Hello Monika,

I have been posting here for weeks saying that the overall economic situation in the US and Europe will necessarily take its toll on the property markets here, and that this is definitely NOT the time to invest. I think that in real estate, as with the equity markets, we will need to see some kind of "capitulation" before things begin to level out again. At this point I think that if anything, the drops are accelerating. Only Germany so far seems to be holding out in the current conditions.

The equity mrkets are a good leading indicator of economic turnarounds. They actually tend to bounce back before the economic statistics show any sign of improvement. I think that when this happens, and the upswing in the markets is durable, then that might be the time to jump in again.

As things stand now, news out of the UK, the US, and Spain suggest that this real estate downturn is going to be the most severe one in decades.

I think that the inflation factor could actually prove to be a positive for owners of real estate. House prices always keep up with inflation in the long term. So we might see a 10%-15% jump in real estate just to get back to where we were in purchasing power terms before the downturn.