Jump to content
House Price Crash Forum

Recommended Posts

I have been told by reliable sources that the boom is indeed back. Not saying who or what, but that's what I am told. Take it or leave it.

Am I convinced? Well not yet, although the people telling me this have appropriate information.

Does this mean the Bulls are correct? Well, the outcome may be correct in the short term, although I can assure you that all the reasons they have given are wrong. The words 'got lucky' spring to mind.

My main response is that all the reasons for falling prices are still in place, but you can't account for stupidity.

If it does happen will it last long-term? I don't think so. The latest boom seems to be down to an unxexpected side-effect of Government policy. Remember, in the last crash at one stage prices rose for 5 straight months before falling properly.

Am I turning into a Bull, or even a Neither? Christ no. Until I see what I have been told coming to fruition I'm not budging, so this is just a heads-up.

Good luck guys.

Edited by the end is a bit nigher

Share this post


Link to post
Share on other sites

I overheard a pub conversation last night:

"Well our house is now worth about 100K less than we paid for it, but if we downsize we will make a profit. Whatever people say, you can always make money on houses"

:blink:

Share this post


Link to post
Share on other sites
Fixed that for you. :lol:

No- the mean is the long-term relationship between earnings and house prices and we have nowhere near reached it yet, let alone fallen below it.

Share this post


Link to post
Share on other sites

You know what, Im starting to find this fun again, not on here though, just here in the real world.

It got kinda boring with prices going down constantly. In 2008 loads of people joined this site that were 'sheeple bears', only saying prices will go down cos they had already. They have no logical arguments or reasons to fight bulls with, just emotions

People need to stand back and try and understand what is happening. I just hope some intelligent Bulls arrive and we can party like early 2007. :P

Let the Bull trap run its wicked way

:rolleyes:

Edited by swankyman

Share this post


Link to post
Share on other sites
I have been told by reliable sources that the boom is indeed back. Not saying who or what, but that's what I am told. Take it or leave it.

Am I convinced? Well not yet, although the people telling me this have appropriate information.

I'll leave it thanks.

There is quite good medication for voices in your head from God these days. Or are you friends with the lizard people?

Share this post


Link to post
Share on other sites
bubble-lifecycle.gif

We are approaching "return to normal"

Just one quick look at that chart, that's been floating around this site forever, and you can see what's going on.

It's not like the bull trap wasnt predicted. I've even seen people using the phrase "back to normal" :lol:

People really are just stupid and easily led.

Edited by TheCountOfNowhere

Share this post


Link to post
Share on other sites

I'm as keen to see house prices fall as most contributors and have been in rental since Feb 07. I've been tracking houses prices throughout and it has to admitted that right now prices do seem to on the upswing again. One example, a place I looked at in spring 07 I thought was overpriced and sure enough it stuck on the market but last month it went to auction and sold for slightly over (3%) the original asking price. Where's the sense in that? There isn't any. The market is driven by sentiment and not logic. At the moment enough people just happen to be feeling sufficiently immune from the decline in the economy to pay too much for property.

I'm depressed about it because I see things like buyers switching agents but increasing the asking price. The cruddy stuff is still down, but it should never have been on the market in the first place. Ex council and ministry houses seem to have suffered but that's because they should never have been sold, became overvalued, relied on risky lending practices. If only 'prime' borrowers can get mortgages they will not squander it buying sub-prime property. Hence the cruddy stuff and slum property is down in price. The good stuff, at least in my area, is down little or nothing and now moving quite a bit faster. Properties I would have liked have pretty much all gone over the last two months. My strategy of hanging on until winter now looks misguided.

You can't always get what you want.

Share this post


Link to post
Share on other sites
I have been told by reliable sources that the boom is indeed back. Not saying who or what, but that's what I am told. Take it or leave it.

Am I convinced? Well not yet, although the people telling me this have appropriate information.

Does this mean the Bulls are correct? Well, the outcome may be correct in the short term, although I can assure you that all the reasons they have given are wrong. The words 'got lucky' spring to mind.

