Bugs, I bet on price declines nationwide. Cities like Kansas City, MO are already seeing high foreclosures and price declines. The auto industry states are also hurting. Cities like Omaha, NE are experiencing a record DOM and foreclosures, although prices are still flat.

Look, these exotic loans are doled out nationwide. Our negative savings rate is a national phenomenon. Folks in Lincoln, NE were just as likely to get an ARM to buy that new car as the couple in San Diego, CA. It’s only a matter of degree. The Lincoln NE family borrowed $40K on their $120K house. Interest rates are up, and they are struggling to make the payment.

By end of 2007, you will see nationwide price declines of 3-5% in all towns, and 25-35% in the bubblicious cities.

Add the recession to the mix, and you can increase the losses.

I am surprised that as an appraiser you are not more aware of the national market. I would love to hear your comments after you speak to some colleagues in other cities. How much of their business if cash-out refis? That will tell you a lot. I think you will be convinced only once you start talking to appraiser in some other states.