Have a look at the video (there is a motor bike ad first) shocking stuff

Click here - Housing prices to free fall in 2008 - Merrill

From the video - in 1 street, 8 mansions repossessed. 3000 square foot mansions were selling for over $700K. Now you can buy one for $400K That's only £200K for a mansion.

And the printed article is predicting more falls this year and next

Remember: in the UK, we have lower average incomes than Americans, we have higer house prices than Americans and we have more personal debt than Americans.

We are so fecked when (not if) this happens here.



Thanks to submedia, for posting this article on the website front page.

That's crazy, I see on that report that they expect prices to fall another 25% over the next 2 years and maybe more after 2010.

That could bring prices down to £150k or less

You have found a report from CNN Money that worries me slightly. Admittedly USofA is in a fix and the government seems to be printing money like there no tomorrow but the VI interest of Lawrence Yun has a point

" Merrill Lynch's figures are way too pessimistic, and they are unprecedented," Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. "There is so much variation in local housing markets."

Michigan is one of the worst states in America and I can bet my bottom dollar this report is from Detroit, where houses cost as little as $6500 in some area's, with sitting tenants. America is such a huge continent, it is impossible to compare different states due to local taxes etc. For instance rates in some areas of Florida are 15,000USD per year whilst Nevada is virtually tax free. Trying to compare the various states along with Michigan is IMO misguided reporting.

In Europe, I have apartments in Germany costing £25,000 [very good condition and area] each with sitting tenants with cold rents achieving 8% per year, this is different to Paris, London, Dublin and Belfast. Each have their own prevailing factors so what happens in property here, has no bearing on Germany and vice versa. As an illustration to continue the point, Ireland & UK are fixated with property whilst in Germany it's the opposite but up to 10 years ago many here rented televisions and video's, in Germany by comparison this was considered mad behaviour. So in essence each country has its own psyche and in America each state is viewed as a country - Texas bears no resemblence to Massachusetts.

Overall in the States in 2007 HPG was -5.3% overall per house completion statistics, for a clear view of each states click here.

It's a 2007 report though. Finally what is Merrill Lynch on about; its pot calling the kettle black. It’s one responsible for half the mess with over 44,000million USD of credit derivatives tied in the market. Not all area's have been affected and a noteable investment consideration is Chicago, now favourite host city for the 2016 Olympics. I may be tempted in 2009 to buy in but I have a very clever hedge to protect against eventualities.

I really do not mean to rain on any parade but this piece by CNN is dangerous and one sided reporting. Ted Turners network reportage of the IRAQ debacle was equally questionable?

For once - I hope you are right.

However, there is a development near me. All large detached houses. The first phase of 24 houses sold very quickly, about 3 years ago. I was looking to buy a house in the area so have been keeping an eye on it. I drive home past it every day and have driven in around it at various times of the evening. There are currently 6 for sale and a further 6 appear to be sitting empty. Never see any cars or lights on.

At the beginning of last year the second phase of 24 houses were completed. All of them are sitting empty. There are several other develements in the town, due to complete this year. Who is going to buy these houses?

I know each state can be considered similar to seperate countries over here. I have read several reports comparing California and the UK during the 1990 house price crash. And this time, areas like Texas are not likely to be effected as they have no housing bubble.

Still, I'm watching America to see what is likely to happen to our housing bubble.

More news from America - San Diego, Sothern California.

14.4 percent lower than in January 2007

We are still 12-18 months behind America in the economic cycle. We have lower average wages and higher average house prices than America. So our credit/housing bubble is much bigger.

Distressed properties dominate market

... coming to a province near you soon!

But won't Northern Ireland be different? We are very special people and economic cycles will not effect us at all.

WRONG WRONG AND WRONG -Please can you report in a realistic way, rather than skewing a statistic and trying to fit this to Northern Ireland?

Firstly you report data from Detroit, now San Deigo?? Please report on the national figures from the National Association of Realtors or the Shiller index. I have relatives in SDiego and SFran. Your report is totally mis-presentative of USA as a whole, now there's a first.

Snippet from the Associated American press. {Statistics from NAR re San Diego Metropolitan Area only}

San Diego has experienced dramatic growth of real estate prices in the last decade, to the extent that the current situation is sometimes described as a "housing affordability crisis". San Diego metropolitan area has second worst median multiple (ratio of median house price to median household income) of all metropolitan areas in the United States. In May 2007, a median house in San Diego cost $612,370

A computer technican in the San Diego metro, earns from $23,800 to $41,800 after 20 years experience [payscale.com]. Notice the AAP talk about household income, the norm in reporting against HPG...

Please can you keep it relevant. To compare different States is like comparing apples to oranges, due to local taxation laws and other intra-dependent factors. But comparing one country to another is impossible, theoretical or otherwise. Examine away at the America HPC [on a national basis please], but IMO do not try to correlate...

Not my report dude I did not write the report. I just think people should be aware of what is happening in America. Thought I find it interesting that you immediately rubbish the report. What are you afraid of?

... and as you said earlier...

Thanks BB. I work in an industry with so much spin it is unbelieveably frustrating. The report may not be rubbish but the context is...

Just trying to keep things unbiased.

the report appears to be discussing national numbers as a whole, and while there is variation in the degree of boom bust, they all are following similar patterns.

cities like san francisco and miami tend to have much higher booms and much lower busts, but it's more ingrained into the populace that that can happen.

MOST of america hasnt had a housing bust since 1930, so it's a lot more devastating psychologically.

those crappy rustbelt michigan cities have been wastelands for years, I'm sure they aren't making national projections on them, that would be like pricing london based on some out of the way ex-manufacturing small town in wales.