Tuesday, Mar 25, 2008
Sobering stuff from Rightmove
Firstrung: UK house prices rise by 0.8% (£1,799) as new sellers ignore market reality - Rightmove
Despite the fact that asking prices are up, Miles Shipside at RM makes some very good points in relation to seller expectations. However, where is the market gridlock so many expected to emerge by now? The time on market is actually reducing
Posted by converted lurker @ 12:42 PM (460 views) Add Comment
5 Comments
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1. Dave The Box said...
"Price increases head towards zero.... "
They're having a laugh aren't they? I thought the increases went below zero ages ago.
2. Fools said...
As a neutral, I feel there has been a fair amount of postive vibes coming out of either side of the pond since the Bear Stearns fiasco last week. Without getting in to the 'everything that is wrong with our economies' debate, and looking too long term, do the bears still feel AS confident as say a month ago that there will be a signifact correction of say 30% to house prices in UK in the next 3 years? Personally I feel the central banks involvement is proving a thorn at present. Any views?
3. mark wadsworth said...
"Deals are being put together but tend to be at around 10% below peak boom prices"
Crikey! Have prices fallen by 10% already?
4. converted lurker said...
I did expect to witness serious asking price adjustments by now, it's over 7 months since the credit crunch began. All points to a long drawn out grind IMHO. A very 'Japanese' scenario unfolding, were property may simply 'do nothing' for 20+ years?
5. quiet guy said...
@Fools
"do the bears still feel AS confident as say a month ago that there will be a signifact correction of say 30% to house prices in UK in the next 3 years? Personally I feel the central banks involvement is proving a thorn at present. Any views?"
Great question. Let's just say that from an emotional point of view, if I did see the sellers capitulate with a 30% price drop across the board visible in the high street window now, I'd be pinching myself.
From a more calculating point of view, a 30% drop in (say) two years seems quite likely but this 'victory' will come at a heavy price:
- Significant job losses
- High levels of IVA/bankruptcy
- High real world inflation eroding my savings and wage
- Very little credit available
- Drop in standard of living (in the normal material sense at least)
I do feel confident that there will be a crash but I'm also pretty sure that it will not be much fun for a lot of people, possibly including myself.
The central banks can play all the games they like but they cannot dodge the fact that we are living beyonds our means as a nation due to excessively lax credit controls in the past. Some day, we will have to pick up the bill and house prices will be affected by that.