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TheCountOfNowhere

The Bulls Are Right...

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It just occurred to me...the bulls have been right, there has been no HPC.

BEAR with me on this.

In 2005/2006 the housing market was over heated and due a massive correction. Normally this would have happened, in recent decades, that's when the HPC should and would have occurred. However, something stopped this....the unlawful lending that went on or whatever shady dealings were happening behind closed doors. This wasn't house price growth, this was theft from the stupid, the greedy, and ultimately the tax payer. 2007 to 2009 has nothing to do with housing !!!!

So...in reality...what we saw from 2007 to 2009 was the froth being kicked off the HPC pint, now we're back at 2005 prices ( or there abouts )....so let the HPC commence....

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I've sat here and waited. I've listened to the, who I consider, more knowledgeable on the economic outlook and I've seen little of the house price crashes that were apparently inevitable during 2007 to 2009. I appreciate that a watched kettle never boils, one Swallow doesn't make a Summer, and I've seen a number of hardened Bears falter as I'm sure you all have.

Personally, I feel that I am in a massive gambling game at the moment and it is little more than that; prices are still at, or around 2007 levels in my area and the odds are not dropping that fast or at all. I'm not for turning, but things are not going as the relentless posts of Tin Foil Hatters and the more optimistic offer. What is going on and when does the normal person jump in as, like many, I'm just confused????????

Edited: poor spilling

Edited by The_Stars_Are_Aligning

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I've sat here and waited. I've listened to the, who I consider, more knowledgeable on the economic outlook and I've seen little of the house price crashes that were apparently inevitable during 2007 to 2009. I appreciate that a watched kettle never boils, one Swallow doesn't make a Summer, and I've seen a number of hardened Bears falter as I'm sure you all have.

Edited: poor spilling

This is the one area where the likes of Hamish et al had a point, and that is that HPC will not be standardised across the UK. No doubt some of the decent areas will prove more resilient than others. I am a little disappointed that the momentum gained through the latter months of 2008 has given way to a slowing-down though I am confident of crash course speed resuming in Autumn. As it is, in 2007 I would have been prepared to pay 160k for a two bed terrace; similiar properties are now being listed for 120-130k. Pretty f*cking impressive falls as far as i'm concerned.

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I can hear what you are saying, I can hear what the bulls are saying, I can see boards going up on property advertised at 2007 values , properties that have been sat there for months and months and months suddenly going . I can see EA's getting increasingly bullish, property that needs totally renovating being advertised at peak prices ...........it is hard to not be sucked into the illusion.

BUT none of the factors are right for a turnaround in the property market.

People are jumping because they are reading that property is going back up.

They are reading that interest rates are going up.

They are worried about their money in the bank.

They are jumping because they think by next year property price increase will be under way again.

They are jumping because they have waited long enough.

All the old psychology is still coming into play, have to get in now, you will miss the chance..........good investment......

BUT what has always been an illusion is becoming , by the day, crystal clear, and one more MINUS on a house price index , a few more whispers about just how restricted mortgage lending is and will be for a long long time, QE not extended, and this little burst, this last flicker of insanity will be over, and house price crash will resume and continue for a long time to come.

There is a HUGE vested interest in the market not falling but fall it will just as it has and continues to do in the US.

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This is the one area where the likes of Hamish et al had a point, and that is that HPC will not be standardised across the UK. No doubt some of the decent areas will prove more resilient than others. I am a little disappointed that the momentum gained through the latter months of 2008 has given way to a slowing-down though I am confident of crash course speed resuming in Autumn. As it is, in 2007 I would have been prepared to pay 160k for a two bed terrace; similiar properties are now being listed for 120-130k. Pretty f*cking impressive falls as far as i'm concerned.

I appreciate that each to his own and the areas that we wish to purchase within are entirely different depending upon your own savings/earnings/location etc. However, I have 6 figure deposit as a FTB, but my age is not anywhere near the usual FTB and dreamed of around 40% to 50% reduction that the likes of FP 'promised' would happen that gives me nowhere near, at current prices, the power to achieve what I want. Maybe I'm naive, like the rest of us, and Sibley et all is correct; maybe I'll regret posting this... I just want to know which way to turn and silence the shepple that think I/we are wasting our time/investments.