My main response is that all the reasons for falling prices are still in place, but you can't account for stupidity.

If it does happen will it last long-term? I don't think so. The latest boom seems to be down to an unxexpected side-effect of Government policy. Remember, in the last crash at one stage prices rose for 5 straight months before falling properly.

Am I turning into a Bull, or even a Neither? Christ no. Until I see what I have been told coming to fruition I'm not budging, so this is just a heads-up.

Good luck guys.

Without any source this post is just toss. I respect you as a poster but what was the point of this?

Share this post


Link to post
Share on other sites
No- the mean is the long-term relationship between earnings and house prices and we have nowhere near reached it yet, let alone fallen below it.

Given that the long term relationship between earnings and house prices is a moving target, I don't see how you can argue that is the case.

Roughly, as I dont have the figures to hand, but four decades ago it was more like 2.5. Two decades ago 3.5. For the last decade, closer to 4.5.

The underlying trend is up, through multiple cycles and multiple decades. Averaging half a century of LTI data to assume a mean of 3.0 or 3.5 is obviously invalid when the underlying market fundamentals are forcing that mean upwards over time. If the supply issue is not addressed, the mean will continue to trend upwards.

Share this post


Link to post
Share on other sites
I'm as keen to see house prices fall as most contributors and have been in rental since Feb 07. I've been tracking houses prices throughout and it has to admitted that right now prices do seem to on the upswing again. One example, a place I looked at in spring 07 I thought was overpriced and sure enough it stuck on the market but last month it went to auction and sold for slightly over (3%) the original asking price. Where's the sense in that? There isn't any. The market is driven by sentiment and not logic. At the moment enough people just happen to be feeling sufficiently immune from the decline in the economy to pay too much for property.

I'm depressed about it because I see things like buyers switching agents but increasing the asking price. The cruddy stuff is still down, but it should never have been on the market in the first place. Ex council and ministry houses seem to have suffered but that's because they should never have been sold, became overvalued, relied on risky lending practices. If only 'prime' borrowers can get mortgages they will not squander it buying sub-prime property. Hence the cruddy stuff and slum property is down in price. The good stuff, at least in my area, is down little or nothing and now moving quite a bit faster. Properties I would have liked have pretty much all gone over the last two months. My strategy of hanging on until winter now looks misguided.

You can't always get what you want.

I think that this is another case for Reckless versus Prudence. At the moment all manner of schemes are being introduced to restart the economy, QE, low interest rates etc.

HOWEVER: These are going to have to be paid for at some point, probably by cuts to services, increase in taxes, higher interest rates. If people don't factor this in now they could find themselves struggling later on and with no more possibility of helping them out.

Share this post


Link to post
Share on other sites

The ratio of 4.5 for house prices/wages is only higher over the last decade because interest rates have been lower. If the last decade had seen higher average mortgage rates, the ratio would be lower.

You also cannot say the trend in HPI is upwards by claiming there is an under supply of houses, when there blatantly isn't an under supply of houses. Evidence? All the empty houses, all the 5 bed detached occupied by one person, the glut of new builds that haven't sold.

What you can say with safety is that there's an under supply of reasonably priced houses, and there's only one variable that needs to change to fix that one.

Share this post


Link to post
Share on other sites
I'm as keen to see house prices fall as most contributors and have been in rental since Feb 07. I've been tracking houses prices throughout and it has to admitted that right now prices do seem to on the upswing again. One example, a place I looked at in spring 07 I thought was overpriced and sure enough it stuck on the market but last month it went to auction and sold for slightly over (3%) the original asking price. Where's the sense in that? There isn't any. The market is driven by sentiment and not logic. At the moment enough people just happen to be feeling sufficiently immune from the decline in the economy to pay too much for property.

