The American sub-prime mortgage crisis that started in the trailer parks of the poorer parts of the country is starting to spread to the middle classes. Property prices are plunging and repossessions are on the rise. According to the National Association of Realtors (Nar), America’s largest trade body, sales slipped 2.2% in December and 22% against the same period in 2006. And last month the Case-Schiller house price index revealed prices in December fell by 8.1% year on year, with an overall 8.5% decline in 2007. So even with the weak dollar, as America faces a downturn, is it a good time to buy?

Yes, according to Sean Conlon (www.conlonandco.ie), an Irishman who runs a billion-dollar property empire in Chicago. “The current downturn and repricing going on in the American economy is providing potentially the biggest real-estate buying opportunity I have seen in 20 years,” he told a conference in January. “It is the perfect storm.”

Where the investors are heading

Chicago: Building is already underway on the Spire, set to be the tallest residential skyscraper in the world. The 150-storey tower will rise 7,000ft over Lake Michigan and its iconic status and prime prices — starting at £385,000 and going up to £20m for its penthouse — mean that Shelbourne Development, the Dublin-based developers behind the project, believe prices will stay up.

“Not only is Chicago the birthplace of the skyscraper, it is the fourth-largest economy in the world,” says Dominic Grace, head of new homes at Savills, which is marketing the Spire (Savills; 020 7409 9998, www.thechicagospire.com). Elsewhere, building is underway at the Trump Tower on the Near North Side, which will feature a £4m penthouse. Prices for XO Condominiums will start at £110,000 for a one-bedder rising to £1m for a three-bed penthouse, through Winkworth (020 7691 4269, www.winkworth.co.uk).

Las Vegas: The home of gambling has suffered a glut of apartments and condos in recent years, but local real estate analysts predict that there are six more years of developable land available. This limited supply and plans for five new large casinos will create high demand in sales and rentals. Prices at Sullivan Square, a mixed-use project that includes 1,300 residential units, start at £171,000 for a studio up to £907,000 for a three-bed penthouse with balcony (Future Properties; 020 3031 2860, www.futureproperties.com).

New York: “The Manhattan market operates almost independently of the rest of the country,” says Charles Peerless, director of Winkworth International. “Values in the heart of New York have risen more than 30% in the past year. Prices are comparable with London but at dollar-for-pound levels, UK buyers have a distinct currency advantage.” Prices for one-bed flats at The Rushmore, near the Hudson River, start at £487,000 and rise to £3.5m for the top penthouses (www.therushmoreriverside.com ).

Florida: Back in November, Lawrence Yun, chief economist of the Nar, called Florida “ground zero for the housing market slump”. It is the market for “bottom feeders”; many of the foreclosed properties are being snapped up by British buyers. “Florida is developing into a buyer’s market for UK property investors,” says Virginia Cowie, managing director of British Homes Group (0800 051 8893, www.britishhomesgroup.com).

The GO-Zone: The gulf coast states of Alabama, Louisiana and Mississippi, were devastated by Hurricanes Katrina and Rita in 2005. More than 90,000sq m of property and more than 60,000 homes were affected. The region is now called the Gulf Opportunity Zone, or GO-Zone, and a government act to regenerate the area has financial incentives for overseas investors. Until the end of this year, 50% of the cost of property construction is deducted from the first year’s tax liability.

“The level of public and private business expansion is fantastic for the long-term development of Biloxi in Mississippi and the surrounding areas,” says Danny Silver, managing director of Property Direct America, which is selling homes starting at £68,000. “Ironically it has put a further strain on the local property market, with the need for homes to rent soaring. We have properties made from steel frame — within six months from signing an investor can take possession, let it out and begin turning a profit.” Brad Pitt was one of the first celebrities to show solidarity, investing £2.5m and building eco-friendly homes. This is not your normal holiday-home investment. The government may be appealing to the big-hearted, but buying is not for the faint-hearted.

America is not a market for the novice and, as with any financial investment, it is important to do your homework over the short, mid and long-term and seek independent specialist legal, financial and tax-planning advice.

On the market

Chicago, £115,000 to £259,000

On the shores of Lake Michigan, 1400 Lakeshire Drive, a 1920s apartment block on the golden mile is being updated and refurbished. The 22-storey building will have 391 flats, from one-bedders to large three-bed penthouses. All have use of concierge and roof-top sundeck

Agent: Global Residential Sales; 0870 211 3033, www.globalresidentialsales.com

They say: Property prices will rise 25% in the next three years

We say: Market may look fair in the windy city now, but could turn rough

Biloxi, Mississippi, £68,000

Three-bedroon steel-frame detachedd house with eco-friendly features

Agent: Property Direct America; 020 7043 0792, www.propertydirectamerica.com

They say: Ready to let and begin turning a profit in six months

We say: Not a holiday home: re-sale market is a complete unknown

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