Still A Lot Of Denial Out There

[azogar]

hey PP

are pigs testicles not good bear food?

of course the real deal are prarie oysters!

rock on!

lol - i didn't know what they were until I looked them up at wikipedia, quite a delicacy in fact

nowhere quite does it like the States......

http://www.flickr.com/photos/anomalyzer/49491578/

[shipbuilder]

Good old gold plated Ballymena

http://www.propertypal.com/99-lisnevenagh-road-shankbridge-ballymena/75503

RV 165K

Or for £20K less....

www.propertynews.com/zthp

Edited October 9, 2009 by shipbuilder

[S S]

Or for £20K less....

www.propertynews.com/zthp

That must be the best example of what not to build.

I have a friend who lived not that far from there and from April to the end of June there are literally clouds of flys which come up from the lough. He had to buy an industrial leaf vacuum to lift the dead flys from around the house. He had trouble selling it even in the boom.

Although the one in Ballymena Doccyboy posted aint much better, it's right beside the A26.

[sophia]

Just before the Outlet Centre (near Banbridge), heading south ,on the right hand side there is a new development with a huge sign which reads:

TIME TO MOVE

HOUSE PRICES ARE RISING AGAIN

[polythene pam]

Just before the Outlet Centre (near Banbridge), heading south ,on the right hand side there is a new development with a huge sign which reads:

TIME TO MOVE

HOUSE PRICES ARE RISING AGAIN

It's true according to the latest data so they aren't breaching any advertising codes. A house that was for sale on my road for literally years has just sold. In fact, loads of the overhang around here has shifted. People do fear 'missing the boat'. Imagine if all you knew about the housing market came from the local press and estate agents. You would have no comcept of affordability, pending impact of public sector cutbacks, reality of interest rates in the long term, oversupply of stock in the market etc etc. You might consider buying too. Ignorance is the developer's friend.

Edited October 18, 2009 by polythene pam

[nemesis]

It's true according to the latest data so they aren't breaching any advertising codes. A house that was for sale on my road for literally years has just sold. In fact, loads of the overhang around here has shifted. People do fear 'missing the boat'. Imagine if all you knew about the housing market came from the local press and estate agents. You would have no comcept of affordability, pending impact of public sector cutbacks, reality of interest rates in the long term, oversupply of stock in the market etc etc. You might consider buying too. Ignorance is the developer's friend.

Sadly both statements are only too true! I suspect that many on here, however, are expecting a second leg to the crash - that will really knock the confidence of prospective buyers and with it the stuffing out of the market.

[Ride_on]

The figures show average price of a house sale has increased, that is not necessarily the same thing as 'house prices are rising'.

[sophia]

The figures show average price of a house sale has increased, that is not necessarily the same thing as 'house prices are rising'.

exactly! None of the houses on my search have risen, infact quite alot still falling through of the ones that actually get agreed way below asking.

a house i like has been for sale for 3 years now, gradually chasing the market down and now is up for sale/for rent. i havent even viewed it, but know i would buy it tomorrow for 160-170 - rateable is 140, just because it ticks all my boxes, but i know if i offer them 170 now they wont take it as it is still just over 200k. so i risk someone else buying it.... but I know something else will come onto the market that ticks the boxes if i wait even till next summer!

[BelfastVI]

The figures show average price of a house sale has increased, that is not necessarily the same thing as 'house prices are rising'.

Technically you may be correct as people could simply be buying a grater majority of houses in a higher bracket. However Nationwide, I am led to believe (I have read the methodology and understand why they are doing it rather than how) work under a complex system that will avoid a surge in one area (of pricing) pulling the average in that direction. So is a lot of £1m homes suddenly sell they will only be averaged against other sales in that bracket and then the average of that bracket is given the same weighting as it is always has. Therefore any excuses, which I confess I put forward on the way down do not apply. They will, on the other hand have an effect on the UUJ as I understand they take a raw average.

Not withstanding there was a very good point put forward by someone that may have an effect on Nationwide. It is based on Mortgage approvals by the Nationwide. We like that because although it is from a small field (20% of mortgages) it is very accurate. However sales that were contracted during the boom, particularly apartments may only be completing now. They are at a higher level and may pull that sector up. I can't remember if nationwide give a break down that would show a rise in that house type. I would caution as very few of these have actually completed yet and I am not sure if the nationwide is offering finance on them.

