For those who are waiting patiently (or nervously) for the coming housing boom, the consensus of an economic summit held in Chicago this week, thinks we will not have a bursting of the bubble, but a fizz…..

That was the consensus of economists gathered in Chicago this week as they viewed the likelihood that a so-called housing bubble will end in a crash. Their conclusion: It won’t.

But homeowners will no longer be able to use houses as piggybanks, cashing in on gains in appreciation periodically through low-cost refinancings. And many will be forced to hold onto a house or condominium for a long time as they wait for prices to rise.

The problem is that rising mortgage rates are putting an end to the easy money that underpinned increasing home prices, said Richard Brown, chief economist of the Federal Deposit Insurance Corp. in Washington.

“Price increases have far outstripped income growth for a long time, particularly in the last two years, but that period is coming to an end,” he said. via The Baltimore Sun

I think we will see a couple of bubble burst. Massachusetts may be ugly, Long Island has a long history of roller coaster housing prices, and some localized housing hiccups will be felt in California.

Otherwise I think you will see a few years of housing valuation increases of 3–5% matching inflation through most of the country. The coastlines may see some greater appreciation as the Baby Boomers retire and go to their birthright (so they think). If I had some dollars to invest, I would aim it at the Carolina coast, and Florida. Not the bigger cities, but the outer suburbs which will capture the over flow of the cities that rural and suburban retirees will gravitate to.

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