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carseller

The Housing Market Is Around A Bottom

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I can tell you exactly why. First, all the wrong people are predicting prices to fall. That is a bullish sign. The mass sentiment is that prices should fall: Bullish. Yield curves, humpy, signals boom. Even central banks fighting the last war, deflation.

This post will probably receive many ignorant replies from people who don't know what they are talking about that think prices will go down. That will only confirm my belief that they will go up. My guess is that someone who have really thought it through will think prices should rise.

I think housing is similar to the dotcom. The dotcom took 3 years from peak to through. I guess housing that peaked in the US in june 2005, is at around through now.

Western governments are trying these massive stimulus packages, then all out the sudden, china will go on to revalue their currency again, and inflation will be back, and house prices will rise again, just like in the seventies, there will be stagflation. It was when japan revalued the Yen in 1977, that the second seventies boom got started. This boom will start when China revalue the yuan.

Holding cash in a bank account, to buy a house at a lower price is going to be a horrible investment as inflation will eat away at the cash, while house prices rise, due to negative real interest rates, food prices, fertilizer, all that will go through the roof. Many things are likely to outperform real estate, as prices still have to fall in real terms, but cash is not likely to be one of them.

Edited by carseller

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I can tell you exactly why. First, all the wrong people are predicting prices to fall. That is a bullish sign. The mass sentiment is that prices should fall: Bullish. Yield curves, humpy, signals boom.

Western goverments are trying these massive stimulus packages, then all out the sudden, china will go on to revalue their currency again, and inflation will be back, and house prices will rise again, just like in the seventies, there will be stagflation. It was when japan revalued the Yen in 1977, that the second seventies boom got started. This boom will start when China revalue the yuan.

Holding cash in a bank account, to buy a house at a lower price is going to be a horrible investment as inflation will eat away at the cash, while house prices rise, due to negative real interest rates, food prices, fertilizer, all that will go through the roof.

I have a horrible feeling you're right, but not for the reasons you highlight.

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I thought we'd only just begun. It'll take a while for inflation to filter through to wages. House prices are still going to slide faster and faster as all the mugs who have deposits and are taking advantage of the buying oportunity realise there'll be better buying oportunities later and stop buying houses. House prices are still falling in nominal terms in the states, and they have inflationary problems don't they?

Seems to me we probably are going to get some medium term inflation, but house prices will have gone down heaps by then.

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There will be no easy inflation route out of this situation.

The fundamentals of the economy, its structure, the way the economy encourages the non-productive, prices out the productive will mean that any competitive advantage gained by devaluation will be dwarfed by the negative effects of inflation.

We went past the point of no going back years ago. Now it is damage limitation, or in the case of unleashing inflation on an already debt-soaked, savings less and increasingly unproductive economy, potentially terminal.

Edited by OnlyMe

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6 months max to we are at rock bottom, although I think it's now. In 6 months credit conditions will have improved, and inflation will be back.

Current house prices must be viewed in light of all the future inflation, that's going to be very big, negative real interest rates will push long term rates higher. It's the Chinese and the emerging economies that needs to rew up. Once that happens, it's stagflation for us, as they take an increasing stake at the food table.

Edited by carseller

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6 months max to we are at rock bottom, although I think it's now. In 6 months credit conditions will have improved, and inflation will be back.

Current house prices must be viewed in light of all the future inflation, that's going to be very big, negative real interest rates will push long term rates higher. It's the Chinese and the emerging economies that needs to rew up. Once that happens, it's stagflation for us, as they take an increasing stake at the food table.

blimey, what you doin here? Get back in the gimp cage (financial forums) :P

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blimey, what you doin here? Get back in the gimp cage (financial forums) :P

Look, the chinese kept their currency undervalued, pushed down our mortages rates by printing their money to buy it, that gave us the false housing boom, we could buy their stuff, even we had no money..Now they will make their currency stronger, our longer term rates will shoot up, while our short term rates will be low due to our governments that thinks deflation is the threat, and then create negative real interest rates. The stimulus will come in ontop of that. That will make house prices rise again, It's not very difficult to figure out.