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I don't care one way or the other, if HPI resumes and the world economy falls for the false economy and money pours into stocks and property then I will use that as the biggest gold buying oportunity in history. One last hurrah before the collapse of credit based economies. Otherwise, i'll sit on what I have and wait for the bottom, I can always rent out and move at leasure, if I were to get caught up in a buying frenzy in a false market supported by low base rates and QE then I'd lose. As far as I see it now it's heads I win, tails home owners lose.

As it stands, the fundamentals are pushing in one direction and one direction only and only zimbabwe'esc printing can support the opposite flow for any length of time and then I believe I'd be uninterested in buying a house in the uk.

Edited by zebbedee

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Just because they believe in green shoots, it doesn't mean they actually exist, or if they do, that they're not going to turn into spindly brown turds over the next few months.

If they're still around in September, I may re-evaluate my position then. Until such time, this bear is still very much sh*tting in the woods :)

Edit: Duplicate word

Edited by narrowescape

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The housing market is in the doldrums across the whole country.

Some houses come to market at 2007 prices. They simply will not sell. But this is irrelevant. The are always people who put houses on the market at speculatory prices.

Across the country, the average price for houses which have actually sold is down by 20%. Hard fact, Nationwide and Halifax, who know about these things.

We have huge falls to come this Winter as the effects of unemployment hit home and the repo's start hitting the market in bunches.

Any serious STR'r never imagined that he would be house hunting in July 2009. We have another year to wait, maybe two. But you cannot argue with mathematics.

Any FTB can only buy a house which is at a low multiple of his earnings and until the FTB market starts moving, prices will continue to fall by far more than the rent I am paying.

Just hang on and let those Bears who fell into the Bull Trap repent at leisure.

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I'm trying really hard not to be inflammatory/trollish so please bear with me here.

I know there are lots of arguments that make a lot of sense as to why house prices are hugely overvalued, which I don't, in principle, disagree with. But at the same time there are SOME arguments that support a return to the upward drift.

Now, where do you draw the line between what you believe in and what you actually do?

Let's say that 147,700 was the low, how far do house prices have to rise before you actually realise you are wrong and buy in (this is a theoretical situation rather than an accusation)? It's very easy to make punchy statements on an anonymous forum, particularly if you don't actually have enough money to EVER afford a house. But if you are thinking of dipping a toe, where does wise become greedy, when do you just say that's enough and buy in at 20% down? You've already made 20%, do you really want to risk your family's future for the sake of another 10% that might or might not happen?

I think it's important to get in tune with all these mindsets if you really want to understand the property market.

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I completely agree. Ive been in the middle of this market since spring, and it has been insane.

Absolute rubbish is being snapped up within days. Asking prices are back to 07 levels, and people are buying them.

Anything that is reduced seems to get phone calls within hours. For example, one house was reduced from 162k to 145k at 10:30PM on a sunday night, and the vendors got 2 viewings at 10am the next morning! Sold by 2PM!!!!

There is a major lack of anything decent, and when it turns up, there is a bidding war, and final offer only deals. One house on for 150k got 4 offers after a day, and the estate agent told us all to put in our final offer by 1pm. We gave 5% off asking (we are cash buyers), and got turned away, as someone offered "substantially" more!!

I cant stand the fact estate agents are getting cocky (which they have been doing over the past 3 months!). We are cash buyers, and I have had estate agents getting pretty rude if I mentioned it during negotiations. Its almost like they are getting payback against the evil cash buyers that took advantage during the slow months!

In the normal (ie pre-07) market, was the busy spring-summer market like it is now, or worse?

Edited by manbearpig

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This is the one area where the likes of Hamish et al had a point, and that is that HPC will not be standardised across the UK. No doubt some of the decent areas will prove more resilient than others. I am a little disappointed that the momentum gained through the latter months of 2008 has given way to a slowing-down though I am confident of crash course speed resuming in Autumn. As it is, in 2007 I would have been prepared to pay 160k for a two bed terrace; similiar properties are now being listed for 120-130k. Pretty f*cking impressive falls as far as i'm concerned.

