Casual Observer
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Posts posted by Casual Observer
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What happens when one of them wants to stop working to have kids?
They hiope by then that one person's salary has grown enough to be sufficient, or they work part time, or they get family to help out.
All of which my wife and I were faced with when we bought in 1975
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just so everyone knows the full story (for any newbies who follow the GOM vs CO posts
)we sold our only UK house & moved to France. Kids didn't quite settle (although they said they wished they had stayed now
), so we rented our French house out to a lovely young French couple (at below the going rate for the type of house) & decided to rent a place in the UK.I had spent a year lurking on this site before we moved to France & luckily only sold due to those idiots in the BOE dropping rates in 2005. If they hadn't I do believe the bears who called it then would & should have been right.
After spending far too much time on here every day & trying to learn more about the economy & it's associated markets (housing & stock etc), I managed to convince the wife not to buy (now that was very hard).
I feel that due to this site I have saved all my hard earned equity & now have a house in France (which will still get hit with a fall) but there is no mortgage on it. I am not very well off (although my parents are) so we will look for a nice 3 bed stone detached in about 3/4/5/ years time hopefully to buy in West Yorkshire area I think.
my Q1 2007 prediction is for the start of the crash byw, not the start of the falls. I still think I am correct with this. In a year or so we will know, if I am wrong, then I am wrong.
thank you all for you time.
Were you ever in the Olympics reverse-cycling event?
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The simple answer? HPI and IRs are two projectiles on a collision course. High HPI velocity can only advance the crash and increase its magnitude...which in turn makes a faster, inflation-proof (i.e.NOMINAL!!!!) crash that much more likely.
(edit greengrocer's' apostrophe)
S'not what RB thinks!
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That doesn't change the fact that your prediction of peak IR's is currently off by at least 75 basis points (which is no small margin). Where is your new prediction for the peak?
No, but when someone reminds me that my prediction was wrong, it's fair for me to do likewise to them. Just like Oldie did to me.
I don't attribute as much a linkage between IRs and HPs as some of the posters on this site. My main interest is in HPs. Having said that I don't think we're far from the peak in this IR cycle. I think we've either hit the peak now, or there's 1 more hike to go.
They'll raise them until CPI and/or HPI falls, so if I've underestimated the strength of the housing market again they could go higher than my forecast.
Who cares really? This is HPC forum not IRR (Interest Rate Rise) forum. People get excited about IR increases as a surrogate for the absence of the HPC they expected 2 years ago.
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the Q1 2007
is just my way of having a bit of fun CO. I have no UK property & chose not to buy based on being "educated" from this site & it's many knowledgable posters. Everything is playing out as expected & therefore I am very happy. Course you are, GOM, course you are.
I bet you were particularly delighted at this morning's HPI figures from Halifax.
At what point did you decide not to buy, based on the education you received from this site?
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Ketchup with your albatross sir?
... says Oldie, the master of predictions.
Simple question, Oldie. Did you expect average y-o-y HPI to be in double figures in May 2007?
Let's analyse your predictions, shall we? Or are you too frightened to make any on this forum
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don't couples buy together anymore? I think the average house and the average mortgage needs to consider the average salary, which is not one person but somewhere between 1 and 2.
Spot on. This is what most people on this site seem to ignore.
Couple buy houses, as well as singletons. That's what is keeping the market going.
A couple on a joint income of say 40k can afford to buy if they have a deposit.
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Makes you wonder why so many people are priced out
Greater divide between those who can afford them and those who can't?
Lots of properties are being sold at these prices, so there clearly aren't enough people yet who can't buy them
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d23 I am stunned and shocked by your comments. Are you insinuating that property guru might be talking out of his a55hole????
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have they, where abouts then. ahh, you mean the asking prices for rents probably.
They haven't gone up in Wakefield at all, in fact the market has a lot more rentals on the books now than last year, a lot more new builds & semi's & terraced. H'mmm I wonder why.
Give up GOM!
Q1 2007 will be your epitaph.
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Casual Observer, Europa..... and a few other lightweights who have since left due to embarassment
And, be honest, what did you and GOM think the rate of HPI would be by now?
Up 1.1% per month
Q1 2007 will hang around poor old Grumpy's neck like an albatross as the year goes on
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45 minutes to go....
45 minutes to go....
La la la la la la la...
45 minutes to go....
Why does everyone on here think it will be a hold when every TV programme & newspaper is predicting a rise?
It will be a rise, and everyone on here will go ballistic. And then in about 3 weeks time there will be another report that prices have risen by 1.1% in a month. :angry:
Some of you treat news of an IR rise like house prices just crashed.
