What exactly is a "soft landing"?

[Bubble Pricker]

The "mainstream view" (although often represented by vested interests) about where the housing market is going seems to be the "soft landing".

But has anyone noticed that what this so called "soft landing" actually means keeps changing. First, it was something like a "gradual slowdown in house price growth" or a "return to a more sustainable rate of rise". The "soft landing" did not involve any falls. Prices were always supposed to continue to rise, albeit at a more "subdued rate". This was about six to four months ago.

Then, the "soft landing" changed to something like "prices will remain flat" in 2005 and then rise again at, the already mentioned, "more sustainable rate". If you were lucke, one or two commentators might mention that there could be "slight falls in isolated pockets". This was the theme from about four months ago to recently.

Now, the soft landing theory seems to have mutated into something like "prices may fall slightly over the coming period, but don't worry, now is a good time to buy, because they will pick up again soon, and if you miss the boat it's too late. There certainly will be no crash." This also seems to be the latest tune sung by Mervin King.

So to me the "soft landing" definition has changed from "no falls at all, just slower rate of increase" to "slight falls". I wonder what will be next?

If Australia, whose market seems to be about six months ahead of the UK, is anything to go by, then the next theme will be an "orderly market retreat" or "orderly correction". There are currently annual rates of falls of up to 15% in certain parts of Sydney and other areas. These have been labelled by the Australian vested interests as "orderly".

Any other views and predictions as to what the next "soft landing" theme will be?

[uk_jash]

Good point BP, I was thinking the same thing myself recently!

Before I left the UK (about 6 months ago):

'Optimists' were saying prices will carry on rising

'Pessimists' were saying the market would crash

Then about 3 months or so ago:

'Optimists' were saying prices will stabilise and remain static

'Pessimists' were saying the market would crash

Now in the last month:

'Optimists' were saying prices will fall 'a bit'

'Pessimists' were saying the market would crash

I think it's kind of like going on a rollercoaster, as you climb up, it seems to last forever, as your reach the top, it starts to level off, as your poised at the top, it looks like the track falls away slightly.....then you see the drop!

[George Mainwaring]

Perhaps we misshear these people and they are actually saying "Gradual Go Down"

Those who's interests are best served by increasing prices will always talk up the market. Even when it's falling 15% a year they will still be saying how it's a great time to buy as prices will rise next year.

Personally I think prices will gradually slow down over the next three years until they are about 30%-40% lower than today.

[Bubble Pricker]

Personally I think prices will gradually slow down over the next three years until they are about 30%-40% lower than today.

<{POST_SNAPBACK}>

I also think that is the most likely scenario, except I would not call that "gradually slow down", I would call that a "crash".

[George Mainwaring]

It's not a crash - it's sustainable growth of -10% pa

Pricess will fall until income ratio's are restored - it really doesn't matter what you call it, and euphamisms will abound. Crash, correction, sharp correction, slow down, etc - different names for the same thing.

[uk_jash]

So everyone will be able to claim they "got it right"!

[RJG18]

I wonder what will be next?

The next "Soft Landing" headlines will be the same as the Bullish headline during the last crash....

"Ok, prices having been falling at their fastest rate in recorded histrory in January-February, but we expect price rises to resume in the Spring as buyers return to snap up all the bargains, so you have better buy now before it's too late..."

....then you reach April... figures show even more falls..... and headlines will look like:

"Prices fell 4% from February to April, but experts predict rises will resume in the Summer. John Wrigglesworth, property expert, has said: 'We fully expect prices to rise in the 2nd half of the year, and should be 10% higher by 2006'..."

....then you get to the summer and prices are a further 5-10% down, and so it continues....

[Bull''s Advocate]

But has anyone noticed that what this so called "soft landing" actually means keeps changing. 

<{POST_SNAPBACK}>

Has anyone noticed that the bears' view that a crash will happen hasn't changed over the past few years, but that their view about WHEN the crash will happen and HOW LONG prices will take to drop change from day to day?

Before I left the UK (about 6 months ago):

'Optimists' were saying prices will carry on rising

'Pessimists' were saying the market would crash

<{POST_SNAPBACK}>

Erm...just a sec. Pessimists were saying this YEARS ago! According to the pessimists, prices should already have crashed by now.

Those who's interests are best served by increasing prices will always talk up the market. 

<{POST_SNAPBACK}>

Those who's interests are best served by decreasing prices will always talk down the market.

I'm sorry, but this thread aptly demonstrates the biased views we see on this forum from the bears. There are vested interests on BOTH sides. So I'm not sure what use it serves to try to make out that the bulls are the bad guys and that it is only their views that change as time goes by. The people who are extreme bulls or bears are as bad as each other. By the way...there isn't going to be a crash.

[zzg113]

the biased views we see on this forum from the bears

Duh, hello, this is a BEARS site! what did you expect???????? You want a bull viewpoint go to a bull site!

[Bull''s Advocate]

Duh, hello, this is a BEARS site! what did you expect???????? You want a bull viewpoint go to a bull site!

<{POST_SNAPBACK}>

All I'm saying is that it would be nice to see some objectivity once in a while.

[rockdoctor]

I think I am pretty objective; I bought a house at the peak of the local market (SW London) and I am fully expecting it to fall in value by 40%.

It won't do me any good at all, and I hope I am wrong, but the economic fundamentals seem just UNDENIABLE.

