Tuesday, Jul 15, 2008
HPC reaches accross the pond.
International Herald Tribune: Turns out U.K. sites predicting a property crash were clairvoyant
At the height of the housing boom in the U.K., several contrarian Web sites emerged, warning that the bubble was sure to burst. But as prices continued to soar, many openly scoffed at the pessimism of forums like housepricecrash.co.uk, pricedout.org.uk and glbalhousepriccrash.com, including a 2006 article in The Independent which labeled the sites “doomsters” and “Jeremiahs.”
Two years later the “doomsters” are looking like soothsayers and the sites have turned into lively forums on the woes of the property market.
“It is not a happy feeling that we have been proved right, given the issue,” said Jonathan Davis, who serves as spokesman for housepricecrash.co.uk. “There are going to be huge numbers repossessed, unemployed, bankrupt, etc by the end of it. I do wish more had listened to u
48 Comments
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1. Prof said...
Lovely !
2. little professor said...
“It is not a happy feeling that we have been proved right, given the issue,” said Jonathan Davis
It is for me :p
Makes up for years of being told I was foolish for not 'getting on the ladder' by enslaving myself to a huge mortgage.
BTW, did you deliberately misspell the web address for the 'other site'?
3. Geoff M said...
To be fair, even a broken watch tells the right time twice a day ;) And the housing crash, while almost everyone on this site saw it as inevitable, proved remarkably elusive, needing a combined series of market failures to finally occur. I was surprised it didn't happen in 2005 or earlier, so obvious were the imbalances, but I guess with the power and attraction of such cheap leverage and vast liquidity, it must take a really significant iceberg to sink that ship. But it happened, and now the reverse is true - there is very little the authorities can do to regain control of the (newly bear) market - this crash will run and run.
4. last_days_of_disco said...
I don't think there are any "clairvoyants" on this site. The way it all seems like magic when you have allowed yourself to be sucked into the herd.
This is about simple integrity. Looking at the pig and calling it a pig. The numbers were obvious and spoke for themselves. The dot com boom was still fresh in our minds. Please this was the easiest crash to predict in history. Even the timing was bang on, the 17 year cycle of the British housing market. The picture on the front-page says it all.
That is what convinced me.
5. housebear said...
little professor said...
"BTW, did you deliberately misspell the web address for the 'other site'?"
Yes LP. Otherwise it wouldn't allow me to do the post.
Why are we not allowed to mention other like minded sites that share the same kind of thinking, as most posters on this site?
We want to spread the word, don't we?
6. Whostolemyendowment? said...
Independent article in question from 16th July 2006 (almots two years to the day as it turns out) - www.independent.co.uk/money/loans-credit/whatever-happened-to-the-demolition-of-our-housing-market-408088.html
7. fahrenheit451 said...
?"clairvoyant?"
Who are these people, you just need a head with eyes & ears (a brain helps!).
Make me think this whole subject area is being overrun by sheep "Baa Baa".
I think I'll find a cliff and "do a lemming! Squeek, Squeek" or was that a mouse?
8. paul said...
Let's have a party.
Locations, anyone? We can bring a hat for kirsty to munch on ...
9. waitingfor hpc said...
yeah party time! We should have an HPC BBQ!
10. cyril said...
It's not clairvoyance but it's kinda spooky how this new age of conciousness was foretold in the Mayan calander.
11. paul said...
cyril, the Mayans were god-fearing sun-worshipping barbarians, not enlightened scientists.
PARTY! PARTY! PARTY!
12. Tokyocalling said...
HPC are sensible people making sensible assumption that the market will behave sensibly to a certain extent. And that’s why HPC got it wrong in 2005. As Sir Isaac Newton was once famously quoted saying while referring to the South Sea Bubble - “I can’t not calculate the madness of people.” Well, if Newton cannot, neither do we.
13. Whostolemyendowment said...
Back in 2004 I could see that house prices could not keep going up exponentially - otherwise were we all to live in £1million houses....but no one able to buy in at the lower level to keep the whole pyramid scheme running.....
I knew it would take one local event (in the actual case USA sub-prime and the so called 'credit crunch' and toxic investments) to cause global problems.
I sold up in 2005.......and am presently renting.
14. inbreda said...
