The housing market started the year 2008 badly, but the worse is still to come. Housing prices are down from July to September for the second time during this period, according to the National Statistics Institute (INE). Resale houses and flats are down by 8.6% and dragged the whole market to an average of 3% decline. New construction is still increasing by 3.7%. on average for the whole country, propped up by people who paid deposits in 2006 and completed a year later.
Promoters say that prices have fallen between 15% and 20% in the last twelve months, although in coastal areas demand for second homes has increased amongst Spanish buyers.  At this point in 2009, all indicators are that the market is still falling, An El Pais article published today, indicates from their analysis that figures from the INE show that prices in the major cities fell by 30%, but 42% along the Mediterranean costal communities.  All indicaters show that the market is still falling with the resale market being the hardest hit. 
The pace of construction has also reduced. Given the slowdown in demand, building companies are not starting or delaying new developments. In the last twelve months the promoters say that builders have started 40% fewer houses than in the previous year. But they are still finalizing completing sites stated in 2007.  In the third quarter, according to the Ministry of Housing, 152,262 dwellings were completed, a 2% increase over the same period of 2006, bringing the inventory of unsold homes to at least 700,000.
The third factor that indicates that the property will be cheaper is the rapid deterioration of the price of land, the price of which is calculated in part by an estimate of what someone might be willing to pay for housing built on it. According to recent data from the Ministry of Housing, the land has been devalued to 2005 levels, and as with the housing market, transactions continue to fall.
With this background, the only asset that appears to coming to the real estate sector rescue is the lowering of the Euribor, which closed the month at 3.4%, and has since fallen below 3%. This gives space to the families who have mortgages and promoters who are stifled by debt. However, financial sources said that although this decline benefits and those who holds your loan, it does not free up the market for new loans. "Financial institutions are increasing in general the average spread on the Euribor, but keep any promotion for the first two years," said the sources told the El Pais.
The national fall of 3% per annum, and 1.7% over the second quarter, hide more abrupt declines in some regions. Catalonia leads to a fall, with properties an average of 8.3% cheaper. Followed by Madrid (-7%), the Basque Country (-6.3%) and Navarra (-5.3%). Prices also caved in Aragon, Asturias, the Balearic Islands, Cantabria, La Rioja and Ceuta. In the rest rose less than 3%, this in real terms (net of inflation) implies that all values have remained fairly stable.
Pedro Perez blamed the drop in Catalonia and Madrid to prices that rose "sharply"  during the boom years. Both communities inter annual price increases above 20% during that time. At the other extreme are Extremadura and Galicia, where prices are still stable.
The other explanation is that Perez gave the stock of unsold, forcing many owners to "make a greater effort to close a transaction." This is forcing the developers or owner of property to reduce. Garcia-Montalvo said that Catalonia is the second largest community for unsold homes and the least Extremadura, indicating the areas where the greatest and lowest price reductions can be expected.