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I'll repeat to what what I said about stocks in November.

This may be a bottom, but may not be the bottom.

If they crank credit markets up to start HPI now, there will be further malaise down the track. Sure as eggs.

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just [yawn] for the record, are you predicting that:

(1) high inflation will mean that nominal prices are unlikely to fall much, even if real prices in all probability will due to the fact that we're in a very serious recession; or

(2) sustained very low real interest rates will make even real house prices increase [i.e. there's probably barely time even now to snap up those last few bargains]?

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Look, the chinese kept their currency undervalued, pushed down our mortages rates by printing their money to buy it, that gave us the false housing boom, we could buy their stuff, even we had no money..Now they will make their currency stronger, our longer term rates will shoot up, while our short term rates will be low due to our governments that thinks deflation is the threat, and then create negative real interest rates. The stimulus will come in ontop of that. That will make house prices rise again, It's not very difficult to figure out.

Show me the yields on 10 year UK gilts that support this.

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6 months max to we are at rock bottom, although I think it's now. In 6 months credit conditions will have improved, and inflation will be back.

Current house prices must be viewed in light of all the future inflation, that's going to be very big, negative real interest rates will push long term rates higher. It's the Chinese and the emerging economies that needs to rew up. Once that happens, it's stagflation for us, as they take an increasing stake at the food table.

Ever considered what 60,000 + redundancies a month and a dire prolonged recession might do to house prices.

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I can tell you exactly why. First, all the wrong people are predicting prices to fall. That is a bullish sign. The mass sentiment is that prices should fall: Bullish. Yield curves, humpy, signals boom. Even central banks fighting the last war, deflation.

Errr, when was this great war against deflation?

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just [yawn] for the record, are you predicting that:

(1) high inflation will mean that nominal prices are unlikely to fall much, even if real prices in all probability will due to the fact that we're in a very serious recession; or

(2) sustained very low real interest rates will make even real house prices increase [i.e. there's probably barely time even now to snap up those last few bargains]?

House prices don't move that fast, but the time to steal from those desperate sellers that thinks this is 1929 are probably running out as they are soon going to figure out it's not, and second, I think we are looking at a very high increase in consumer prices. I think real house prices will go down, but in nominal terms I am looking at prices to rise, but I don't think it will be any big rises, before we get a couple of years into an inflationary boom.

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CS - Which "wrong" people do you mean are calling for further falls, and what makes you think this is the moment of "despair" rather than simply a (stimulus announcement induced) bull trap? Are you saying you think the rise in unemployment has nearly peaked?

I'm suprised by your call to be honest - I must be one of the wrong people. :unsure:

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It'll take a while for inflation to filter through to wages

Why would this happen? In the past there were unions to fight for wage rises, and no pool of skilled imigrant labour to keep wages down. Are people in fear of losing their jobs going to demand wage rises?

Just because stuff gets more expensive does not mean wages will rise- people will just get poorer and house prices will fall lower to meet their lower spending power.

For the last ten years Brown has been extolling the virtue of having a relatively poorly paid 'flexible' labour force- by what magic will this trend reverse itself in the middle of the worst reccession in 50 years?

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House prices don't move that fast, but the time to steal from those desperate sellers that thinks this is 1929 are probably running out as they are soon going to figure out it's not, and second, I think we are looking at a very high increase in consumer prices. I think real house prices will go down, but in nominal terms I am looking at prices to rise, but I don't think it will be any big rises, before we get a couple of years into an inflationary boom.

OK, thanks for the tip. I'll bear it in mind :huh: .

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That is irrelevant to the point he makes

i dunno what you're getting at here, mate. although the opening post seems like speculative nonsense to me, it's a plausible story based on the fundamentals of supply, demand, and so on. how could something that will cut income & thereby reduce demand by so much possibly be "irrelevant" to a forecast of house prices?

Edited by the flying pig

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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