Wednesday, Jul 08, 2009
5 years
Telegraph: House prices drop to 2004 levels, Halifax says
Currently prices are back to 2004 levels, so anybody who bought in the last 5 years overpaid.
Posted by stillthinking @ 02:23 PM (2525 views) Add Comment
40 Comments
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1. need-a-crash said...
"Peter Bolton Kind, chief executive of the National Association of Estate agents, said: "It is no secret that many people consider bankers to be responsible for the mess the economy is in. The very least they should do is to take appropriate steps to help us to recover."
...so that'll be to stop lending ridiculous salary multiples for mortgages and allow the housing market to continue crashing - is that what you mean Peter Bolton?
2. theboltonfury said...
It completely depends on the area you bought in. The falls are not unison.
3. peeping tom said...
Even if the 'annual rate of decline continues to narrow' anyone with an ounce of common sense can see that there will still be a downward trend for the forseeable future, which means that prospective buyers will hold off longer or look to haggle prices down further.
4. mander said...
If Halifax has taken the most afected areas in price drops makes sense but looking in London in 2004 they were asking for a house £150 000 and now they are asking £ 350 000.
It should be ilegal for organizations with interest in the housing market to publish any reports at all. Cause how could they publish acurate reports against their past wrong doing?
5. mark wadsworth said...
Another thought strikes me - why did Halifax release these figures today? For over a year they've waited until the morning of the Bank of England interest rate announcement, which I guess will be on Thursday.
6. mrflibble said...
5 years of gains wiped out in less that 2 years of falls... Not bad going at all...
Where next? Same again Sir?
7. bluebeach said...
You're all having a laugh. If a house came up at 2004 price levels around here, I would rip my right arm off to bag it. Prices have changed little in my area. The odd repo is cheaper but anything still in ownership and in good condition is still at 2007 levels or more. I am beginning to believe that all of us on HPC have been duped. Please tell me that things will get more affordable....please.. and not just more Building Society statistics..... should I stick it out?
8. cyril said...
I think the price will tend to drop further as more houses go on the market. At the moment the number of transactions is very low.
Bluebeach - I live in quite a 'nice' area and prices are definitely cheaper than a year or two ago so I trust the indices in general - but not to the nearest half a percent.
9. str 2007 said...
bluebleach
You don't say which area you're talking about in your post. But South Hampshire has been down 15% from peak but picking back up quickly.
10. Mrflibble said...
@7. bluebeach
Keep the faith dude...
I think you'll have an answer to your question within the next few months, the market will either stagnate or break downwards again. If there is enough downward force then the confidence should erode badly and the capitulation phase play out as per the script, if not, then I believe this thing will drag out for years on end doing nobody any favours.
11. mrflibble said...
@7. bluebeach
Keep the faith dude...
I think you'll have an answer to your question within the next few months, the market will either stagnate or break downwards again. If there is enough downward force then the confidence should erode badly and the capitulation phase play out as per the script, if not, then I believe this thing will drag out for years on end doing nobody any favours.
12. Old_traveller said...
bluebeach @7: you are talking about asking prices. Have you taken a look at atcual transactions in your area? zoopla, land registry etc, you will be surprised.
13. Xoman said...
The statement "... so anybody who bought in the last 5 years overpaid." is somehow incorrect. I bought at auction in December 2008 a house for £143000. The same type of house on the same street was exchanging hands for £237000 to £245000 during 2006 according to Land registry figures. According to Land registry figures I paid a 2001-2002 price. So as I said ... The statement is not fully accurate. In the auctions I attended in October - December 2008 in London, professional investor and some lucky individuals were getting almost new flats at roughly half the prices paid prior to August 2007. Myself I lost one of those flats that were auctioned in the north west of London. The majority of the flats were in the east of London though. Also in the Midlands ...
14. This comment has been removed as it was found to be in breach of our Blog Policies.
15. letthemfall said...
Anecdotally some areas have held up, probably those where the rich still fall over each other to bag their dream homes (limited dreamers that they are). On the other hand, I live in a region where the jargon-addled EAs reach for the "sought afters" with every cup of coffee. The last time I was able to steel myself to cross one of their thresholds, they said prices down 20%. Few places remain islands in an HPC for ever. Sooner or later, for reasons of debt, credit limitation and unemployment, amply expressed on this site many times, prices must fall. Either that or the law of gravity has been broken forever. Do EAs have pet cats called McCavity?
16. bellwether said...
Blue beach if you can tell me your post code, I can tell you quite quickly whether prices in your area have fallen.
17. drk said...
My part of West Sussex, only 5-10% drop in 2008, now asking prices back at or close to 2007 and selling......Getting desperate.
18. mr messy said...
house prices by me are at 2007 levels plus 5 percent , there is no level playing field out there
19. str 2007 said...
mr messy
What area ?
20. mytimeisnigh said...
mr messy lives in Dudley....West Mids..lol
21. nubbers said...
Bluebleach (and others), not everywhere falls at the same time, so just because your area has not gone down again yet, does not make it a good buy. It makes it a bad buy.
The same uneven pattern has played out in the US, where they are 12 months ahead of us. The more upmarket areas have only recently started to fall. www.patrick.net is a good website to follow for the US picture.