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There is something wrong with those figures.
15 years ago was 1992 - 3 years into the crash.
Average house now - what is an average house - 3 bed semi? - where I live that will set you back about 275k.
Average wage - who knows - let's go with the generally accepted 25k. (There are LOTs of jobs advertised round here - the vast majority in fact - way, way less than 25k)
But, for the sake of debunking the figures.
275k mortgage @ 6% - interest only - repayments £16,500 a year.
£16,500 is 66% of £25,000
After tax it is not possible.
The figures are drivel - but they go unchallenged. I'm not saying mine are 'right' - I am saying the only way average people on average wages can afford an average house is if there are two of them and they both earn average wages. Even then they need a mortgage of 5.5 times their joint income.
And heaven help them if interest rates go up in the future.
The UK average house price is nearer 200k.
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Still clutching at straws.
"There won't be a HPC because I sold STR then bought back too early" seems to be the philosophy behind your thinking.
Surely the main reason is this:
A 100% mortgage taken out 15 years ago to buy an average house price by someone on average wages at 12% interest would have taken up 60% of salary to repay on an interest-only basis.
Today, the same situation with a 6% mortgage would eat up 36% of income
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This is because the prices being paid are not based on sound value, or increased viable price earnings ratios.
Well as you know, I factor mortgage interest rates into my assessment of affordability, since most properties are bought on mortgages.
I think that people who relied on price to earnings measures to predict nominal falls since 2003 have missed this vital factor, and this explains their exasperation and surprise that there wasn't a crash over the last 4 years.
If you plotted monthly average repayments against average incomes you'd see a less dramatic "bubble"
I don't see a large increase in IRs from today's levels personally, which is what I think separates our views.
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What was your HPI forecast for 2007 CO back in December on Jason's prognasticator,you didn't see much strength then.Even I have used up three quarters of my 8% in just four months.
I think it was about then it finally dawned on me that the MPC was a lunatic fringe.before then my attacks were a bit tongue in cheek.
I really though prices would be flat throughout 2007.
I underestimated the strength of the market, but I'm still hoping that price inflation will start to drop for the rest of the yeart, and be flat by the middle/end of 2008.
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The article you posted is very bullish and attempts to discredit Will Huttons arguments
Once again poor old RB's post fails to live up to the thread title's promise!
I reckon he's really a bull, intent on discrediting this site!
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Stagnation... the chances diminish with each passing day!
Well it depends where the true limit of affordability lies. Let's be honest, for prices to keep rising month on month there must still be enough people who can buy them at these prices and these IRs.
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The longer the madness goes on the slimer the chance for stagnation, in a sane market this should have stagnated years ago.
It seemed to do just that in 2005, there were even reductions for some areas. It's the way it rebounded so spectacularly in early 2006 that convinced me of the underlying strength of the market.
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You really don't like history, do you?
I admit, I prefer Double Geography on Thursday afternoon.
History is not really your ally in this argument. There are few examples of interest rates being 3 times the rate of wage increases, which is what your theory seems to rely on.
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When will the madness end. I'd thought we might have stagnation by now, but it looks like it could be deferred until 2008. :angry:
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my personal rule of thumb is that the price of a property should be so that a 25year repayment mortgage should roughly equal the rental.at the moment the price of the property is 60% overvalued by my rule of thumb and would need a 35-40% fall in current prices to fit my rule of thumb. This is at current interest rates and if we see 6.5% base rates i think we could indeed get a 50% fall in current prices!!!
If you'd said that the interst element should equate to the rent I'd be a bit more in agreement with you.
Don't forget the repayment element gets you an asset, and also that your total repayments get you "free rental" for every year after the debt has been repaid.
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Ah, you seem to haven't realized yet that it is sort of the late 70s all over again.
Whoopee, 15% pay rises per annum then!
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I have just put £500 on betfair.com for "No Change". Those lads at the MPC seem a little optimistic that inflation will go down by the end of the year. If I am right and I think I am this time, I will get £14,500.00 back.
I like to put my money where my mouth is.
Well, good luck to you, but I feel you're going to lose your £500.
If you read what the MPC have said a bit more carefully, they have predicted a fall in inflation, if they rigorously tackle it. There is so much expectation of a hike that they would be foolish in the extreme not to raise tomorrow.
And The Decision Is Raise to 5.5%
in House prices and the economy
Posted
At least you're still here, which is a credit to you.
I seem to remember you posting that I wouldn't be on the site after the end of March 2007, because we'd be seeing price falls in the monthly reports.
I respect you for sticking around, I really do.