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steviebrown

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About steviebrown

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    HPC Newbie

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    Surbiton
  1. I though I would visit his website - it's not often you find so much material on such a tosser... But my computer saved me.
  2. Can you post what she said... i dont get this facebook thing... I mean who wants to see my face...
  3. My charts are quarterly so for there to be a bounce we would need three months of a rise... I just don't see it this year or next.... maybe 2011... who knows. This cat is pretty floppy...
  4. I agree really - I just mechanically copied and pasted the history of the index from the 90s into the future so of course it brought the recent boom with it. However, I do think prices will start to rise again in 2015... I mean that is a long way away I just think that the horror of the current/coming crash will still be burned in the memories of buyers and bankers so the pace of growth will likely be much much more modest.
  5. I have posted this before but here is an update of what I did to work up a forecast... I looked at the Nationwide HPI back to 1952. The trouble with this is it is nominal so it just looks like a bubble and of course in part it is but money isn't worth what it used to be so you have to take inflation out of it and it is always better to look at these things on a log scale. Ah thats better now we can see a trend - but a flat line is boring so why don't we just copy and paste the last crash... But what does that say when we bring it back to nominal (we have to guess an inflation rate - i have used 4% but if they print money like crazy that will be just plain wrong) But lets focus on the near term a bit... Now I did all this one year ago and the red line shows how the actuals have matched my forecast.... pause for smug sign of satisfaction.... So whatever way we look at it I think there is a long way to go and I personally wouldn't be surprised to see a bigger decline than this forecast suggests £100,000 as the average house price looks very likely to me. Steve
  6. I agree entirely - but I find it just amazing that people don't understand how devastating the impact of the collapse in economic growth will be, as companies starved of capital cut back on investment and consumers who can MEW no longer cut back on spending. Of course the world has binged on debt and the only way to avoid depression is to go back to 2001 and tighten up on credit and money but we cant go back and the medicine is going to taste really bad. The bulls are almost comical in their blindness.
  7. Your point on affordability is not completely wrong but it is not the only thing that matters to the average man in the street. On affordability today's low rates help, but at today's rates the key figure is how much debt you take on... the recent reduction in rates from 6% to 4% (33%) only reduces the monthly payment on a 25 year loan by 18%. But the man in street (or at least the sensible ones) will worry about tomorrow's rates and 8% mortgages are not so distant a memory. Going from 4% to 8% would add nearly 46% to someone's repayments. The only way to mitigate that is not to take on too much debt in the first place. The asymmetry is caused by the fact that even at zero interest rates you still have to pay back the principal. But the killer point is availability of credit - the answer to that is credit is only available for prime borrowers with large deposits - in other words a fraction of the home buying population. So prices have to come down to a level where the debt the average man is taking on is low enough that his deposit matters and he is still a prime borrower. How you can think that the crash is over when Roubini says (and he's right) that the US banking system is bankrupt and the UK banking system is in an even more parlous state is stunning to me. Where is the money coming from to fund these still ridiculous prices.
  8. Fair cop Guv' So which do you prefer... GC1 and GC2 or The Great Crash and Property Armageddon
  9. That indeed is the point of the post - this crash is already happening twice as fast as the last one and to get back to normality ie. 3 x average earnings we still have a long way to go; and that neglects the fact that this is not normality, this is the most significant banking crisis the world has ever seen. So don't get all fretful at one months blip in the figures. The new angle for those that missed it, and I apologise if someone else has posted on this before, is the pace of the change in Price - Earnings ratio, twice as fast - I say twice as fast as Great Crash 1....
  10. Sorry I forgot to mention my theory on why the boom kicked off in 2002... seems to me it was all to do with the monetary easing that took place after 9/11... That kicked off growth in house prices as people got used to lower interest rates and bankers forgot that you need borrowers to pay back the principal too. Liar loans might have had something to do with it too, but unfortunately I don't have a handy signature to fill in the details. Anyway once a bubble starts, inflating human nature – "you mustn't miss the boat", "get on the ladder" – does the rest until it pops. Someone has a quote in their signature which sums it up very well, the quote goes something like this "Men go mad in crowds and come to their senses one by one".
  11. Don't panic Mr Mainwaring the crash has only just begun and it will happen faster and harder than the general populace can imagine, and whatever you do don't believe anyone who says you will miss the boat - you wont - you have will have years to buy at what will seem like bargain BMV prices and all the people who are now saying jump in to the market before prices rebound will then be saying don't invest in property its a mugs game. Here is a handy chart straight off the Halifax dataset. They calculate average Earnings to average Prices... don't matter about the source of the data the interesting thing is the trend.... First thing to note 3 is a magic number.... at that price to earnings ratio the average man in the street believes he can afford the average house in the street so he buys it. I know it might overshoot but believe me it is only when that happens that it is a time to jump in before prices shoot up. The second thing to look at is the rate of decline this time round. In GC1 - the rate of decline was about half that in PA1 (That's Property Armageddon 1), since we have a global financial crisis the like of which the world has never seen before there is no reason for that rate to decrease, if anything I think it might increase - the current rate would put us on track to hit the magic number of 3 by Nov 2010. So shut your wallets and when the time comes you will have plenty of choice and plenty of time to make the choice. Cheer up bears.
  12. The currency market is the ultimate ugly contest.... i think second guessing it is probably nuts
  13. Go to Hometrack http://www.hometrack.co.uk/ put in your post code and it will give you the ratio.... Hope that helps Here is Surbiton.... Monthly Price Change -0.7% Viewings to Sales Ratio 17 Sales to Asking Price Ratio 85%
  14. Currency exchange rates are the ultimate ugly contest
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