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House Price Crash Forum

ItsColdUpHere

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Everything posted by ItsColdUpHere

  1. I believe I've just crossed the line into paranoia... I'll stop now...
  2. A cunning ploy - if I answer this one I MUST be an estate agent...
  3. I suppose I didn't say it right. What I meant was "emotional demand" - I want a Ferrari, vs. "economic demand", I want a Ferrari AND have the money. Only one of those is real demand. There is an equivalent on the sale side: I want to sell my house vs. I want to sell my house, but I don't need to and I want X pound. If X pounds is to high for a given area, its not real supply, its just a ****** with a house up for sale. There can be as many people who "want" to sell their houses as you want, but unless they are HAVE TO drop their price to match the amount the demand side is offereing, they can be ignored. There are many houses like this on RightMove at the moment - vastly overpriced for the area. To sum up, my argument is that there are not enough people who willing or HAVE to lower their prices to drive prices down. This situation is entirely created by government support.
  4. I agree with all of that. Without government intervention and government created low interest rates demand would fall as people couldn't afford the higher interest rates or deposits, supply would increase becuase a lot of people couldn't afford to pay their mortgage, and a new, lower, price level would be reached, probably after a massive crash. This is after all what happened in the early 90's. But the government hasn't stepped aside, in fact they are increasing their fiddling. Its that Pesky Reality again...
  5. I think you're wrong about this. I think it will take a rise in interest rates to drive enough of these people out to make a difference. Time will tell, I have no crystal ball, it will be interesting whatever happens. I'm not arguing there isn't a bubble, just that there is no "pent up demand". There IS a bubble, it WILL be deflated by either inflation or price falls over an unknown period of time. What we don't know is how much of the work will be done by inflation, how much by price falls and over how long.
  6. So any argument that doesnt suit you must be a VI. Very Orwellian... You just want a website where you congratulate each other on being cleverer than everyone else, tossing yourself off over your collective wisdom. anybody who disagrees MUST be a VI, because its IMPOSSIBLE for anyone else to hold a valid viewpoint. Whatever.
  7. It only mattera if they're pent up enough to reduce their prices, otherwise they dont matter at all. Demand is only demand if the buyer has the money. Supply is only supply if the seller is either willing or has to sell at thar price. Otherwise neither of them matter. Your pent up supply is conjecture and nothing more.
  8. I dont know why people bang on about real prices - a crash needs to be in nominal prices to affect the people who already live in the houses. If i pay 100,000 for a house, thats what ive paid. a "real price" fall doesnt affect my equity, or myability to pay the mortgage, only a nominal price fall. Does it genuinely matter if my house is now worth less in eggs, dvd's, gas, cars etc? Im paid in pounds, and thats what matters - and wages arent rising at all....
  9. Surely if there is a crash London is MOST likely to go because its pricing level is furthest from what you might call a rational valuation?
  10. I said higher that volume is what will suffer as prices rise. This site is housepricecrash not volumecrash... I have a theory that high transaction volumes were a function of rising prices rather rhan the other way around, as people could move "up the ladder" every few years. There's no point in moving into a similar house to the one you've got every 4 years is there. "There is no ladder now" So volumes will naturally be lower in a static or slightly falling price market. # This theory is tenuous at best and could just be b####cks...
  11. :-) Low prices can only work to INCREASE prices for so long, but they will affect the average price level as long as they are low. I.e. prices will on average be higher with low interest rates than with higher interest rates, because people only look at their monthly payments. Prices will fluctuate in either world of course...
  12. Asking prices are meaningless. I could ask for 1 million pounds for my house then cut it in stages down to 150k where it would actually sell. "look, an 85% reduction" you would yell. But its not really, it would just be an idiot pricing to high to begin with. Only the selling price indices matter.
  13. Theres those who want or have to move out of the market and there's people who want to move into the market. Thats what a market is. The wishful thinking element is that the market has suddenly tipped towards more wanting out than in. I see no evidence of this in prices, which are what markets are all about - price discovery.
