Of course, this is the big time worry in property currently. . .

Will the red hot real estate bubble burst much like the dot-com bubble did not too long ago?

There exist a number of reasonable points of consideration on both sides of the concern. Regardless what turns out in the following years, it will impact millions of Americans, and consequently also tons of homewoners worldwide. Should the bubble does "blow-up" as analysts say, it is surely America could, or more like would, experience a period of recession. It would cut deep. At this moment the property business represents a prime cause that the overall economy has been decent lately. It is one of a handful of stable and strong areas of our economy.

First and foremost, to equate the property sector with the dot-com sector is off the mark. It’s equating apples with oranges. The real estate business has been and will always be a major sectors of America economy. It will never disappear in thin air and there will invariably be a need and demand for it. Buying into property will be profitable for the long term. On the other hand, the dot-com bubble was not built on anything more than wild projection. A lot of businesses were trading on the stock market for huge amounts of investment and never made any gain and ultimately never would.

As for me, some of the considerations is this: "Well, the stock market had the dot-com boom and then it fell flat, so now we have this property market bubble so of course it will succumb also." I just don’t agree with with that argument. Once again, property and dot-com are totally different sectors and business. Heck, if we can pay $20,000, $50,000 and even up to and exceeding $100,000 on automobiles, then putting down $300,000, $1,000,000 and more on homes seems very reasonable. House will always be there as long as the mortgage is paid and the taxes are complied, of course. That leads us to a good conclusion for thinking the real estate market will slow down and most likely have a downturn.

The reason there is a valid argument for the opinion that the real estate sector will have a gradual downturn is because some homeowners, maybe quite an amount of homeowners, won’t be able to sustain with their mortgage mortgage payments if they start losing their incomes and the market slows down. The rise in fuel prices could have a dominant effect on the economy and when these people start defaulting on their mortgages then this could turn the sector adversely.

Numerous home owners and speculative property investors are employing what certain people would call risky property mortgages, that interest-only and no-income quallification mortgages. Such schemes afford more investors to invest in more properties and are are contributing to the factors the real estate business has enjoyed such a spike last couple of years. Creative money supply originated a long time ago and has up the ante in more and more different offerings for the home buyer and speculator to achieve what they want. This is a good thing as a whole in my opinion. Even though I can sense the risks of this situation also. I don’t think a blow-up is inevitable but it is certainly very possible. Maybe more likely, unless a significant event such as another war or terrorist attack, is a slow down and evening off the growth of the property market.

There are those arguing for the unavoidable downturn perspective, who are preparing for for the worst. Just as some players can make profits on the stock market even when it goes down, there are speculators who are preparing for a likely – inevitable in their minds – downturn in the property market.

Here is one such method to exploit on a property bubble blow-up or at least a downturn: pre- foreclosure deals. There are some investment clubs that are founded entirely on waiting for this to happen and then investing into this industry. People will be foreclosing in record numbers in case this downturn comes. Maybe it is more appropriate to say when, because as history demonstrates there are always downturns in the industry; and with all the creative financing, no interest loans and no income verification loans the chances of a downturn is real. Still, this is not a "burst."

So here is what can take place:

1. The industry will keep going the direction it has the last few years, which is up, up and up. Briskly in some spots. Not likely.

2. The industry will soften and even off soon. Very possible.

3. The business will have a slight downturn and a great many will lose their homes and another great many will benefit from this. Very possible.

4. The industry will "blow up" the "bubble" and there will be a huge meltdown in the sector. Possible, but not as likely as 2 and 3.

Regardless what turns out, there will be investors who are ready for it.