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I was told the slab is like a sponge and the moisture would ruin the floor.

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See also: diy.stackexchange.com/questions/8717/… – Niall C. Sep 17 '11 at 2:05

You don't want to ever install a wood floor directly on a concrete slab (despite what your contractor might say), even using the traditional underlayment.

You have to create a buffer between the concrete and wood with something like DRIcore® or DELTA®-FL.

Though I have heard that even with systems like this, you can still run into problems if the moisture gets under the sub-floor and can't escape. Mold and rot can develop if moisture can't escape, so you'll want to make sure any moisture that gets in can always get out.

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