Back to your statement. I would like you to explain rather than trying to second guess you. However it would be difficult to say that it shows prices are falling. I look forward to taking this up with you again when the next Nationwide report shown the average price going back down.

Edited October 19, 2009 by BelfastVI

[shipbuilder]

There seems to be this recurring theme of whether prices are rising or falling. The definition of the average market value is the average of what houses have sold, so if it is up, then the market average is up. We can attempt to explain it one way or another, but that is the reality going by the Nationwide report. The figures are what they are.

What is important is the trend and the picture painted using a range of information. So the U of U report will paint a clearer picture and other reports clearer still. This is how I try to judge the market.

Going by the TDGTTS figures, people are still reducing their prices. Estate agents are telling us that anything reduced by 30-40% or so from peak is selling. Even with volumes low, a small supply of reasonably priced housing and resultant competition among buyers for these houses, prices achieved are still massively below peak. The availability of credit and the buyers that fuelled the boom simply aren't there anymore. Figures from propertynews and home.co.uk show that there is a huge glut of overpriced property on the market. The fact that many are still reducing prices shows that many still wish to sell. This tells me that when volumes increase, or the equity-rich stop buying or have bought, the competition that is keeping prices at the current level will disappear and selling prices will continue to drop.

What historical UofU and Nationwide figures tell us is the level of demand able to support the NI market in more 'normal' times and traditional lending multiples. As lending is heading back to where it was for years, prices can only do the same, without even mentioning the state of the economy and inevitable cuts to come.

Given all of the above taken together, i don't see any argument to support a recovery, irrespective of what Nationwide figures by themselves say next quarter.

Edited October 19, 2009 by shipbuilder

[shipbuilder]

As an aside to my last point, on the logic of bull vs bear arguments, I think of it this way -

If one accepts that there was a boom in NI house prices (does anyone not?), then, by definition, that means that one accepts that prices are abnormal.

The corollary of this argument, then, is that one must accept that a subsequent fall in prices, given the nature of market forces, is an inevitable return to normal.

Apart from the fact that logic dictates that a return to a normal state from an abnormal state is a good thing, what this means that bears do not need to make an argument in favour of falling prices, they are simply pointing out the forces that prompt the correction. They are not trying to 'force' anything.

Thus the onus falls on housing bulls to make the argument to justify why prices can stay at unsustainable levels.

I see no such arguments forthcoming, so I will continue to point to the inevitable continuation of the correction.

Edited October 19, 2009 by shipbuilder

[Belfast Boy]

Thus the onus falls on housing bulls to make the argument to justify why prices can stay at unsustainable levels.

I see no such arguments forthcoming, so I will continue to point to the inevitable continuation of the correction.

Excellent post.

On behalf of the bulls I would like to say that, "it is different this time!"

On behalf of the bears, "it is the same as all the previous times!"

[shipbuilder]

Excellent post.

On behalf of the bulls I would like to say that, "it is different this time!"

On behalf of the bears, "it is the same as all the previous times!"

I guess the argument can be made that the government has and will attempt to hold up house prices. In this case, the bulls have been right in the short term. Can any government hold back market forces forever?

I think not - the correction will happen, whether it be nominal values returning to normal, or in the case of inflation being let rip, real values in relation to wages.

[BelfastVI]

As an aside to my last point, on the logic of bull vs bear arguments, I think of it this way -

If one accepts that there was a boom in NI house prices (does anyone not?), then, by definition, that means that one accepts that prices are abnormal.

The corollary of this argument, then, is that one must accept that a subsequent fall in prices, given the nature of market forces, is an inevitable return to normal.

Apart from the fact that logic dictates that a return to a normal state from an abnormal state is a good thing, what this means that bears do not need to make an argument in favour of falling prices, they are simply pointing out the forces that prompt the correction. They are not trying to 'force' anything.

Thus the onus falls on housing bulls to make the argument to justify why prices can stay at unsustainable levels.

