, yet. Only a few markets have housing bubbles.

I am not an expert, but my sister is, on this particular subject. If you live in Miami, Phoenix, a few areas in California, and a few scattered places elsewhere in the U.S., then yes, there are problems. But so far, the vast majority of the rest of the country isn't in any trouble.

The facts are that many of the aforementioned markets were of an inflated nature, grown and fueled by unreasonable investment speculation. The prices of property in those markets are falling back to earth.

[WinkyDink]

14. In the Lehigh Valley, PA., near NJ/NYC, there is NO down-turn.

More and bigger homes go up every day, all over.

[dysfunctional press]

15. same in chicago...

corner gas stations are being torn down for 3-4 story condo buildings...there are at least 5 such projects currently under construction within a mile of me.

[SmokingJacket]

18. That area is nuts.

I have lots of family there. Every time we visit, another cornfield is gone. In ten years the place has changed from small-town/rural to freaking carpet-o-homes.

It's also atypical, I think: the highway going in suddenly made the area accessible to NY/NJ commuters. Where I live in NY, too far to commute to NYC, the building boom didn't really happen.

[Ioo]

16. House Market - Even | Condo Market - WAY DOWN (Wash DC)