Sunday, Apr 19, 2009
House prices will continue to fall.
Independent: When will the housing market hit bottom?
A lot of noise is emanating from the housing market, with insiders detecting the first of those much-vaunted "green shoots of recovery" but there is still cause for concern, says Julian Knight, nearly everywhere you look the housing market figures aren't just bad – they are cataclysmic. Jonathan Davis, a certified financial planner and commentator on the housing market, who has consistently called the size of falls in the housing market correctly since 2007, says first-time buyer numbers are at an extraordinarily low ebb.
Posted by mytimeisnigh @ 02:35 PM (1150 views) Add Comment
6 Comments
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1. crunchy said...
"Independent: When will the housing market hit bottom?"
The obsession continues. How long is a length of string? The question should be, how much further could that elastic band have been
stretched before it snapped? Stupid questions from desperate people.
The people that don't like taking losses are the biggest losers of all.
The bottom will find itself in it's own good time. Mr Fibonacci are you with us, we have the glass show us the retracement? Pathetic.
2. house said...
It will hit the bottom when it is affordable by first time buyers with 25% deposit. Thereafter it will continue to drop until 10% deposit is acceptable to the lenders. Therefore, in my opinion as I have said in the past when a 2 bedroom terrace townhouse or flat which I would not touch with a barge pole equates to 4 times average salary plus a 10% deposit then the bottom has been reached ie. approx. £110000 (or less). Once this level is reached then it will stay there (past experience) for many years as the lenders will not lend recklessly.
CRUNCHY, how long is a piece of string is the question, nobody knows but 4 times avearge salary plus 25% deposit is a start. We have to get there first before anyone can say that we may have reached the bottom.
Poor old vested interest, they are showing their inadequacy of understanding how any investment market works. If one person gains then there is a loser. How fast can one pass the parcel with profit is what all about.
3. Janethor said...
Depends on where you live in the country. Terraced houses in my area can now bw bought for under 100k so we will see huge regional variations?
4. dj2000 said...
When house prices are realistic affordable to average joe then the houses will slow the decline, when I say affordable I mean an affordable monthly payment over a realistic time period which ultimately leads to the selling price to be affordable as well.
5. Mr Rigsby said...
As always the case, the house price decline will overshoot the level at which support is gained. If I can buy houses in between those 2 prices, I'll get back into business - rather bored now with all this sunshine and lazing around....
6. inbreda said...
We've talked on here many times about how EAs will begin a "race to the bottom" once they realise that hanging on to hopes of silly prices will leave them with no transactions and therefore no commission and they will go bust. Well a similar sort of thing happens with the banks. With prices rising they had to join in with the silly multiples in order to remain competitive. They too are in a position where, knowing that prices are falling and will continue to fall, they want to lend a lower LTV. Thing is, if any bank dropped its LTV by a lot more than every other bank, it will most likely go out of business from being uncompetitive. So I imagine that the pressure is still on banks to lower its LTVs. The more prices fall, the more banks will want to lower its LTVs to protect against further falls. I think the only way out of this could be if the nationalised banks get huge amount of subsidies (from the tax payer) in order to lend large amounts back to the taxpayer to keep house prices so high that the tax payer can't afford them.
Not sure that'll work though.