Friday, Jul 16, 2010
Will house's be cheap enough by 2013 ?
Bloomberg: U.K. Home Prices Will Drop Through 2012, Capital Economics Says
July 16 (Bloomberg) -- U.K. house prices will fall through 2012 as the deepest public-spending cuts since World War II and tighter credit conditions deter potential buyers, Capital Economics Ltd. said.
Posted by mr cobblepot @ 10:51 AM (1622 views) Add Comment
15 Comments
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1. drewster said...
Capital Economics forecasting record isn't very good, I seem to recall. MarketOracle have an excellent article and graph on the matter:
2. doomwatch said...
I really want[ed] to believe Roger, but a stopped clock has proved more accurate.
3. techieman said...
"The 2012 forecast “is highly uncertain,” " eh?
Recaptcha : of letdowns
4. str 2007 said...
Yes,
Not sure how this lot are still in business.
They get paid for advising companies in financial matters I believe.
This graph above says it all really.
Never been right once.
5. str 2007 said...
Hi techieman
Talking of charts, I noticed the Nikkei fell last night but FTSe didn't follow suit.
Would you be expecting the end of the retracement now and further falls on the markets ?
6. need-a-crash said...
Come on guys that's a bit unfair on poor old Roger. In many ways he's always articulated what most non-VI financially minded people have always thought. In 2005 prices did look ripe for a crash, but no-one anticipated the BoE lowering rates and the insane levels of lending banks were prepared to do on sub-prime mortgages. By 2007 the market was insane and it did crash but again no-one really thought a government would intervene with Zirp (because it had NEVER been done before) or with QE (because it had NEVER been done before) or with such massive public sector spending to maintain employment. Now we've had an election and it looks like QE and the public sector employment is falling away and Zirp may possibly end as well, we're simply back to where we were in 2005 or 2007... ripe for a crash!
7. str 2007 said...
I think maybe.
But everyone seems to forget how much 'interest free' money has been gifted to homeowners.
They ain't getting forced to sell.
With regard to unemployment being the catalyst, with interest rates so low it would be cheaper to keep people in their existing houses and pay the interest element of their mortgage than re-house them if they become redundant.
So looking forward I'm struggling to see the major catalyst. Unless interest rates get forced up (doesn't seem likely).
So to be honest I'm seeing a bit of a trickle down, with hopefully a few bargains on the way at present.
But I havn't given up, there's lots of things that can happen yet to accelerate us towards more normal house prices.
ReCaptcha : pedaled gonorrhea (Oh dear)
8. techieman said...
oh str2007 - mostly because BP have sorted "it". Am in a bit of a rush to tell you the truth - my 5164 was a bit early. We need to close below 2 trend lines to be confident... Opex today in the US.
9. str 2007 said...
Anecdotal for South Hampshire
Just been through Rightmove - not sure what's happended in the last week, but all selling like hot cakes again.
Does this reflect anything in your areas ?
10. nickb said...
@STR,
Seems to me that many people still won't be able to pay their mortgages if they are unemployed... they will be paying several points above the base rate even if that is historically low, and some are on fixed rates too. I read that assistance with mortgage interest payments is being halved. So it seems to me that even if the interest required on top of premium repayments is low, the credit to pay it will not be available with loan volumes falling.
Nick
11. uncle tom said...
There's quite a lot for sale in my locality, but the median asking price is very high - currently over £300k.
Even in a town that is less than fashionable, such as Harlow, the median asking price is £190k
Considering that eight out of ten households would struggle to service a £150k mortgage, this is a market for the few, and not the many..
..and that can't last..!
12. techieman said...
STR 2007
Just to come back to you, yes we closed below the two trend lines I mentioned. That’s bearish. However we also overshoot my target of 5164 to the upside by a fair bit (high as 5300 and change). That would be bullish.
Ok so we are having some shenanigans in the S&Ps. As you probably know its Opex today (option expiry day). There is a theory that the price will end up at a level where most option buyers will lose their premiums and most option writers will not.
http://www.optionpain.com/CurrentPain/Current-Pain-demo.php#jump
Therefore there will – so the theory goes be gyrations but that it will tend toward the max pain level. Now I don’t know where that is personally, because I don’t subscribe to the site (I am normally not in the market then). But today I am.
In addition once it gets to the option pain price and then the options expire, there can be snap backs either way.
As for have we finished the move back up? Well I cant say I am very confident for a number of reasons:
1. The option pain skews things.
2. 5164 was taken out in a big way, to the upside, although market now trading around 5150 [and no I didn’t get stopped out].
3. The probability is that this move down from 5300 is a B wave of an abc of 2 see http://1.bp.blogspot.com/_TwUS3GyHKsQ/TD-SYPjzxHI/AAAAAAAAGXw/xg27HYmkso0/s1600/spxdaily.png
4. That means that after a bit of downside follow through it may rally once more. If it did rally really that would now be ideal (regardless of my shorts).
5. The USD could have one more lurch to the downside, which may be consistent with a move up in equities. http://4.bp.blogspot.com/_TwUS3GyHKsQ/TD-RjEKmxHI/AAAAAAAAGXg/RYlJcMPAUAY/s1600/usd.png
Of course this “c” wave could just be part of a new bull market.
And the alternative? The alternative is that we have had all the retracement and its going lower.
Will I liquidate? Well I might liquidate some FTSE if it extends a bit lower, but I will hold onto the S&P positions I have and will be stopped out at the prior high probably around 1120, or alternatively carry them forward for a profit.
As I said it all depends what happens with the Opex. That’s later today.
13. Bloke said...
For God's sake! It's "Houses" (plural) not "House's" (possessive).
14. str 2007 said...
Techieman
Thanks for coming back again , quite alot o digest there.
I must admit I was't aware of OPEX, I look on a FX tradingclender to avoid tradingthrough obvious news. It doesn't list OPEX just US CPI for today as important and tehse seemed to be roughly what they were expectng.
As I type the S&P500 is close to the 1063 level Estrader talks of.
Ill keep away today and see what next week brings.
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