I've been reading/hearing a lot about the sharp decline in values of properties across the US. All of my information so far has been pretty limited due to my geography. Anyone trying to sell a home? Are prices really going down that much?

It'* only a matter of time until it begins to affect the Canadian home market.

I'd like some more details/experiences if you have some.

Let me just say that if you've ever wanted a mansion of your own, sell your house, take that money you made and buy a house in Michigan and still have money left over

The sub-prime market fell out. Houses are going into forclosure left and right. It'* driving the prices down hard. It'* not too far out of line either. Some of the prices people ask for houses(and even worse, the people who pay those prices), are outrageous. We're talking $500,000(litteraly) for a 900 sq/ft house that isn't even in a condition to live in. That'* out on the west coast. Rumor has it that prices of homes in California are dropping as much as 25%.

Yup, in fact, I just watched that one show where they "flip" the houses. This guy bought a 2 bedroom, 1 bath 1915 craftsman style home. It was a sorry *** dump, that needed completely remodeled. It had the old ceramic held wiring, plumbing was ancient, **** stains from animals on the floors, anything you could think of. What did he pay you ask? $515,000!!!! $515,000 here in Ohio would get you a VERY nice house.

Look at what 549,500 can get you in my area -

http://realtyone.realliving.com/Prop...PropID=7466948

I'm not a homeowner, but houses seem to be appraised here in CT and the value is always going up. Houses are just damn expensive here.

However, the house below is a 4500+ sq. ft including full basement custom built house, complete custom kitchen, top-of-the-line appliances, custom cabinets, self-closing drawers.....etc. and is actually selling cheap ($475K) for what it should be worth in CT. She'* been trying to sell it for almost a year!

So, lemme get this straight. Sub prime = mortgages granted by lenders to buyers with a less then stellar credit rating and who buy property they can't afford, and these lenders have fluctuating interest levels in conjunction with the US prime interest rate...say 6% for arguments sake?

Furthermore, once these rates go up the mortgage payment gets too high and buyers default on their mortgage?

Am I correct?

Here things are a little different, so, I need the facts so I can get a sense on the market direction here vs the US.

Nice house, but too rich for my blood. I plan on moving in about 3 or 4 years. Where I'm going, houses comparable to the one I live in cost half as much as what I paid. I expect a decent upgrade upon moving to middle of nowhere, PA.

I don't know about fluctuating mortgages, but people are very commonly buying houses they can't afford, nor do they need. Honestly.... who the hell cares if it has two sinks in four bathrooms 12 bedrooms(exagerated numbers, but you should get the point), and only two people moving in?

Pete, what would that house be worth before the subprime crash? Just for arguments sake?

my parents have been trying to sell their house for 1.5 years, that they are not living in, that needs nothing, and its not going good :(

Jim, it'* more than that. It really started in late 2005. As you know, in the late '90'* many people lost their Ashes in the stock market by betting too high on overvalued stocks and money markets. At that time many people started to look around in growing housing markets and saw that there was money to be made in buying, fixing up, and then selling undervalued properties in their neighborhoods or cities.

As more people cast about looking for better places to put their money and earn gains better than interest rates and more in line with the large 10-20% gains they had been used to in the overheated stock market, the real estate markets in many places began to heat up accordingly. Soon there were flocks of uninformed and naive people buying homes to flip them.

This worked up until 2005, when the market itself had become glutted with investors instead of real buyers. An example from down here in Florida. Some builders stopped taking pre-payments on houses they were building, since an investor could buy a house from a builder and by the time it was finished, could turn it over for a handsome $20,000-30,000 profit! No kidding!

Anyway, as interest rates started to creep up in 2005, some investors decided to stop buying new properties and dump some inventory before the market dried up. By early 2006, things started to nosedive and the market became flooded with overpriced homes that investors had highly leveraged with interest-only or ARM mortgages, with the intent to quickly sell them for profit. Often, these investors did not have the personal income to sustain these mortgages for long periods of time and the sudden increase in payments for those that had to carry them became too much, leading to foreclosures.

This was compounded by the understandable greed on the part of many mortgage companies, who started offering lots of fancy "custom" mortgage financing packages to make this business easier. There was also the group that began heavily pushing the sub-prime mortgages, which are very much like you describe. In many cases this sub-prime paper was "sold"(pushed on) to lower income 1st-time home buyers who could have qualified for more conventional fixed interest loans, but were attracted to the lower initial payments of sub-prime $$$.

Just in 2007 has the mortgage gamble begun to fall apart, making this market correction much more severe and causing problems with the economy in general. This is due to the changing eceonomy in the U.*. that is increasingly tied to real estate.

And yes, unless things settle down soon, the shock waves will begin to affect our trading partners more than they have already.

That'* the short version.... :P