Housing Prices May Crash - Part 3
South East Homes
The average home for most of the UK is 196,000 at the moment. However in the South East homes have been selling for 400,000 pounds. If the projections are correct they stand to lose a significant amount of value in their homes. In fact these 400,000 pound homes could be worth 280,000 pounds with a crash. In the South East homes began at 96,000 pounds in 1996, and have steadily risen over the ten year period.
In other areas of the problem the IMF World Economic Outlook has found a housing gap price. This means that the price of the home and the economic aspects of that area have a severe difference. The salaries, interest rates, and population growth have all affected this gap the IMF has found.
IMF reported in their study that the housing prices may fall 10 percent rather than 30, as they feel the prices are only the ten percent too high. Whether the prices are 10 or 30 percent too high this drop being projected could affect the entire economy of the UK or at least those areas most affected. Part of the drop in prices will depend on where you live.