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House Price Crash Forum

Max Power

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  1. i was speaking to a colleague who'se looking to buy in Islington: apparently she's having trouble with viewings because houses go so fast they're gone by the time she goes to see them, often gone in a matter of hours. I can't believe how house prices have defied trends for so long, and like many others face pressure to invest. A friend of mine told me he can hold up for another year, but then his girlfriend won't allow longer. He's desperate to see prices slip by then. It's a speculative market which means it must be a bubble, it's just so frustrating to see that it's propped up unlike ordinary bubbles by people's desperation to own, not just invest. The whole edifice is surely creaking, but when i hear annecdotes like above i wonder what is going on in the world. It beggars belief.
  2. Bulls think prices will rise and bears don't, which is why on wall street there's a famous bronze bull: http://www.organfocus.com/deadprogrammer/w...street-bull.jpg Sometimes the bull is all bo**ocks
  3. Well, does anyone have any counter examples? I've no reason to trust the Halifacts numbers particularly, but is there anyone with a set of numbers showing a housing bust or recession for a country hosting the olympics? Or the host city prices rising whilst the country's went down?
  4. Barcelona, Sydney and Athens all saw house prices rise by more than 50% in the five years before the games. http://news.bbc.co.uk/1/hi/business/4656927.stm 1992: Barcelona +131% (Spain +83%) 1996: Atlanta +19% (USA +13%) 2000: Sydney +50% (Australia +39%) 2004: Athens +63% (Greece +55%) Source: Halifax (Rises over the five years prior to the games) I see a trend.
  5. Been mulling over the Land Reg figures which seem to indicate that in the main, despite the stagnation in the market, there's enough buyers with the will and the money and wage expectations to keep the market alive. And then I remembered that we've got the Olympics coming for 2012. There'll be cash flowing into london for years before-hand, people coming here to build and work, it'll all be good. Except for house prices. The market looks like it's going to stagnate for a bit longer, and once the current low IR period draws to a close there'll be the Olympics to keep London, and by extension the whole UK market afloat with buoyant expectation and cash. I see no crash
  6. How irritating. At least interest rates will presumably go up, which should nip similar rises in later quarters. I guess I'm not surprised. All annecdotal evidence I have is of ftb's who are willing to stretch to current prices because they are frightened of future rises and believe it's the best investment of their money. That makes it a seller's market. My brother and wife want to buy in Oxford, and his wife is convinced after watching Kirsty that they have to do it soon as prices will keep rising. They will do anything to get on the market. My friend who'se convinced there's a crash around the corner says he can only hold out one more year, and then his girlfriend won't acccept any further delays. He buys second hand clothes to save up for the deposit. My colleague just tried to buy a house in Oxford for 295 000. Once they had put in their offer, the house price went up to 300 000. I don't know to what extent the fundamentals underly the prices, but the fundamentals aren't changing much and people are blind to sacrifices and desperate to get on the market. The herd factor is as strong as ever, and there is no arbitrage in the market or ways of encouraging an early correction. Until house prices become truly unaffordable (rather than just painful) or there is some external shock it looks like they'll just keep on rising... It just beggars belief that people are willing to drive this market on.
  7. Is there a difference in how the figures are seasonally adjusted?
  8. given past years more likely 10th or 11th.
  9. I wonder how much massaging that took? :-) Nominal falls set for next month?
  10. Well, the least we can do is sign in and recommend some of the more sensible posts, like: [VoiceofStratford], London- I've just bought my first home for £111,000. The previous owners bought it 3 years ago for £65,000 and they bought it two year prior to that for £40,000. Thats almost 200% rise in 5 years. What on earth can justify that rise? Our population hasn't doubled and half our housing stock hasn't be demolished. Homes are incredibly overpriced as a result of buy-to-letters. When the bottom drops out of that market it'll hit us all. [Peter_Sym], Nottingham RECOMMENDED Recommended by 6 people
  11. I'm a hearty bear. I'm making decent returns on shares, cranking out my maxi-ISAs each year, doing my best to ignore colleagues who got on the property ladder at an absurdly young age and live in huge amazing houses and drive fancy cars as soon as they come to market. I understand many of the arguments for a crash: housing purchase demand/prices are based greatly on speculative investment, one of the biggest signs of a bubble. House purchases have been funded by households vastly decreasing the amount they save and by cheap borrowing. Emerging markets can pin down interest rates only so long, and once their cheap imports have been factored in, interest rates may well return to higher levels for the longer term. If we hit a recession or there is some other external shock then the whole edifice is likely to go down like a house of cards. The problem is I am locked out as an FTB by present prices, but things aren't going to get better for me if there's a recession. My job insecurity will go up, I still won't be able to able to afford a house until there's been quite some correction. My share gains are likely to be wiped out, unless the pound goes down and my foreign holdings compensate my UK share losses. The housing boom's transfer of wealth to the older generation won't reverse, so I'll remain both worse off and in the midst of a recession - as house prices can't correct without our economy going down the pan. As I understand it the house price boom, which is crazy and irrational, is just a ratchet. Whatever happens I lose out unless I really keep my wits about me and am extremely fleet footed. So what is there to hope for?
  12. Another interesting figure which may have a little less noise is the amount of money first time buyers are putting into the market . According to the report, once the weightings for 2006 are put in, FTB's are putting in less money in than any time since June 2004. Whereas there has been no change for former owner occupiers between december/january/feb. The FTB figures for Feb is slightly lower than Jan. Now I just need to figure out what the mix-adjustment weighting means... There's plenty more to say about these figures. A4: Mix-adjusted house price FTB Former Owner Occupier ... 2004 Jan 1 128,431 181,052 ... Jun 139,730 192,193 Jul 143,270 196,008 Aug 143,850 198,796 Sep 144,110 198,123 Oct 143,847 200,275 Nov 144,431 199,468 Dec 145,408 197,059 2005 Jan 1 146,024 196,054 Feb 145,887 194,701 Mar 149,470 198,681 Apr 150,133 196,181 May 150,259 197,313 Jun 150,348 199,468 Jul 153,168 201,163 Aug 153,285 201,110 Sep 2 152,543 202,052 Oct 2 151,927 199,904 Nov 2 152,225 201,053 Dec 2 152,683 200,768 2006 Jan 1,2,R 142,721 203,610 Feb 2 141,069 201,206 Note 1 Note that the weights used for mix-adjustment change at the start of each calendar year (i.e. in January). The mix-adjusted prices are therefore not comparable between calendar years, although they are comparable within each calendar year. 2 From September 2005, data are collected via the Regulated Mortgage Survey (RMS) of the Council of Mortgage Lenders (CML)/BankSearch. Prices have been chain-linked to remove the structural change to these data caused by the change of survey. R Figures for January 2006 have been revised following the annual change of weights.
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