There was a plan years ago to meet at the BoE I think, if HPC (sorry, did I say "if"? Of course I meant "when") eventually happened. I don't even live in england, but i would make the effort to pitch up. Someone actually put figures on it to qualify what defined as a crash, but I don't remember what it was.
15. nooneo said...
9. @ cyril said...
Now don't you start.... My tea leaves predicted a HPC way back in 2001 but do you hear me banging on about it?
16. Still-waiting said...
I suppose it's time for me to start a site called House Price Boom dot com and keep banging on about house prices going up, until after about 6 years I'm finally declared a soothsayer.
17. Dave said...
Hi
If houses fall a few percentage points is classed as a crassh!!!!!!!!
This website like the others is full of BULL!
Now the so called 'crash' has happened will HPC explain to everyone how it of benefit to FTB?? It seems to me they can't borrow any money, so the price of a house has become irrelevant!
The idiots who created this site wouldyou explain how your so called 'crash' helps anyone?
Dave
18. Safe As A Crash said...
2. little professor said...
exactly my thoughts as well, I was always told, you have to get on the ladder... please promise me you will get on... I saw this coming about 2 to 3 years ago...
ha-ha
ha !
dont feel sorry for greedy people at all...
19. magnifico said...
Jeremiahs! Ha Ha! I like it!
Idea for the party: let's turn up dressed in sack cloth.
Where would be a party be organised? On the main forum? I like the idea specially if I could get to meet other regular bloggers.
20. Safe As A Crash said...
when the snow hits the fan....
its gonna get fluffy all over...
21. str 2007 said...
Yeah, I'd be up for a party.
Bet there aren't many chicks though !
22. denzil said...
Stating a HPC was stating the obvious and nothing at all to be a clairvoyant. I'm staggered at the ignorance and stupidity of people who thought house price rises would continue for ever.
23. nooneo said...
14. @ str 2007...
"Bet there aren't many chicks though !" probably not with our level of political correctness. Anyway I'm from essex we call 'em birds mate, cos of the noise.
24. beartil2010 said...
sound like a flock of seagulls?
25. Dave said...
Why don't you post my comments.
Is it because I think you are full of BULL???????
dave
26. japanese uncle said...
To be honest I was expecting HPC circa 2003-4. But all the more for this late timing, its scale should be much greater, leaving a lot chances to buy houses at incredibly cheap prices when overshot.
27. Speewah said...
Clairvoyants? Hilarious, this has been entirely predictable to anyone who cared to think about it. Even now, these people insist the "doomsters" were wrong, simply because a lot of them called the crash early, which is a basic misunderstanding of asset bubbles - it's impossible to predict how long they can run for or when they'll eventually burst. In any case it's better to be early than late, good luck trying to sell your property(s) now.
The simple fact is people got themselves into huge amounts of debt with no apparent regard for the downsides, and without doing any research whatsoever. Maybe they should have been listening to the people who've been banging on about a crash, rather than just coming up with silly names for them.
28. growler said...
@17
"Wishing" being most apt there. Ooops. I've dated myself.
I'm up for a party - and I'll be "wishing" too. What an internet meet that would be... one for the press...
29. shipbuilder said...
Quite a few people on here called the top of the market in 2005, when there was a brief slowdown. It's widely acknowledged now that if the BofE has raised rates or kept them steady then, we could have avoided a lot of pain. In a sense we got it right.
30. nooneo said...
18. @ japanese uncle
Yes i was expecting it then also, but I guess these things really aren't predictable. I've been listening to all my friends telling me to "self certify" and "get on the ladder" - One guy I did everything to try and get him not to over extend and buy at the top of the market in summer 2007 - He used to live in London, work in soho, him and his misuus, well stubborn aint the word, they now have begged, borrowed and stolen to get themselves "on the ladder". They now have to get up at silly o'clock and drag their sorry asses into london on the train (they bought in sevenoaks , kent). I know they are already losing money and are in negative equity. What's even worse is this guy got stung in the 80s/90s crash and still he wouldn't listen.
Deary me, if only he had come to www.housepricecrash.co.uk he might have known better. Wonder how many people are now finding the site to find out how far this shambles of a market will fall! Remember people don't buy anyting until you can see the whites of Japanese uncles eyes (he knows how low it could go - the sage)
31. monty032 said...