[uk_jash]

Obviously this is a Bearish/Pessimists forum.

But have any of you noticed how similar the posts on The Motley Fools "Property - Markets and Trends" are now?? It has become virtually indistiguishable from this one!!

I've recently started reading/contributing to both boards, and I always bear in mind that this board represents a particular point of view. What convinces me more than ever that the fall is happening is the way the MF PMT board has fallen in line with this one!

I've always had a lot of respect for the Motley Fool site, and have had a lot of good advice on other financial subjects from there.

[Bull''s Advocate]

I think I am pretty objective; I bought a house at the peak of the local market (SW London) and I am fully expecting it to fall in value by 40%.

It won't do me any good at all, and I hope I am wrong, but the economic fundamentals seem just UNDENIABLE.

<{POST_SNAPBACK}>

Well, you and Charlie seem to be in a position to give out objective viewspoints. People think that a crash will happen because they can't see how it can't happen. This does not mean that a crash will happen.

Obviously this is a Bearish/Pessimists forum.

<{POST_SNAPBACK}>

I thought this forum was here to discuss all things relating to a house price crash. I didn't realise the forum was 'owned' by the bears. I think it's just that the majority of posters are bears/FTBs/STRs - oh, and BBB has a significant share too.

Some posters seem to think that their viewpoints are also absolutely morally correct and that anyone with a contradicting viewpoint is evil, pure evil.

[zzg113]

Some posters seem to think that their viewpoints are also absolutely morally correct and that anyone with a contradicting viewpoint is evil, pure evil

Isn't this the case with everyone though? Everyone likes to think they are in the right, and hate being told otherwise. Shoot the messenger. It's not exactly specific to this forum.

[Van]

Good point BP, I was thinking the same thing myself recently!

Before I left the UK (about 6 months ago):

'Optimists' were saying prices will carry on rising

'Pessimists' were saying the market would crash

Then about 3 months or so ago:

'Optimists' were saying prices will stabilise and remain static

'Pessimists' were saying the market would crash

Now in the last month:

'Optimists' were saying prices will fall 'a bit'

'Pessimists' were saying the market would crash

<{POST_SNAPBACK}>

LOL. Then when we're near the bottom:

'Optimists' will say prices will carry on FALLING

'Pessimists' will say "Now's the time to buy"

[Bull''s Advocate]

Isn't this the case with everyone though? Everyone likes to think they are in the right, and hate being told otherwise. Shoot the messenger. It's not exactly specific to this forum.

<{POST_SNAPBACK}>

I agree that this behaviour isn't specific to this forum and I think that many people think like this in general. I do think though that some people here are humble enough to realise that they may be wrong. I include myself in this group. Some people regard this as a weakness, but I have far more respect for people that can admit they are wrong.

I don't discount the possibility of a crash. You may be right, and if you are, it would undoubtly make a lot of people here very happy if it happened.

[BBB]

I agree that this behaviour isn't specific to this forum and I think that many people think like this in general. I do think though that some people here are humble enough to realise that they may be wrong. I include myself in this group. Some people regard this as a weakness, but I have far more respect for people that can admit they are wrong.

I don't discount the possibility of a crash. You may be right, and if you are, it would undoubtly make a lot of people here very happy if it happened.

<{POST_SNAPBACK}>

i think most bulls think like this BA (that a crash is a possibility) i have said myself if the spring is a disaster i will throw the towel in (not literally btw ) now that said how many bears on here do you see with a plan B?

there's believing in yourself and there's having your head in the sand. i believe in myself, but i'm not arragant enough not to think i may be wrong. that is why my portfolio is set up as it is, and why i have a plan B. unfortunatley most people on here look upon a crash as the only way forward. plan B does not exist.

[zzg113]

most people on here look upon a crash as the only way forward.

BBB, for most people locked out of the market a crash IS the only way forward.

[Boom'n'Bust]

Sorry guys, even though I believe I'm a bear, I'm with BA & BBB on this one. One should listen to both side of arguments and not make a mockery of others views.

But I say the same for the bulls, that they should also respect bear views and that rather than slandering each other to shows facts and figures to the arguments each one of us has to present.

[chashley1806]

Obviously this is a Bearish/Pessimists forum.

But have any of you noticed how similar the posts on The Motley Fools "Property - Markets and Trends" are now??  It has become virtually indistiguishable from this one!!

I've recently started reading/contributing to both boards, and I always bear in mind that this board represents a particular point of view.  What convinces me more than ever that the fall is happening is the way the MF PMT board has fallen in line with this one!

I've always had a lot of respect for the Motley Fool site, and have had a lot of good advice on other financial subjects from there.

<{POST_SNAPBACK}>

uk_jash

Agree with you about TMF. I too contribute regularly to that board and have noticed how bearish it's become recently. With no disrespect intended to this website, I have always found the TMF site to be very balanced. Nevertheless, over the last few weeks, it would seem quite a few former bulls on TMF are now conceding the party is over!

However, I should just add that I welcome thoughts from bears and bulls alike. Whilst I may disagree with the bulls, their arguments are valid and, indeed, are essential so that I can keep testing my own theories against the views of others and the emerging empirical evidence actually out there. Therefore, I hope TMF and this website will continue to attract views from all sides so that this gripping debate (on the future direction of the housing market) can continue.

Regards

Chris