A year ago, in August 2005, Alan Greenspan, the then US central Banker, warned if American home buyers continued to drive property prices higher, they would risk a crash. He believed that the existing house price had created an economic imbalance. Although the comments had an immediate impact on the Wall Street with a significant fall in share prices, sales in the American housing market hit a fifth consecutive record in 2005.

The trend persisted until the end of the summer of 2006 but as the fall approached signs of a downturn became apparent and Greenspan's apprehensions began to materialize. Suddenly home sellers found it hard to sell their homes and their "For Sale" signs needed to be in place for even months in some cases , which they had never anticipated. Gone were the familiar scenes of buyers running after sellers. Instead it was the seller who started running after the buyer trying to woo them through cutting their asking prices.

Buyers making feverish bidding leading to the forecast of an annual 30% increase or more in house prices is now history. According to some analysts U.S. home-price growth is now seeing the sharpest slowdown in three decades.

Not that less attractive places in the country are the ones to experience the slump; the impact is being felt more or less everywhere, even in Las Vegas, where some areas registered a fall in the house prices by about 5% in September this year. Some buyers even got the asking prices reduced three or four times before signing a deal, the housing market in America thus virtually becoming a buyer's market.

The National Association of Realtors (NAR), USA, has reported the biggest drop in home prices since the trade group began compiling price data in 1968. According to the association, the median price for home sales completed in September was $220,000, down 2.2% from a year earlier. Some analysts predict that the housing price will continue to fall for the next six months or even for a year, and the fall may be as bad as 10% or more. However, confident real estate agents rule out a double-digit price fall.

There is no doubt that the housing industry, which contributed about $2 trillion to the U.S. economy last year, is very important to U.S. economy. The fall in the price may be attributed to over supply in the market, over inflated price and incorrect speculations. There is also a belief that all the talk in the media strongly influenced the buyer's purchasing decision. Buyers have now become cautious and to some extent shaky. Some are even waiting for a further tumble.