Thursday, Apr 24, 2008
Are the sheeple finally getting the message?
ThisIsMoney: Crisis halves the housing market
The housing market has halved in a year, according to a series of reports.
It emerged yesterday that house sales through estate agents are down 50% and the number of Britons taking out a mortgage has collapsed by 46%.
The National Association of Estate Agents said its firms sold an average of seven homes in March, compared to 14 last year. One firm, from Essex, said: 'Agents in the county are using comments such as "dire", "apathy" and "miserable".
'There are now clear signs of redundancies and offices closing together with a strong feeling that this market is similar to 1989 (the last crash).'
House prices are predicted to fall about 20% over the next two years.
Posted by little professor @ 08:37 AM (869 views) Add Comment
16 Comments
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1. Happy Mondays said...
Finally the penny is dropping! (not as fast as the pound though) people are beginning to wake up from the big sleep. It will resemble a night out on the tiles, getting drunk and doing stupid things, but only when you wake up and sober up, you realise the mess you have created, the people you have f##ked off, and how much change is left in your pocket......Then if your smart enough you won't repeat last night, at least for a short while!
2. hpwatcher said...
I think almost everyone - aside from Greenbay - knew this was coming.
3. talking rot said...
Those individuals who worked in Estate Agents - where will they find work now? I think I'll mailshot them all, recommending Property as a sound investment and a great way to get rich!
4. hpwatcher said...
Those individuals who worked in Estate Agents - where will they find work now?
They will have to live on their bonuses for a while....and the money they made when house prices were rising. Most of them invested in property and have big houses.......another good reason for seeing them getting screwed.
5. techieman said...
hpw - sounds a bit bitte?!?. It obviously depends on whether they anticipated the changes and transfered resources to their letting book. Live off their bonuses - yeah right.
6. renting2 said...
Bet all bonuses are spent cos house prices always go up!
(P.S. it's all hpc.co.uk's fault cos they kept talking the market down.)
7. planning4acrash said...
It has just occured to me that b[w]ankers are intent on robbing and suppressing the middle classes, whilst creating market volatility that bars many of the working class from participating in the economy coz they rely on smaller margins when in business.
8. montesquieu said...
Still lots of wishful thinking though
Market has halved (ie half as many buyers and half as much money available) but priced predicted to fall only 20%
Not in my economics class ....
9. confused76 said...
Montesquieu
It is maybe the case that there are half many buyers but also fewer sellers
outlook of no capital appreciation + difficult to get a loan ==> half the number of buyers
bigger discounts on asking price needed to sell ==> puts off a number of sellers
the balance of sellers versus buyers gets you the price decline. 20% sounds right
10. mark wadsworth said...
"Fewer sellers"? nope. Look at 'days on market' figures. Staggering. There was a nice-ish house round the cornder from me on for a ludicrous £800k, all of a sudden a 'To Let' sign' has popped up next to the 'For Sale' sign.
11. jack c said...
mark w - can u keep us updated on what your landlady has to say when she comes calling to see you this weekend (you mentioned this earlier in the week on another thread) - always good to hear real life stories alongside the newspaper articles (assuming you dont mind sharing the info)
12. Rapid Reversal said...
confused76 said...
Montesquieu
It is maybe the case that there are half many buyers but also fewer sellers
outlook of no capital appreciation + difficult to get a loan ==> half the number of buyers
bigger discounts on asking price needed to sell ==> puts off a number of sellers
the balance of sellers versus buyers gets you the price decline. 20% sounds right
Or bigger discount on asking price needed to sell==>underwater owners ==>mortgage default ==>mortgage repossesion(when banks can't give soft terms or hold off firesale)==>increses the number of sellers
the balance of sellers versus buyers gets you the price decline. 60% sounds right
13. hpwatcher said...
Live off their bonuses - yeah right.
Nice to know I can always rely on you to be corrected ;-)
Actually, I know a few who did very well out of buying and selling houses. They not only had professional, but highly personal interests in pushing the market to what it was. I would say a majority did very well in the boom years.
Feel sorry for them is you want to. I'm not.
14. montesquieu said...
confused
I do get your logic, and sellers could well disappear in the short-term (as they did last time, 89-91 or so) putting a floor under the drop for a bit. (No sign of that here though with plenty on the market and no takers at current prices, while the old couple next door who watch these things tell me at least four deals in the local area have been pulled in the last month while nothing seems to have actually sold in that time).
But people do have to sell up and move eventually (having kids/need space, job relocation, downsizing, death etc) plus the likely wave of BTL sell-offs mean supply will increase first, while the choked-off money supply continues to bite - the perfect storm I for one have been waiting on. Also not everyone selling bought during the worst of the bubble so for them they've still made a tidy sum even if they were never able to realise the vast paper profits of the peak last spring.
Actually it's my belief that the higher deposit component and lower LTVs are not wholly about banks' access to funds, but rather about them protecting themselves from the coming price crash. LTV might not increase again in a hurry but we might well see 'traditional' 95% deals again once prices have come down. That would get the market moving again but we'd only see that once prices were already on the floor.
15. mark wadsworth said...
Jack C, sure thing. I have rehearsed a few standard speeches depending on what she might say (I can only think of about 5 possibilities) but it is best not to over-rehearse as she will probably come up with proposal #6 out of the blue (and I have no idea what proposal #6 is).
16. wiltshire said...
My word of the moment - exponential. I think a lot of us had a feeling the figures this year were going to be dramatic. We are seeing history happening infront of our very eyes. I can't imagine what the next few months are going to bring because essentially the housing market in the UK is going to grind to a halt.
Additionally the debt bubble will have an impact as there has to be a huge number of repossessions and other forced sales to come through yet. Nevermind what the BTL brigade are thinking.
I'm no economic expert but a bubble is a bubble and they don't deflate, they pop.