Got to agree, I am looking in South Herts commonly thought of as a decent area (not all there is Shatfield and Stevenage for example) and even in the best areas prices are down 20%, lets face it is was never going to go to 50% falls in good areas.

Another 10-15% to come and has been a proper crash

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I'm trying really hard not to be inflammatory/trollish so please bear with me here.

I know there are lots of arguments that make a lot of sense as to why house prices are hugely overvalued, which I don't, in principle, disagree with. But at the same time there are SOME arguments that support a return to the upward drift.

Now, where do you draw the line between what you believe in and what you actually do?

Let's say that 147,700 was the low, how far do house prices have to rise before you actually realise you are wrong and buy in (this is a theoretical situation rather than an accusation)?

The bottom line is that if house prices do not fall to the level I expect, then I am quite happy to rent forever and let others live a life of mortgage slavery, in the quaint and charming belief that having a huge debt means you are a "property-owner", and therefore superior in some way.

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The bottom line is that if house prices do not fall to the level I expect, then I am quite happy to rent forever and let others live a life of mortgage slavery, in the quaint and charming belief that having a huge debt means you are a "property-owner", and therefore superior in some way.

OK, and again trying not to be trollish, do you not see ANY value to being a homeowner above a renter, assuming the cost is the same? Personally I am very happy to own a fantastic house that I can NEVER be kicked out of. I couldn't handle the uncertainty and stress of renting, and I would value that feeling quite highly.

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I'm trying really hard not to be inflammatory/trollish so please bear with me here.

I know there are lots of arguments that make a lot of sense as to why house prices are hugely overvalued, which I don't, in principle, disagree with. But at the same time there are SOME arguments that support a return to the upward drift.

Now, where do you draw the line between what you believe in and what you actually do?

Let's say that 147,700 was the low, how far do house prices have to rise before you actually realise you are wrong and buy in (this is a theoretical situation rather than an accusation)? It's very easy to make punchy statements on an anonymous forum, particularly if you don't actually have enough money to EVER afford a house. But if you are thinking of dipping a toe, where does wise become greedy, when do you just say that's enough and buy in at 20% down? You've already made 20%, do you really want to risk your family's future for the sake of another 10% that might or might not happen?

I think it's important to get in tune with all these mindsets if you really want to understand the property market.

Big statement around bricks and mortar a family's 'future' has a few more facets than just the roof over their head very sad.

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I'm trying really hard not to be inflammatory/trollish so please bear with me here.

I know there are lots of arguments that make a lot of sense as to why house prices are hugely overvalued, which I don't, in principle, disagree with. But at the same time there are SOME arguments that support a return to the upward drift.

Now, where do you draw the line between what you believe in and what you actually do?

Let's say that 147,700 was the low, how far do house prices have to rise before you actually realise you are wrong and buy in (this is a theoretical situation rather than an accusation)? It's very easy to make punchy statements on an anonymous forum, particularly if you don't actually have enough money to EVER afford a house. But if you are thinking of dipping a toe, where does wise become greedy, when do you just say that's enough and buy in at 20% down? You've already made 20%, do you really want to risk your family's future for the sake of another 10% that might or might not happen?

I think it's important to get in tune with all these mindsets if you really want to understand the property market.

I agree to an extent. I agree prices have stabalised in the short term, but I don't see why anyone should be encouraged to panic buy. If (big if) we are at the bottom, historically, prices will remain around this level for years!

Also you mentioned rising prices, as a reason to buy into the market. Surely the obvious economic factors must correlate to any increases in house prices, for it to be sustained long enough to change the path of the crash. People wont believe prices have bottomed now, for the same reason people wouldn't believe prices would continue increasing for ever; they read between the lines!

Edited by manbearpig

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To maintain house prices at current levels and have a fully functioning housing market (as opposed to minimal transactions we are seeing), we would need to see a return to credit availability at the levels we saw at the hight of the boom.

