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House Price Crash Forum

Van

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Everything posted by Van

  1. Seriously, what a tosh article. Every single house purchase is a compromise- location price size nobody gets what they want at the price they want, where they want. You prioritize on what is most important to you and compromise on the rest. duh.
  2. The only Fact that is important and of real relavance is that prices, as measured by Nationwide's house price index was UP +0.3% last month, and the year on year change is -1.6%. Everything else is conjuncture, including all the macroeconomic arguments which may or may not be proven to be the case. I've given the reason why I *think* that houses will not see big falls, and so far this is backed up by real substantial collated data. What was it that Keynes once said? "When the facts change, I change my mind" - the facts are that mortgages are cheap, and prices are flat to mildly falling.
  3. It will take more expensive mortgage rates and/or a bigger rise in unemployment to get substantial nominal falls going again. While mortgages rates can still be had for 2-5% then buying works out cheaper than renting (much more so in some circumstances) and so people will still be clambering to buy houses.
  4. Just confirms my forecast - flat to small nominal falls are the best we can expect, the rest will be done by inflation over a long period of time. Sorry, but the bears who expect a return to the large YoY falls of 2008-2009 will be disappointed. We just ain't going to see it.
  5. There's 20% further to fall in real terms, and it will be a combination of nominal falls and inflation. Wage inflation is low at the moment, but it will pick up when (not if) the economy is stronger in a few years time. It's naive to project 2% wage inflation 20 years into the future. Exactly how that 20% is made up (nominal vs inflation) depends large 3 variables - interest rates, unemployment, and the availability of credit. I suspect that relative to price inflation houses will become cheaper quite quickly, but still quite expensive relative to wage inflation. I doubt that we'll see houses as cheap relative to wages as we saw at the bottom in 1996.
  6. I think it's firmly the "Delusion gap" that is causing this huge drop in transactions. Vendors are still sticking their properties on at top prices and refusing to drop significantly, and buyers won't or can't buy at those inflated prices. The delusion gap is huge at the moment - the ratio of rightmove/halifax is as high as it has ever been.
  7. No one's talking about private schools. sheesh. All the other poster said was that some private tuition to supplement the local school would be much more cost effective.
  8. I have to agree than when it is possible to get a mortgage rate for less than 3% then it's very difficult to have a big crash. Of course, IF rates rise then this will have a serious knock-on effect, but until then we will still be in a silly-money market in many parts of the capital.
  9. Most sellers aren't going to take £250k on a £300k asking price. Generally anyone with sense puts their property on a price and hopes to get 90-95% of the asking price. I viewed a nice flat at £300k in Clapham back in January; had been on the market for 4 months at the back end of 2010 and he had a buyer buy that fell through. The flat was very nice, and certainly better than many other properties we saw. Ultimately we didn't buy it.. and neither did anyone else, because it has just been relisted with a different agent (begins with "F") for £345k in the last couple of weeks. Quite how this seller thinks that by changing agent they are going to find a buyer who is prepared to pay more in a market that has generally fallen since the flat first went on the market, but it goes to illustrate the delusional mindset of most vendors. Meanwhile the flat is just sitting there empty and losing money on potential rental income, and will have done so for over a year.
  10. Sorry, he didn't sound as assured to me as usual. There was a lot of irrational anger in his voice, and he also made a huge gaffe (lie?) - "most mortgages taken out are interest only" which is not true (and was corrected by a phone-in caller) in an effort to get his points across. And the truth is that IF you have the deposit, then it is cheaper in many cases now to buy than to rent. And YES, if rates go up then this will push those at the margins over the precipiece. BUT you can get a cheap rate fixed for 3 years today, during which time you can overpay, so it's not so disastrous if prices do slip more in the next 3 years.
  11. So it looks like being "Temporary" for 4 years now. Merv is an a$$hole.
  12. The key difference is that US homes mortgages are tied to long term (10yr) interest rates, which don't change as much. UK mortgages are tied to short term 2/3 year rates, so we have been able to stave off a bigger fall with ZIRP. Of course this will act as a drag on the UK economy when rates rise.
  13. The Delusion Index = the ratio of Rightmove price / NW+HF DrB has posted about this on GEI. I believe the index is now registering a ratio that is literally unprecedented.
  14. Then you are as foolish as the perma-bulls, and will be waiting a long long time.
  15. House prices have indeed lost ONE THIRD of their real values since the peak. We always knew that prices would need to fall 50% in real terms in order to bring them back into line, and so it is proving to be the case, as ludicrous and unbelieveable as that may have sounded at the time. No we are more than half way there, and there is hardly anyone in disagreement that prices have further to fall. No new paradigm. The bears win.
  16. At last, they are recognising this. NO NEW PARADIGM where investors can continually prop up the market. It doesn't work like that. FTBs are the lifeblood of the market. Without them, no chains can complete and there can be no market.
  17. What is also true is that the YoY % change is a trailing moving average - i.e. it will lag turning points and smooth out the peaks and troughs. So, yes, prices have been in decline since last summer, but we may be just a little closer to the bottom that those charts suggests.
  18. Let's remind ourselves that anything less than 0 indicates a falling market, and RICS is usually a good indicator that comes in 2-3 months ahead of NW/HF.
  19. Factor in 4 years' worth of general inflation: (http://www.watsonwyatt.com/europe/pubs/statistics/render2.asp?ID=1#hicp) Apr 2008 3.0% YoY Apr 2009 2.3% YoY Apr 2010 3.7% YoY Mar/Apr 2011 4% YoY gives us 13.6% So, it is accurate to say that house prices have lost a third of their value in real terms since their 2007 peak. Take that, perma-bulls!
  20. 5%? Wishful thinking. In my experience they'll like they'll trim 2-3% at a time (ie cuts of £5k-£10k).
  21. Apr-10/ 168,593 Apr-11/ 160,395 By my calculation that is -4.86% YoY
  22. **BUMP THREAD** Halifax Mar 2010/ 168,433 Apr 2010/ 168,212 May 2010/ 167,287 Jun 2010/ 166,351 .. Apr 2011/ 160,395 = -3.7% YoY We are just at the sweet spot where last year's peak prices start of roll out of the YoY figure, prices will need to fall by about -0.5% for the next couple of months just to keep the YoY figure around this level. there should be more bearishness from Nationwide in the coming couple of months: Apr-10/ 167,802 May-10/ 169,162 Jun-10/ 170,111 So their YoY figures should be turning a deeper shade of red over the next few months.
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