I'm depressed about it because I see things like buyers switching agents but increasing the asking price. The cruddy stuff is still down, but it should never have been on the market in the first place. Ex council and ministry houses seem to have suffered but that's because they should never have been sold, became overvalued, relied on risky lending practices. If only 'prime' borrowers can get mortgages they will not squander it buying sub-prime property. Hence the cruddy stuff and slum property is down in price. The good stuff, at least in my area, is down little or nothing and now moving quite a bit faster. Properties I would have liked have pretty much all gone over the last two months. My strategy of hanging on until winter now looks misguided.

You can't always get what you want.

I have been saying this from day one. Noone here seems to be getting the message. :(

Share this post


Link to post
Share on other sites
Given that the long term relationship between earnings and house prices is a moving target, I don't see how you can argue that is the case.

Roughly, as I dont have the figures to hand, but four decades ago it was more like 2.5. Two decades ago 3.5. For the last decade, closer to 4.5.

The underlying trend is up, through multiple cycles and multiple decades. Averaging half a century of LTI data to assume a mean of 3.0 or 3.5 is obviously invalid when the underlying market fundamentals are forcing that mean upwards over time. If the supply issue is not addressed, the mean will continue to trend upwards.

"supply issue" :lol::lol::lol: , tell that to the BTL`ers trying to rent out their shoeboxes in central Edinburgh. The only supply issue is oversupply, anybody with half a brain knows that. When Brown goes, and he is fighting to survive day by day now, Cameron and co. are going to administer the hard medicine, and they are also going to account for what the majority in the country want, and that is a cap on economic migrants, Oh, I forgot, we are bust, they might not have to bother.

Share this post


Link to post
Share on other sites
I have been saying this from day one. Noone here seems to be getting the message. :(

The message is simple, many people who own nice houses are wealthy, have a cash cushion and can ride things out for a while. BUT if they want/need to sell, they have to sell at market value. Fantasy prices mean nothing until the money is actually in your bank account.

Share this post


Link to post
Share on other sites
The ratio of 4.5 for house prices/wages is only higher over the last decade because interest rates have been lower. If the last decade had seen higher average mortgage rates, the ratio would be lower.

And yet interest rates for the two decades before, were higher than for the few decades before that, and yet still the multiple rose from 2.5 to 3.5.

You also cannot say the trend in HPI is upwards by claiming there is an under supply of houses, when there blatantly isn't an under supply of houses. Evidence? All the empty houses, all the 5 bed detached occupied by one person, the glut of new builds that haven't sold.

A thousand empty new build flats in Manchester does no good for the person looking for a detached in London. 1600 empty houses in caithness and sutherland helps nobody in Edinburgh.

There is clearly a shortage of housing, of types people want to live in, where people want to live, and where the employment exists to support them.

With population forecast to increase by 12 million in the next 4 decades, this can only get worse.

What you can say with safety is that there's an under supply of reasonably priced houses, and there's only one variable that needs to change to fix that one.

Not at all. There are many parts of the country where a 3 bed terrace can be bought for 60K. And others where a 3 bed terrace costs 600K. There is no other explanation for this than supply and demand on a local level. Having a theoretical national surplus is irrelevant.

Supply in Inverness has no impact on prices in Portsmouth.

Share this post


Link to post
Share on other sites
And yet interest rates for the two decades before, were higher than for the few decades before that, and yet still the multiple rose from 2.5 to 3.5.

A thousand empty new build flats in Manchester does no good for the person looking for a detached in London. 1600 empty houses in caithness and sutherland helps nobody in Edinburgh.

There is clearly a shortage of housing, of types people want to live in, where people want to live, and where the employment exists to support them.

With population forecast to increase by 12 million in the next 4 decades, this can only get worse.

Not at all. There are many parts of the country where a 3 bed terrace can be bought for 60K. And others where a 3 bed terrace costs 600K. There is no other explanation for this than supply and demand on a local level. Having a theoretical national surplus is irrelevant.

Supply in Inverness has no impact on prices in Portsmouth.

But unfortunately, the money that was available during the good times to afford the 3 bed semi @ £600K is no longer there.

