GMO, a successful American investment fund management group with a good track-record for long-term forecasts has been looking at the property markets in the USA and UK. Their conclusions are not going to cheer up house-owners in those countries, the Economist reports:
…By using the ratio of the median house price to the median family income, GMO reckons that prices in America need to fall by 17% instantly or stay flat for four years to return value. In Britain, prices need to fall by 38% or stay flat for seven years. And of course, there is no guarantee they will stay at fair value; in the mid-1990s, they dropped well below it…
