According to Newport Beach, Calif.-based PIMCO's Bill Gross, the party of rapid home price appreciation should come to a fizzle within the next three-to-six months.

"Make no mistake about it, the froth in the U.S. housing market is about to lose its effervescence; the bubble is about to become less bubbly," wrote Gross in his October investment outlook released last week. The question on the minds of many, whether that decline will be a soft descent or a rapid fall, is not answered by Gross, but as others have concluded, he writes that the economy could escape recession in the first scenario, albeit with an economy that loses 1% to 2% of its GDP. For exotic mortgage wielding homeowners, there could be a softened blow if the slowdown results in cuts to short-term interest rates.

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