If your area has doubled or tripled in price in recent years, then you know where it is going to go back to.
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23. str 2007 said...
nubbers
How do you know where it's going to go back to ?
24. matt_the_hat said...
This thread is getting as delusional as house prices have been over the last decade:
Lets examine the cause of the HP boom:
1. supply arguments - no 1 million houses are empty
2. demand arguments - no population increase did not warrant HPI we have seen
3. increase in cheap money supply - there we have it
Lets examine current CC effects on house prices:
1. increase in unemployment or prospect for it.
2. Banks have to price in risk - reduced lending/money supply
3. Reduced interest rates - this is temporary as the gov finances deteriorate IR will go up as no individual is a better credit risk than a population.
4. Printing money may mean HP go up in nominal terms (same as all other HPC's) but real terms fall - gov knows ordinary folk work in nominal numbers.
Results - HPC proportional to real money supply drop - just make sure your savings don't go the same way - i.e. Gold
25. drk said...
M_T_H @19
How long do you wait or expect the effect of CC to work through to house price reductions? At the moment in certain (most?) areas prices have yet to go back below 2006 levels (let alone 2004!)
26. quiet guy said...
@matt_the_hat
I have to say I'm only seeing modest price drops in the areas I've lived in over the past few years - about 10% asking prices. Mr Fibbles comment that "I believe this thing will drag out for years on end doing nobody any favours." seems about right so far.
@bluebeach
"should I stick it out?"
Only you can decide but I'd suggest planning for gentle property price declines. If you can afford it, there are some non-financial benefits to ownership. It's not all about money.
27. Greenshootsandleaves said...
Mr Bluebeach @7: It's not what houses 'come up at' but what they 'went for' that matters.
28. str 2007 said...
MTH
''2. Banks have to price in risk - reduced lending/money supply''
They are pricing in risk currently and mortgages are available with 10% deposit below 5% interest rates. Larger delosits see interest rates on a variable basis fall down to 3% or so.
From what I can see money is readily available otherwise houses wouldn't be regularly selling as soon as they come onto the market (South Hampshire).
I'm not saying I like it but this government has sent a clear message to borrowers that they will do anything possible to help them.
There seems to be a nice fluffy cushion awaiting the over indebted and woe betide anyone who has saved their money and not put it into the system.
29. hpwatcher said...
There will only be greater and more sustained falls once we have a change of government. The problem is that GB is still in trying to maintain the housing bubble, and so he prepared to drive the whole country onto the rocks in maintaining these inflated prices.
If you think about it, tax payers money is now being used to keep the bubble inflated i.e. bank bail out and all that.
Though, I am seeing some big falls in some properties in the area I have been looking - north london.
30. Mr G said...
My wife is selling a house as executor of a deceased relative.
The first EA to value the property, which is in a somewhat run down condition, suggested it went on the market immediately without any improvements in order to catch the "summer selling season" as he felt that prices would start falling again from the autumn onwards.
31. mr g said...
I heard an interesting comment from a VI earlier this week.
My wife is selling a house as executor of a deceased relative. The first EA to value the property, which is in a somewhat run down condition, suggested it went on the market immediately in the hope that it would sell quickly as he thought that prices would start falling again in the autumn.
32. Cg said...
I wonder what the effect on house prices would be if unemplyoment rises as predicted?
33. cg said...
125% mortgages are back!
34. inbreda said...
@31
Not for new house sales they aren't!!
So it won't have an effect! At most it might stop some of the bigger idiots in society from defaulting!
35. inbreda said...
to qualify - I wasn't referring to new houses, I was refering to new mortgages.
36. inbreda said...
bluebeach, xoman, mrmessy and drk are, I suspect, all the same estate agent (probably unemployed now. Certainly with too much time on their hands). We probably wont ever see those usernames again.
37. This comment has been removed as it was found to be in breach of our Blog Policies.
38. drk said...
inbreda @ 34
An EA? Not me mate, just a humble scientist who has no axe to grind. I was just making a comment on the area I currently rent in and where I would ideally like to buy a property. My comment was an observation, nothing else. FYI, I cannot afford to buy where I rent so I try and find out what is going on, who is buying, what are they paying, how they are paying for it, so I can make a rational decision based on facts and information that is readily available. If it appeases you, I hope that HPC occurs and very quickly. I do want to buy a home so I need to decide how long I wait before I buy or indeed, whether I can afford to buy in the area I currently live in.
39. bluebeach said...
Just because I tell it how it is where I live, doesn't mean that am some VI trying to paint a "all is well Mr Borwn" picture. If all you want on this site is anorak wearing statos, w@nking each other off, then you may well lower the impact of what we are all aiming for.... An ordinary family chap looking hoping for a fairly priced roof over my head..
40. Drk said...
inbreda @ 34
An EA? Not me mate, just a humble scientist who has no axe to grind. I was just making a comment on the area I currently rent in and where I would ideally like to buy a property. My comment was an observation, nothing else. FYI, I cannot afford to buy where I rent so I try and find out what is going on, who is buying, what are they paying, how they are paying for it, so I can make a rational decision based on facts and information that is readily available. If it appeases you, I hope that HPC occurs and very quickly. I do want to buy a home so I need to decide how long I wait before I buy or indeed, whether I can afford to buy in the area I currently live in.