The average surplus might appear irrelevant depending on your perspective, however it's no less relevant than quoting a national statistic of house price increases (over which I seem to recall you exhibiting a certain gleefulness when the Halifax figures were released the other day).

The median salary in an area ultimately determines what can reasonably and sustainably be afforded. If the majority of people working and living in London are earning between £35K - £55K, it follows that the average price of a house in a London suburb that's worth living in should be around 3-4 times this salary. I don't see that anywhere in London, do you?

I also don't see it in places like Bristol, Exeter, Bath, Winchester or all the other property hot spots around the place where prices have deviated so far from what is affordable by the majority of working people that there is a stalemate and it won't change until people a) feel confident about their jobs B/ asking prices fall to a level that is consistent with local employment. c) All the previous conditions are dependent on unemployment stabilising or decreasing.

So, whilst the population may be set to increase in the next n years, so too must the ability to sustain the additional 10-20 million people. Where's the investment going to come from if the worlds centre of gravity is shifting to economic regimes where regulation and taxation are more favourable.

You can't have it both ways Hamish.

Edited by Sir Jack Daw

Share this post


Link to post
Share on other sites

There is no doubt there has been a spring bouce. Converstations with EAs have all come to the same conclusion:

Those holding cash are getting little in return on savings and are putting it in property. The goverment plan of lowering interest rates has worked to some extent.

As it is not really based on the economy ( which is shrinking ) this bounce will be short lived. In 6 months, people will start to wish that they had left the money in the bank.

Not sure why people take this crap though. Pensions raided Wayhey! Lets buy property. Savings interest stolen Wayhey! Lets buy property.

Share this post


Link to post
Share on other sites

Idiot post with no sources, full of conjecture, heresay and bvllshit.

Why don't you put up a post and tell us why YOU think we are into boom territory, with a disgraced government, crumbling parliament, broken banks, record national and public deficit, rising oil prices, record world unemployment, record industrial decline, a lingering credit crisis and rising national tensions.

Ahh, how it draws in the HPI numpties like flies to shit when this crap gets posted.

Share this post


Link to post
Share on other sites

local paper: auction ad for EA - can't thinkof their name - showing 6 properties which sold at their last auction

over estimate.

So rather than tell people what they're selling next... they're just showing off they sold 6. :)

Share this post


Link to post
Share on other sites
There is no doubt there has been a spring bouce. Converstations with EAs have all come to the same conclusion:

Those holding cash are getting little in return on savings and are putting it in property. The goverment plan of lowering interest rates has worked to some extent.

As it is not really based on the economy ( which is shrinking ) this bounce will be short lived. In 6 months, people will start to wish that they had left the money in the bank.

Not sure why people take this crap though. Pensions raided Wayhey! Lets buy property. Savings interest stolen Wayhey! Lets buy property.

Yeah, I really don't understand the logic of this at all and have come across it on several occasions with friends recently. More pickings for us in future once these "cash-rich" buyers make their purchases. I agree completely - there's a market overhang of cash-rich buyers (although mostly still needing big mortgages at 75%LTV) and it'll take about 6-9 months to clear the overhang.

Share this post


Link to post
Share on other sites
And yet interest rates for the two decades before, were higher than for the few decades before that, and yet still the multiple rose from 2.5 to 3.5.

A thousand empty new build flats in Manchester does no good for the person looking for a detached in London. 1600 empty houses in caithness and sutherland helps nobody in Edinburgh.

There is clearly a shortage of housing, of types people want to live in, where people want to live, and where the employment exists to support them.

With population forecast to increase by 12 million in the next 4 decades, this can only get worse.

Not at all. There are many parts of the country where a 3 bed terrace can be bought for 60K. And others where a 3 bed terrace costs 600K. There is no other explanation for this than supply and demand on a local level. Having a theoretical national surplus is irrelevant.

Supply in Inverness has no impact on prices in Portsmouth.

Hamish

Pray tell what are these 12 million geezers gonna do for a living? EA's?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   296 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.