Is Europe's House Party Ending, Too?

After nearly a decade of exuberant growth, residential real estate prices are clearly starting to cool

The numbers speak for themselves. Home prices in the euro zone are forecast to rise only 4.9% this year—down from 7.6% in 2006, and the smallest increase since 1998, according to a recent report by Barclays Capital. In some parts of Eastern Europe, prices could decline by as much as 10%. "The markets have slowed down significantly," says Michael Ball, professor of urban and property economics at the University of Reading.

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