Jump to content
House Price Crash Forum
house123

Is The Housing Market About To Turn?

Recommended Posts

I have been keeping a close eye on a particular area of Suffolk since January. The area has consistently about 300 properties on right move and as you would expect, that’s a mixture of ‘for sales’ and ‘solds’, now with the latter being majority. What I have found interesting is the activity in this small market has generally been aligned with the turn in house price indexes, the positive surveys, and reports coming from all corners telling us that the housing market has found the bottom

However, in the last few weeks I have noticed activity seems a little different. I am seeing less houses being sold for starters, I am also seeing a few more properties coming on to the market. I have also noticed that there are an increasing number of properties becoming available again, after being sold. Also, I can honestly say I am seeing the greatest number of price reductions I have seen at anytime (Property Bee). I also have a few EA friends (they really are friends!), who have said August is looking tough, with lots of sales falling through because people REALLY can not get a mortgage.

Now, this could just be an odd two weeks in a generally upward trend. But has anyone else spotted this potential shift back down again?

Share this post


Link to post
Share on other sites

Banks Force up Mortgage Deposits to 50%

Mortgage Problems Stop a Tenth of House Sales

Surveyors Realist Valuations Mean Chains Break

More on Realistic Valuations

More On Realistic Valuations

Bloo Loo on STC

Housing Market Being Strangled to Death

How Long to you Wait in SSTC Nightmare

Coming out of the Bull Trap

Take a look at Bubb's images here Dr Bubb illustrates the rug pull and swing

Dr Bubb: Many HPCers are "stuck in the crowd" and influenced heavily by the resurgent mania around them.

(Maybe it is easier for me to be detached from it, living here in Hong Kong - we have our own manias here.)

This will die. And the higher the sentiment swings, the bigger the disappointment and disillusion when it

(eventually) swings back the other way.

When prices are speeding downwards in a few months time, after the rug pull, I will remind people that

the very painful next stage of the crash, would not have been fully possible without the huge surge in false

hopes that we are seeing now.

Dr Bubb in his Dead Cat Bounce Thread today HPC Link

Edited by Sybil13

Share this post


Link to post
Share on other sites
...potential shift back down again?

Potential? What else can happen? Surely it's clear to anyone with any analytical ability that the market still has far to fall, may the same magnitude fall again (another 20% from peak).

The noise in the media about 'recover' is just that, noise. No way are house prices going to stop falling without unemployment improving, no way does such a long boom and bubble end with such a short, shallow drop, no way does the worst global recession in several generations have such a minor impact on house prices.

Share this post


Link to post
Share on other sites
<snip>

I also have a few EA friends (they really are friends!), who have said August is looking tough, with lots of sales falling through because people REALLY can not get a mortgage.

<snip>

This does seem to be the main problem, and of course one person not getting a mortgage takes out a whole chain.

In the street where I live, the three properties for sale all went sold at the start of May. Since then, one has been taken off the market after the chain fell through, and the other two have been sitting there as sold but with no completion yet. It is my hunch that the sale of one or maybe both of these remaining properties will fall through.

If failed chains do cause a couple of months of prices falling again, the psychology on the market will be huge.

Share this post


Link to post
Share on other sites

I'm seeing the same round here (nice part of Worcestershire) - loads coming on (up to 10 per day in a 3 mile radius from postcode) and virtually no solds.

Game over.

Don't buy a house now! They'll only get cheaper from now on. Simplistic sentence? Well that's what's going to happen however you dress it up.

Share this post


Link to post
Share on other sites

Next door neighbours have SSTC twice this year and both times the people buying

their house have pulled out because their buyers (FTB's) couldn't get the mortgage.

Receptionist at work same 3rd in chain broken down twice due to FTB's at bottom

not getting mortgage, lost out on her dream house and retirement twice and

thousands on surveys and she has dropped her house by 75k in a year.

Long way to go yet chaps , winter of discontent here we come?

Share this post


Link to post
Share on other sites
Next door neighbours have SSTC twice this year and both times the people buying

their house have pulled out because their buyers (FTB's) couldn't get the mortgage.