Yes, high time for a party while the weather is good. Even the most rabid VI would have difficulty putting a positive spin on that chart of year-on-year percentage house price changes we saw this morning. I suppose it will have to be in central London though. (I live in Durham.) We can print out charts like that as a backdrop for the cameras, and all wear little name badges with our user names.
32. iguana said...
Me and Mrs Iguana would be happy to party with like minded sensible people, but we are not sure that Mayans were good partygoers. Gives rise to another problem, if we set a date will it be distorted by Elliot waves, and is Kondratiev a good host? As lizard people, will we be expected to invite an Icke........ so unless the aliens abduct me again we will buy our sensibly priced (knockdown cheap) little house in the SW and blog the name of the local pub and see who turns up.
33. Yerhavingalaugh said...
nooneo@21 "they bought in Sevenoaks, Kent" Sevenoaks is in complete denial still - trust me I live there. It will be the last place that the penny drops probably but it will drop, big time.
34. Tara747 said...
"Yeah, I'd be up for a party. Bet there aren't many chicks though !"
Oi! I'm more financially astute than any man I know! ;)
35. japanese uncle said...
nooneo
Indeed. Anyway I remember semi-detached houses in Seven Oaks would cost just around 100K in 1997. Getting back to square one in five years maybe.
36. last_days_of_disco said...
I want to see s2r's tinfoil hat!
37. su said...
I remember a party being discussed several months ago. I think the expectation was to meet in London as some suitable landmark. It would be nice to have a party in Scotland as well though.
38. techieman said...
There are some people that are less than charitable in their comments. I really am saddened that we take are all so emotive when it comes to this stuff. I assume because for most people the continuation of a bubble is needed as its all they have for their retirement and i suppose the other side of the coin is its for people to at last "nest" and have been priced out for so long.
Really we are missing the target we shouldnt have to use homes as barganing chitties but we should be able to rely on our pensions to support us in old age rather than spending lives on the "ladder" trading up until we retire then trading down. Its a systemic problem - thats often overlooked by the yah boo sucks brigade (and we should admit to our guilt in that regard too). They have too much of a VI in the perpetual bull and "we" in the emergence of the bear, to really concentrate on what i believe should be a more important issue of using the resources of this country more productively. I hope (and i say this with a heavy heart) that once the dust settles we take issue with this whole housing boom / bust situation.
39. Friend_of_the_stars said...
@27 wise words, techieman. we really shouldn't wallow in others misfortune. OK so the VI's made a tidy sum, Krusty & Phil sickened most of us to the very pit of our stomachs, but lets not forget that thousands of people (sheeple, if you will) are going to suffer needless anxiety over the coming years as a result of our government's ineptitude, and our society's inherent selfishness (take a bow Maggie). Buy a cheap house and look after yourselves as best you can, but a party could be considered a tad insensitive. Don't lower yourselves to the same level as the Daily Express. Move on from this and try to prevent such idiocy happening when my 4-year old needs somewhere to live.
(ps - Thanks for the insights, i've been an avid reader since I pulled out of buying my first place in August 2007, and I've learnt a lot. My dead money lives to fight another day)
40. Luckyjim said...
House Prices Are Going to Rise. They are going to go up up up.
When house prices do start to rise you are all going to say "wow - luckyjim said they were going to rise - he must be a soothsayer". Then you will turn on the TV and watch Brazil versus Croatia in the 2014 world cup final (1-1 aet Brazil win on penalties).
They are going to rise. I'm a soothsayer I tell ya.
41. str 2007 said...
Techieman why so mournful
You of all should be partying like it's 1999. I think that's where your predicted falls take us !
42. sold 2 rent 1 said...
Party sounds good but not until the autumn.
We need to get over the core destruction phase first.
43. last_days_of_disco said...
Ok s2r but I insist on seeing the tinfoil hat. ;-)
44. techieman said...
str 2007 - i really dont are about the BTLrs and the developers if they come unstuck so what - they knew or should have known what they were doing and the risks involved. No but its the normal man in the street. Really the more i read and the more (unbelievable) denial these people demonstrate throughout the whole spectrum of society and without any real understanding, so that they keep on with "this time it will be different" and even though there has never been such a boom without a bust and this was a huge boom by any standards - they insist there will be small falls and everything will be back to "normal" (and they dont even realise what IS normal anymore because they have a jaundiced view of it). I mean they think recent history is normal, rather than history without the debt bubble.
