Article on the B.B.C.

http://news.bbc.co.uk/1/hi/business/6088630.stm

This is the first housing downturn that I have been old enough to witness so it will be fascinating to see how it pans out. One thing to be expected is for vested interests (and reading the article it would appear that BBC is one - if the U.S. isn;'t experiencing a crash, I'd like to know what it is experiencing!), will be constantly talking up the market. The reasoning given by the realtors is that the market is not crashing because sales are picking up month on month. However, this is partly due to the sales of previous months being revised downwards

http://calculatedrisk.blogspot.com/2006/10/september-new-home-sales-1075-million.html

http://bigpicture.typepad.com/comments/2006/10/house_of_pain_t.html

It seems even Alan Greenspan is getting in on the act

"Most of the negatives in housing are probably behind us," Greenspan said. "The fourth quarter should be reasonably good, certainly better than the third quarter."

http://money.cnn.com/2006/10/26/news/economy/bc.economy.greenspan.reut/?postversion=2006102615

Maybe he feels guilty for causing this bubble and subsequent collapse in the housing market with his super accommodative monetary policy, but if I were someone looking to buy a house, and prices had fallen by 10% in a year, why wouldn't I wait for another year when, if the market follows the same trend, they will be 10% cheaper again?

The 10% number may be an underestimate, as vendors will be adding incentives to try and shift homes without reducing the headline asking price - free furnishings etc.

If this situation were to happen in the U.K, then a new home currently retailing for £550000

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=398896&agentid=00360

would be retailing for £500000 in a years time (assuming the falls were uniform), so not only would you save £50k off the asking price, you would save £7000 on the stamp duty.

http://www.houseweb.co.uk/house/market/sdutycalc.html

and with interest rates soon to be 5%, the "cost" of the house will be 5% less in real terms. Including the incentives the developer would throw in, I would assume a saving of approx 80k in a year!

Of course, this won't happen in the U.K. as it is different here because.... (insert reason here - examples include low interest rates, high employment, stable economy, shortage of affordable housing)

There are lots of informative U.S. based blogs -

• Boston Bubble

http://www.bostonbubble.com/

• Interest rate round up

http://interestrateroundup.blogspot.com/

• Paper Money

http://paper-money.blogspot.com/

• Accrued interest

http://accruedint.blogspot.com/

• Calculated risk

http://calculatedrisk.blogspot.com/

• The Big Picture

http://bigpicture.typepad.com/

and our very own U.K. website

• House Price Crash (not the most neutral of site but never a dull moment!)

http://www.housepricecrash.co.uk/forum/