USA led the way to over-inflated house prices, now they lead the way down to human prices and the road is going to be long and painful.

As usual, the developing countries will suffer the most as people will dump first holiday houses. Egypt, Cape Verde, Morocco, Turkey and many other will be hit hard.

The period of easy house investment based on flipping and easy money is over. Now only hard nosed investor will prevail and many amateur flippers will get the lesson of their lives after they will lose lots and lots of money.

Gosh...haven't you said this before a million times?

For people like you it was not enough.

The US property market has for the last 5 years been driven by pure speculation, diven by amature flipper having lots of access to artificialy cheap money and little access to good ole common sense. Florida is not the worst area but the market there has fallen off a cliff. EG. in 2004 New Villas and Condos sold off plan and resales sold within a week. Now on all developments and sub divisions many properties remain unsold have been on the market for up to 12 months (and reduced in price up to 4 times). Two year old 5 bed detached villas that were being bought in Sept 2005 for $320k are now asking $270k and arn't selling. So far we have only seen the frofth of the froth of the froth blow off the top. The speculators have stoped buying but can't sell and still they build = 10 months of unsold inventory and rising. With $130 billion of 'junk' quality low initial interest rate mortgages due to be reset at much higher variable rates, distressed vendors will hit the market in their 100's of 1000's. Some properties in some US markets will be 'unsellable' even at 50% off peak (Oct 2005) prices, for the next few years.

All the yanks and brits paying $400k+ for unbuilt condos in the Dominican Republic must be crazy. Ireland, Australia, Spain, Bulgaria, and all 'new' middle eastern fly to buy markets are going to follow the US. IMHO anyone who dosn't see this is underway is a naive fool.

Pablo Silver or Lead?

The only question is when will they follow... I guess only Alan Greenspan, Gordon Brown, Zapatero and other con artists have the answer to that...