  14. Motive questioning then sarcasm. What next I wonder? A simple "you smell" perhaps? No massive shortage, or people would be knee deep in the gutters. But i dont see any pent up supply either...
  15. What pent up supply? People have to live somewhere, its not like shares where you can decide to be in shares or not. you're part of the system either as a renter or a homeowner (mortgagee)
  16. No, I really do. High house prices gain me nothing and will make life harder for my kids. High house prices are a disaster for this country and especially for youngsters. But wanting something to happen isnt going to make it happen. I just dont believe the conditions are in place at the moment for a crash. Hopefully i'm either wrong or the conditions for a crash will appear, namely the markets forcing interest rates higher. PS. A lot of people on here seem to follow the old economist adage: "That may be true in practice but is it right in theory?"...
  17. Ah, another HPC wishful thinking thread. Prices wont crash until interest rates go up. Until then prices will wax and wane gently around 10% either way of their current value. Without interest rate rises, house price rises merely cause transactions to drop, as there arent enough forced sales to really affect prices. I hope im wrong of course...
  18. Thats an excellent find. On those figures where I live (County Durham) has the lowest P/E of any county in the list at 3.5 But what really amazed me is that Mean wages in Durham are 23.8K as against Mean wages 32.8K in London. (I expected Durham to be around 19-20K and London to be 40K) Thats only 38% more, whereas houses are 355% more!! Also, does the income bit of the calculation account for tax Credits I wonder? if not, the disparity would be even greater...
  19. Nope, they wont have the money. Neither will children or unemployed people, ethiopians, labradors or coffee tables. But other people do. Transactions? Houses arent that expensive where Im from but are ridiculous in a lot of the country. Thats my whole point, and thats the problem. I could get 30k tomorrow, but Im trapped up North and could never afford to buy a decent house down south, because 30k just wouldnt cut it and then i couldnt afford the mortgage... And the transaction number per year is always compared to the peak in 2006, when we had a "transaction bubble", which is odd - almost as if its deliberateliy being made to look bad at 50% down. If compared to none boom periods , transactions are only about 20% down. transactions rise in boom periods then fall when the boom fades. Thats human nature.
  20. Yeah, because almost NOBODY could afford 30K as a deposit for what is probably their second or third stepper house. This isn't a starter home, so you would expect a buyer to have some sort of Financial backing behind him. I know loads of people who have at least 30K of equity in their current home. In fact its hard to think of anyone I know that doesn't (apart from the ones who get free housing off the government). But then I'm quite old. Thats yet another difference between North and South - the absolute amounts needed for deposits are obviously much smaller. I know a fair few friends/acquaintances who could save 30K (20% of 150K) quite easily in a few years. I don't know any friends/acquaintances who could save 150K (20% of 750K) quite easily in a few years.
  21. My estate is a funny one - it was being built from 2002-2005 - basically the peak of HPI in the North. So you can see the history of price rises in the date of sales of the houses. The first ones went for 90K in 2002. 4 years later EXACTLY the same type of house on the same estate was going for 180K. I cunningly bought at the peak... My estate has quite an "old" people profile, so I think most of the people on the state either got in while the houses were cheap or were second steppers and made a profit on their first house. Either way, I'd estimate at least 80% of them didn't have to find the amount that the houses are now going for...
  22. Thats insane!! The same house would go for about 130-150k up here, so again about 6-7 times as much. It can't last down there. But then thats been said on here for 9 years and counting...
  23. Re: Just can't see where the money comes from, that's all. I think the high prices started with speculation, and are kept there by low interest rates, housing benefit and tax credits. An 80% mortgage for my house would be £555. Renting a cheapy terraced house costs £450 a month - a price created entirely by housing benefit support around here. Back in 1995 an80%, 9% APR mortgage for that 75K house would have been £505. Renting a cheapy terraced house would have been £270 (I know - I rented a cheapy terraced house then!!) So if you can get the deposit together paying the mortgage isn't that much of a stretch compared to renting, and the rent-mortgage ratio is BETTER than in 1995. I'd personally like to see my house drop in value by 30-40% Which would mean the houses my 3 daughters will buy will also be 30-40% cheaper. I just don't think its going to happen up here unless interest rates rise substantialy.
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