The pain in Spain

A couple of days ago, Pigginton's San Diego Housing Blog (one of the best and funniest, btw), compared Spain's housing market to Temecula. I think that does a disservice to Temecula. Granted, Temecula has been hurting for a while, but it adjusted far more quickly than anyone expected, and realistic pricing is one of the key factors that will bring a housing market back to life. There are some smoking deals in Temecula right now if you are willing to navigate the short sale swamp.

The same cannot be said for Spain's housing market, which appears to be toastito, according to UK's Guardian:

Spain had been among the euro zone's hottest real estate markets but house prices fell for the first time in a decade between April and June as chronic overbuilding and 8-year-high mortgage rates added to the impact of the U.S. credit crunch.
"House sales have fallen on a month-on-month basis since the beginning of last year, when the indicator began, and this is just the start," said Merrill Lynch economist Daniel Antonucci.
"We expect data to continue to worsen well in to next year."
Mortgage lending also plummeted 40.6 percent in June after a 40.4 percent drop in May, as the credit crunch squeezed Spanish banks.
Strong economic growth in Spain over the last decade had been supported by surging property and construction markets, though many analysts expect the country to go into recession in the second half of the year as housing demand collapses.
"It's awful, as usual," said Stephane Deo, chief economist at UBS. "The housing market is in freefall and this is just another confirmation that this sector is in deep, deep trouble."