Huge falls in US property prices bring little hope for end to credit malaise

Huge falls in US property prices bring little hope for end to credit malaise

Las Vegas down 22.8 per cent; Miami down 21.7 percent; Boston down 4.6 per cent. The latest Case-Shiller Index, the principal measure of the health of the American real estate market, tells its own sorry tale. Just as unbridled confidence once created a feverish psychology dictating that property prices could only ever go up, now it seems US home buyers are frightened that if they venture into the market for a bargain, they will be merely catching a falling knife. Why buy now, they ask, when prices in six months or a year will be even lower – and that is if they can find a mortgage. This deflationary mindset goes some way to explaining the malaise in the US sub-prime and the wider "prime" property market, and, thus, the continuing global credit crisis.