Recent housing market news has been dire. With the economy also poised for three years of sub-trend growth, the housing market correction is likely to run onto in 2010. We have cut our forecasts. We now believe that transactions will drop by 40% this year. Our previous forecast was for roughly a 25% decline. We also expect house prices to fall by 15% in 2008 and ultimately by 35% by the end of 2010, far more than the 20% fall we previously expected.
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