Saturday, March 8, 2008
Crash 20% In 2 Years
Home prices fell 9 percent in the fourth quarter from a year earlier, the biggest decline in 20 years of record-keeping (S&P/Case-Shiller home-price index). Lehman Brothers forecast prices will decline another 10 percent. Prices are more overvalued in the UK then at the height of its housing bubble in US, implying the UK crash will be much bigger - expect a real terms fall of 40% or more on existing prices, with much bigger falls in London and the South. Cities such as Leed, Birmingham, Manchester and Leciester have already experienced falls of 20% for city centre flats. This is just the beginning of the crash. House prices could fall more then 50% in central London.