I do think its sad that we as a society put so much emphasis on material wealth and i realise that might be an "eh? you what" moment coiming from me, but for me i just like the trading - you get used to a size you are comfortable with too , i mean if i "retired" i would still trade because i like pitting my wits against others, although it would be for pocket money amounts (sorry that sounds a bit lairy!) .
We should all be able to live in a place where the average house is affordable for the average person - without having to go through these phases of build up and destruction. Do i have the answer? Not really and to be fair i probably use these phases subconciously in effecting trades, its just i dont feel good about it ( re house prices) - never have - either on the way up or down, and thinking about it although i can trade some things and never know whose on the other side and what their postion is overall, its obvious this crash will affect our society and cause genuine hardship to lots of our fellow citizens. In that way i have my doubts that its a cause for celebration.
Of course we have had moments of fun where we here have pitted wits against the bulls and the best one by far for me was the person who labbelled contributors to this site as "dispicable" because she couldnt flog her 600k place and she "KNEW" it was worth that. Hysterical. I think i concur overall with Friend_of_the_stars who puts it very well.
No the reason i see prices going to where i think they go is just the application of rules to prices represented as squiggly lines on a piece of paper.its abstract to me - it makes no difference whether its world sugar or House prices, and really it should. Frankly it makes little difference to me whether they do or dont fall - it wont affect my lifestyle either way, but i am on the side of the bears for the very reason that the next generation shouldnt have to sell their souls to the devil just to get a 2 up 2 down.
I have added a comment to the piece as Techieman.
45. techieman said...
this is what i posted which apparently is "awaiting moderation":
Basil Bell, Peter Orlov and Ms Shaw you all sadly miss the point. Who is right and who is wrong how far up and how far down the property market is NOT the point. I understand that people that want perpetual rises do so because thats the way they perceive their pensions to be secured, by constantly increasing their exposure up the ladder, and then liquidating at the time of their pension and downsizing. Similarly the bears have a VI in wanting an affordable family home for themselves and perhaps - i might suggest - your own Children?
No the point is demonstrated by how emotive you find the subject. We should not need recourse to our property as an “investment” its a place to live. Your vitriol should be aimed at the society that uses these “rules” as a smokescreen so that long term investments are not made in the underlying economy which becomes based on Credit bubbles and fiat money.
I could argue with you as to reasons why I think this fall will be more nasty and potentially longer than you believe - but that debate is best placed on a website such as HPC.co.uk. I will finish by saving one thing (which you should ponder before bedtime) - prices of property on both the way up and the way down are determined at the margin.
46. str 2007 said...
techieman
I totally agree this could have all been stopped or at least subdued and it is very sad that people are now going to have to go through alot of hardship.
It is surprising to me though the absolute lack of understanding and denial out there - even now.
You can lead a horse to water and all that.
I guess some of the denial is down to peoples natural positive mental attitude that just picks up the good bits of confused messages from the media and politicians.
47. techieman said...
tara you need to get out more...fancy a drink?
Dave your view is just as important as the next mans - (whether a bull or a bear) no the reason you dont get "published" quickly is because thats the way the site works. apply for an admin sign on password and your comments will appear straight away.
Cmon dave I thought all the bulls had gone! - What a relief.
48. str 2007 said...
Tara747
Glad to know there's a few of you out there. Seeing as you've got all the cash you can buy me a drink at the party ;-)
Dave
See techiemans comment re: getting an account - then you can shout an argue with us in real time.
While you're doing that, the reason a crash is good is the fact you'll have to borrow less money and have more to spend on other things you enjoy over the life time of your mortgage.
Clearly if you don't have a deposit it will be tough. But to be honest it's really only been in the last few years you've been able to buy without a deposit (which is what has made house prices go up) so you haven't gained.
If you can't save a deposit then to be honest as soon as you get a house you'll get into trouble because you do get alot of bills - which have to be paid.
The good news is house prices will be falling for at least 18 months so that gives you a bit of time to get a deposit together.
By which time houses will be approximately 25% less than they are now and flats will be approximately 50% less than they were.