The reason why America came first was that it was home made to a much higher extent than in other cases. Alan Greenspan made interest rates go through a roller coaster ride, being first pushed down from 6.5% to 1% and then raised back to 5.25%. During the period of super low interest rates many subprime borrowers were hooked by Greenspan's teaser rate, only to see their personal finances in disarray when interest rates were raised back to more sustainable levels. Also, many near prime and prime borrowers were able to use their homes as ATM's when interest rates were low and house prices rising, something which they are unable to do so now.
In no country has interest rates been reduced and raised in such a dramatic way as in America, which is why it has been hit first. Still, there are other markets where house markets look highly overvalued.
One example of this is certainly Australia, where house prices have increased again after a brief slowdown in 2005. As I've stated before, Australia would likely have fallen into a recession in 2005 if it hadn't been for the commodity price boom. If America's likely recession directly and indirectly causes a significant slowdown in growth in China, this will end the commodity price boom. And with imbalances in Australia being if anything worse than in 2005, then an end to the commodity price boom will certainly mean an end to the housing bubble in Australia. And an end to both the commodity price boom and housing bubble in Australia will certainly mean an Australian recession.
Also, a number of European countries have housing markets look overvalued. This includes among others Britain, Ireland, Spain, Sweden, Denmark and the Baltic states.
Of particular interest is perhaps Britain. Two factors which have driven the housing boom there now look like they are disappearing. First, global financial turmoil will likely reduce or even end the bonuses in London's all-important financial City-district. That will take a heavy toll on the high end housing market in the greater London area. Second, the net inflow of immigrants from Eastern Europe are already starting to decline and will likely continue to decline more dramatically soon, perhaps even ending or even reversing, as economic growth in Eastern Europe is a lot higher than in Britain and as the decline in births in the early 1990s in Eastern Europe will soon translate into declines in the working age population.
Spain's housing market is already showing signs of cooling and could halt even further if there are more ECB rate hikes. This factor could also damage other overheated housing markets whose interest rates are determined by the ECB -either because they are part of the euro are or have pegged their currencies to the euro-, such as Ireland, Denmark and the Baltic states.
Sweden's housing bubble will on the other hand probably get worse next year as a result of the housing tax reform, so I don't expect any downturn in the Swedish house market until 2009 at earliest.