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The Housing Bubble Pops

Serious are the signs that the housing bubble has started rapid deflation here in the Washington, D.C., area. Summer 2004, my family chose not to purchase a house in Bowie, Md., because, even then, I was convinced that housing prices were way over-inflated. Since, I’ve warned plenty of people the end would rapidly come.

Earlier, I expected the housing bubble to stay inflated into 2006, but Hurricane Katrina’s widespread economic rumblings appear to have put on the squeeze. As recently as October, New York-market deflation forebode coming trouble. 
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Pop Goes the Housing Bubble

Last summer, my wife, daughter and I scoured the Washington suburb of Bowie for a house to buy. After a month of house hunting, we decided to stay put in our rental house, located in a nicer neighborhood and much closer to downtown Washington (We live off of Connecticut Ave. just three miles from the city).

The decision not to buy came with great angst. Rising real estate prices made the potential equity gains look promising, and we were simply ready to be homeowners. But the math simply didn’t work. When factoring in taxes and insurance, our monthly mortgage would have approached $2,200, compared to our $1,100—starting this month, $1,200—rent. We couldn’t see how our quality of life would be better doubling our monthly housing payment, even factoring in potential equity gains or tax breaks.
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