Jump to content
House Price Crash Forum
Sign in to follow this  
flatnose

Point Of Interest

Recommended Posts

Just a observation regarding the language surrounding the Housing market. "Recovery" is often used to define a state of affairs when lending and the housing market returns to 2007 levels, which many feel should be the norm. However, the reality is that the term recovery should be used to describe a return to a healthy market after a house price bubble or fever. Invariably then recovery refers to prices dropping as well as going up.

Thoughts?

Edited by flatnose

Share this post


Link to post
Share on other sites
Just a observation regarding the language surrounding the Housing market. "Recovery" is often used to define a state of affairs when lending and the housing market returns to 2007 levels, which many feel should be the norm. However, the reality is that the term recovery should be used to describe a return to a healthy market after a house price bubble or fever. Invariably then recovery refers to prices dropping as well as going up.

Thoughts?

I think the market currently is in the recovery position on emergency life support, soon the alarms will sound and the crash team will run in but sadly declare that its too late the victim is dead.

I read somewhere that politicians have been told NOT to speak of "green shoots" only "sustainable recovery".

I think people fail to realise that the sickness was the madness that led to the irresponsible lending etc of the past few years, so to say that recovery means returning to the same would be to say that having got over the plague recovery would mean returning back to being very sick indeed.

Share this post


Link to post
Share on other sites

So why not try to define recovery? Here's a start:

  • A healthy market where buyers and sellers have a reasonable idea of market prices.
  • A stable market, with no expectation of big rises or falls.
  • A non-discriminatory mortgage market. In particular, movers are not penalised by loss of favourable terms, or similar factors that suppress mobility.
  • A fair market, not inflated by public money in "social housing", "affordable housing", "homebuy", nor by tax breaks for the rich or (above all) for property speculators.
  • Transparency. That's improved muchly in recent years with online access to information: for example, rightmove, property bee, Land Registry stats.
  • Tenants rights, so buying doesn't have to be the only way to get security, keep a pet, or put up a picture in your sitting room.

Share this post


Link to post
Share on other sites
So why not try to define recovery? Here's a start:
  • A healthy market where buyers and sellers have a reasonable idea of market prices.

  • A stable market, with no expectation of big rises or falls.

  • A non-discriminatory mortgage market. In particular, movers are not penalised by loss of favourable terms, or similar factors that suppress mobility.

  • A fair market, not inflated by public money in "social housing", "affordable housing", "homebuy", nor by tax breaks for the rich or (above all) for property speculators.

  • Transparency. That's improved muchly in recent years with online access to information: for example, rightmove, property bee, Land Registry stats.

  • Tenants rights, so buying doesn't have to be the only way to get security, keep a pet, or put up a picture in your sitting room.

A stable market, with no expectation of big rises or falls.

What would be wrong with NO rises or falls?

Share this post


Link to post
Share on other sites
In a healthy market I would expect house prices to rise in line with general inflation/wage inflation.

Historically they rise at roughly 2% above RPI (or its predecessor). On that basis there is about a further 15% to fall to bring it in line.

Share this post


Link to post
Share on other sites

'Recovery' is a slippery word. One the one hand it means 'to regain' what was lost. " His ailing fortunes recovered when the war broke out..'

But it also is used to mean to 'return to health'. 'We wish you a swift recovery'

Regarding housing, these two usages seem to be totally opposed. Getting back everything you 'lost' when you bought at peak, means anything but a 'healthy' housing market for future generations.

Share this post


Link to post
Share on other sites
Historically they rise at roughly 2% above RPI (or its predecessor). On that basis there is about a further 15% to fall to bring it in line.

Nope. That 2% above can entirely be accounted for by wage inflation. Guess what, wages have declined in real terms for the last 5-10 years in this country. In the US the peak real term household income was in the 80's.

Houseprices need to drop more than 15% to reflect the great grinding western impoverishment. And what about the earnings drag of having to service the greatest credit/debt bubble of all time?? Nah take your figure add some digits, double it..and you might be closer ;)

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
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   287 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.