Receptionist at work same 3rd in chain broken down twice due to FTB's at bottom

not getting mortgage, lost out on her dream house and retirement twice and

thousands on surveys and she has dropped her house by 75k in a year.

Long way to go yet chaps , winter of discontent here we come?

Posted on another thread but was like this. Pass a nice 4 bed house in Hertford on way to work. It has been 'sold' 3 times has come back on 3 times and is now on it's third agent. I am sure this is typical.

Share this post


Link to post
Share on other sites

Take a look at the house price graph on the front page of this site - Cycles are never random, every crash has had a 'double dip' fall. This one will be no different. I see one of the August figures has been released and this shows a downward trend to bolster this.

Share this post


Link to post
Share on other sites

You only have to read through the what salary do you need for a middle class lifestyle thread to realise that houses have a lot further to fall, the numbers just dont stack up at current wage levels.

Share this post


Link to post
Share on other sites
You only have to read through the what salary do you need for a middle class lifestyle thread to realise that houses have a lot further to fall, the numbers just dont stack up at current wage levels.

Red herring. Even ten years ago, only the very rich could aspire to the lifestyle described in that thread.

Share this post


Link to post
Share on other sites
Red herring. Even ten years ago, only the very rich could aspire to the lifestyle described in that thread.

I agree with you to an extent, but IMO the lifestyle stated was way in excess of what you would call a comfortable lifestyle, but then its established that the income required is way way way above the average. Its still reasonable to look at income multiples which is basically what I was getting at in a not very succint fashion. When I consider my own income, and how that compares with the average, and what house I can afford without taking on too much debt, houses are still hideously over valued.

Share this post


Link to post
Share on other sites
Potential? What else can happen? Surely it's clear to anyone with any analytical ability that the market still has far to fall, may the same magnitude fall again (another 20% from peak).

The noise in the media about 'recover' is just that, noise. No way are house prices going to stop falling without unemployment improving, no way does such a long boom and bubble end with such a short, shallow drop, no way does the worst global recession in several generations have such a minor impact on house prices.

Yep. Early in the year, I predicted another 20% drop from peak, and interest rates to be in double figures by January 2010! I still reckon I won't be far off with either, be it after being out by er a few months.

Share this post


Link to post
Share on other sites
Yep. Early in the year, I predicted another 20% drop from peak, and interest rates to be in double figures by January 2010! I still reckon I won't be far off with either, be it after being out by er a few months.

I'd put the interest rate rises much later than that. Interest rates won't go up until the worst is behind us and there are signs of a lasting recovery. The worst won't happen until after the election next year, when the Tories have taken an axe to the public sector.

Edited by Akrasia

Share this post


Link to post
Share on other sites
I'd put the interest rate rises much later than that. Interest rates won't go up until the worst is behind us and there are signs of a lasting recovery. The worst won't happen until after the election next year, when the Tories have taken an axe to the public sector.

Won't interest rates be forced up in defence of the pound given our increased overseas borrowing?

Share this post


Link to post
Share on other sites
Won't interest rates be forced up in defence of the pound given our increased overseas borrowing?

My reading of the situation is that for Mervyn King defending the pound isn't as high a priority as stimulating the economy, so the interest rate rises will be deferred. If you'd like to explain why I'm wrong then please go ahead; I'm always interested to hear a reasoned counter-argument.

Share this post


Link to post
Share on other sites
My reading of the situation is that for Mervyn King defending the pound isn't as high a priority as stimulating the economy, so the interest rate rises will be deferred. If you'd like to explain why I'm wrong then please go ahead; I'm always interested to hear a reasoned counter-argument.

Isn't it a case that we simply won't be able to raise the required borrowing without offering higher rates on government gilts/bonds? The rates offered on the gilts can't be totally detached from the currency rate - if we need to offer 5% to make the gilts attractive, won't that drag up the currency rate?

Edited by clv101

Share this post


Link to post
Share on other sites
You only have to read through the what salary do you need for a middle class lifestyle thread to realise that houses have a lot further to fall, the numbers just dont stack up at current wage levels.

