The Ground Is Getting Soft Under Housing

Even the Fed cut may not be enough to put housing on its feet

Over the past few years, the next best thing to holding shares in an Internet highflier was owning a home in one of the nation's hot real estate markets. In Silicon Valley, tales abound of Internet tycoons offering homeowners $1 million in cash. In Chicago, developers like David W. "Buzz" Ruttenberg, president of Belgravia Group Ltd., recall seeing 70-year-old grandparents buying high-rise condo units under construction--only to flip them for a quick profit. And in Austin, Tex., agent Sandy Goodwin surprised even herself last summer when she sold a home for $50,000 above the owners' $180,000 asking price.

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