In the UK prices have been dropping recently.
U.K. house prices fall 1.8% in Julyhttp://www.marketwatch.com/news/story/brit...B4-16B3B01193C4
LONDON (MarketWatch) -- British house prices fell 1.8% in July, with new sellers dropping asking prices aggressively as they entered an already-crowded market, according to data released by Rightmove, a U.K. property web site Monday.
Sellers dropped the average asking price by 4,345 pounds ($8,675) from June to an average of 235,219 pounds, marking the largest decline ever recorded in July, Rightmove said. New sellers dropped their asking prices 2% below the same month last year, marking the first year-on-year fall for July.
"Sellers are finally recognizing that they need to undercut their rivals from the outset, rather than testing the market and dropping prices later, said Miles Shipside, Rightmove commercial director, in a news release.
Meanwhile, the survey found that inventories of unsold houses continue to build, despite the number of new sellers falling by around 20% from 2007 levels, Rightmove said.
On the plus side, the lack of a flood of new sellers should help limit the rise in inventories, unlike the United States, which has seen heavy building activity and forced sales flood the market, Rightmove said.
Falling U.S. home prices "are being driven by rising levels of unemployment and the 'payment shock' of fixed-rate mortgages resetting to unaffordable interest rates," Shipside said. "Both of these factors are affecting the U.K. market, but so far, not to the same extent. Therefore we do not expect to see falls as large as the worst hit areas of the U.S."