Perhaps what you considered a middle class lifestyle has changed. One thing's for sure, there will be less of them going forward.

Share this post


Link to post
Share on other sites
Potential? What else can happen? Surely it's clear to anyone with any analytical ability that the market still has far to fall, may the same magnitude fall again (another 20% from peak).

The noise in the media about 'recover' is just that, noise. No way are house prices going to stop falling without unemployment improving, no way does such a long boom and bubble end with such a short, shallow drop, no way does the worst global recession in several generations have such a minor impact on house prices.

At the risk of sounding bullish I do not think we can predict further falls with certainty and trying to pin a timescale is very hard because of the huge manipulation.

The one thing that could drive prices down, through increased stock, is the risk of repossession, but the governement will not let the banks act as they might want:

http://www.bloomberg.com/apps/news?pid=206...id=afguNMEEu5gU

I think there is a huge range in the activity levels across the country. In Oxfordshire things are selling pretty well and seem to be completing. Some EA's I speak to can't quite believe it themselves and fear a cliff is not far off BUT they were pleasantly surprised by the current mini-boom. I need to see clear signs that has finished before I will start getting excited about more falls.

cheers

J

--------------------

STR following job change in August '08

Share this post


Link to post
Share on other sites
My reading of the situation is that for Mervyn King defending the pound isn't as high a priority as stimulating the economy, so the interest rate rises will be deferred. If you'd like to explain why I'm wrong then please go ahead; I'm always interested to hear a reasoned counter-argument.

He wouldn't have the choice if there was a gilt strike. I'm not saying that will happen but it gets more possible with every bit of "stimulating the economy", ie QE that he does. It's a fine balance.

Given the choice I think they'd keep interest rates low for another couple of years minimum. But they don't have the choice. When their hand will be forced, is of course anybody's guess.

Share this post


Link to post
Share on other sites
Isn't it a case that we simply won't be able to raise the required borrowing without offering higher rates on government gilts/bonds? The rates offered on the gilts can't be totally detached from the currency rate - if we need to offer 5% to make the gilts attractive, won't that drag up the currency rate?

To be honest, I'm not sure; I've heard conflicting ideas about how difficult it will be to find buyers for government debt.

Media coverage following the BoE's quarterly inflation report has all pointed to interest rates staying low, e.g. "The governor of the Bank of England, Mervyn King, implied earlier in the week that the Bank rate could stay at 0.5% until well into 2011." [http://news.bbc.co.uk/1/hi/business/8199933.stm] However, I appreciate that the media, and even Merv, have been known to get things wrong.

Share this post


Link to post
Share on other sites
To be honest, I'm not sure; I've heard conflicting ideas about how difficult it will be to find buyers for government debt.

Media coverage following the BoE's quarterly inflation report has all pointed to interest rates staying low, e.g. "The governor of the Bank of England, Mervyn King, implied earlier in the week that the Bank rate could stay at 0.5% until well into 2011." [http://news.bbc.co.uk/1/hi/business/8199933.stm] However, I appreciate that the media, and even Merv, have been known to get things wrong.

Depends on how you read it - plenty of propaganda about at the moment. As for the media, I have no more faith in them now than I did before 2007 when they managed for the most part to miss the rather large elephant in the room.

As for Merv, I have far less faith in him now than I ever did. As far as I'm concerned, the man is a lackey carrying out Brown's orders with three bags full every time.

Share this post


Link to post
Share on other sites
My reading of the situation is that for Mervyn King defending the pound isn't as high a priority as stimulating the economy, so the interest rate rises will be deferred. If you'd like to explain why I'm wrong then please go ahead; I'm always interested to hear a reasoned counter-argument.

Because low interest rates are not stimulating the economy, and if they can`t flog their debt we are f*cked?

Share this post


Link to post
Share on other sites
As for Merv, I have far less faith in him now than I ever did. As far as I'm concerned, the man is a lackey carrying out Brown's orders with three bags full every time.

I'm not sure that's fair. He's stood up to the government quite a few times, to the point where he's been accused of meddling in politics.

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:   291 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.