Quite frankly, this is not going to happen - it was reckless lending that almost saw the banks and the country brought to its knees.

Without sufficient credit, people will not be able to buy houses at these prices. Either the price drops or the market stays frozen and the market cannot stay frozen forever.

6 months ago it looked like the market was going to go into free-fall. It now appears to have slowed. It may play out more slowly, like Japan, where after an initial slump, property prices fell over more than a decade and are still falling today.

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OK, and again trying not to be trollish, do you not see ANY value to being a homeowner above a renter, assuming the cost is the same? Personally I am very happy to own a fantastic house that I can NEVER be kicked out of. I couldn't handle the uncertainty and stress of renting, and I would value that feeling quite highly.

There are advantages and disadvantages to both. But as my landlord is a developer with several dozen properties, and I am a good tenant who looks after the place and whose rent is paid on time by Direct Debit every month, why would he "kick me out"? He is in business.

Why would I buy now, when I pay £525 a month in rent and house prices will fall by an average of £3,500 a month between September 2009 and April 2010, as they did last Winter?

From your post, it's obvious that you own a property. I understand the reason for your position but while typing a message and then reading it might give you temporary respite from your enormous folly, it doesn't make it "the truth".

House prices down by another 20% by this time next year is my call. Other calls are available, although my call has been 100% correct so far.

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To maintain house prices at current levels and have a fully functioning housing market (as opposed to minimal transactions we are seeing), we would need to see a return to credit availability at the levels we saw at the hight of the boom.

You misread my question. Theories are all well and good, the reasoning might be perfectly sound, but what I'm asking is at what point you can't stay out of the market emotionally any more.

And to whoever said it was sad to want to own a house, it's pretty hilarious that you think it's acceptable to have to move your family every year just because your landlord feels like it. I moved every 2 years as a kid because my dad was in the Army, and it was psychologically very stressful. But, sure, ignore that, because your wallet and your ego is far more important than your family's happiness and stability.

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It's a fair point - house prices are the fulcrum around which the empire of debt is levered.

The fulcrum hasn't dissolved into nothing yet - but it will.

A house should be something you spend 12 months sorting out in your teens before getting on with the fun stuff of life, not an intergenerational millstone for shitheads in the city of *****don to lean on.

And that's what will happen. The market can bucked for periods but is never, ever wrong.

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And to whoever said it was sad to want to own a house, it's pretty hilarious that you think it's acceptable to have to move your family every year just because your landlord feels like it.

Who has to do that then?

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You misread my question. Theories are all well and good, the reasoning might be perfectly sound, but what I'm asking is at what point you can't stay out of the market emotionally any more.

And to whoever said it was sad to want to own a house, it's pretty hilarious that you think it's acceptable to have to move your family every year just because your landlord feels like it. I moved every 2 years as a kid because my dad was in the Army, and it was psychologically very stressful. But, sure, ignore that, because your wallet and your ego is far more important than your family's happiness and stability.

Of course it's not acceptable to have to move your family every year or pay an exorbitant fee, it's not acceptable and it is inefficient in aggregate that house prices are at a level that rips the simple liberty to be left alone off individuals.

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Who has to do that then?

I did, pretty much. Fortunately I didn't have a family so it was nothing but an annoying expense and a new street and dealing with all the utilities and services. You would be surprised how many landlords decide to sell up, move in themselves, move their kids in etc. I rented for 6 years before I built up enough of a deposit to escape and lived in 4 different places over that time.

Even if my mortgage reached 1.5x the cost of renting I would never go back to renting unless the law changed significantly either offering more secure mid-term tenure or at least the ability to see the landlords history when it comes to rental properties.

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Who has to do that then?

Now you're just being vague and deliberately trollish.

Why are you NOT at the landlord's mercy? Are you special in some way?

If you think you are, you should probably get over that, the minute house prices go up, your LL will be quite happy to ask you for a higher rent not to kick you out.

[e] Btw, thanks for so many good truthful answers already, this is a really interesting look at the psychology of the market. It's not all about numbers guys.

Edited by Charterhouse

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