I see no such arguments forthcoming, so I will continue to point to the inevitable continuation of the correction.

By defination it is impossible to expect prices to stay at unsustainable prices. To argue for or to attempt to justify this is nonsense as is the statement in the first place. If you accept that a price is unsustainable, how do you expect it to be sustainable?

The question is are the current prices sustainable? Has the return to normal, as you put it taken place?And what is normal?

BB will no doubt point to the old fundamental that normal is where house prices are no more than 3.5x single income. This, whilst useful is crude and takes no account of cost of living or cost of finance. The last time it was driven down to this level was after the 1990 crash was largely due to the high cost of finance (15 to 18%) rather than the high cost of housing. I am unfortunately old enough to remember and the big talk at the time was interest rates not house prices. During the span of that crash house prices dropped 22% but a more significant factor in the return to growth was the drop in Base interest rates from 15% to 5%. I would argue that that had a bigger factor to play than the average £12k drop in capital value. People then, as they do today look at the cost or servicing (including repayment) of the loan. This is perhaps more important than the capital cost. Basing this on a teaser or discount loan is foolish. However, most banks are either soaking up or factoring in future increases in the cost of funds and putting products at a near normal 5 or 6%.

Are things going to be different this time, well they weren't the same that last time so its hard to compare. There is every chance that it will be much worse and with almost twice the percentage fall in prices we can say it has been much worse. Will the intervention by the government make any difference, of course it will and already has. This time last year we were apparently looking down a very dark hole in financial terms. It may well still be on the horizon.

[shipbuilder]

By defination it is impossible to expect prices to stay at unsustainable prices. To argue for or to attempt to justify this is nonsense as is the statement in the first place. If you accept that a price is unsustainable, how do you expect it to be sustainable?

The question is are the current prices sustainable? Has the return to normal, as you put it taken place?And what is normal?

BB will no doubt point to the old fundamental that normal is where house prices are no more than 3.5x single income. This, whilst useful is crude and takes no account of cost of living or cost of finance. The last time it was driven down to this level was after the 1990 crash was largely due to the high cost of finance (15 to 18%) rather than the high cost of housing. I am unfortunately old enough to remember and the big talk at the time was interest rates not house prices. During the span of that crash house prices dropped 22% but a more significant factor in the return to growth was the drop in Base interest rates from 15% to 5%. I would argue that that had a bigger factor to play than the average £12k drop in capital value. People then, as they do today look at the cost or servicing (including repayment) of the loan. This is perhaps more important than the capital cost. Basing this on a teaser or discount loan is foolish. However, most banks are either soaking up or factoring in future increases in the cost of funds and putting products at a near normal 5 or 6%.

Are things going to be different this time, well they weren't the same that last time so its hard to compare. There is every chance that it will be much worse and with almost twice the percentage fall in prices we can say it has been much worse. Will the intervention by the government make any difference, of course it will and already has. This time last year we were apparently looking down a very dark hole in financial terms. It may well still be on the horizon.

OK maybe I should have said 'levels above normal'. Despite my poor use of words, you obviously got my point. It seems quite clear to me and others what 'normal' is - as you say around 3.5x single income. Price history tells us that this has been the average for decades and it's what my parents bought at, what all of my work colleagues bought at and anyone else I know who bought a house over the decades up to 5 or 6 years ago. How else would one define 'normal'?

One can argue about what is the average wage and so on, but in comparison to any time up until the last few years, houses are still overpriced in relation to incomes. That is my point - the data is there, i don't need to argue it. The onus is therefore on the bulls to explain why the market has bottomed out when income multiples are still well above the long term average and explain why 'normal' has now changed.

Every housing crash is different, with different factors, yet they all follow roughly the same pattern because the market always tends to the average - what is special about this one?

If we think of the market as an spring that has been stretched, I don't need to argue or explain that the spring when released will snap back to its original length. On the other hand, if you were to claim that this one time the spring will stay stretched beyond the original length, I would say that the onus is on you to explain why.

Edited October 19, 2009 by shipbuilder

[southantrim3]

Bring the interest rates up by a few %, go on - then we'll see what happens!

[shipbuilder]

I must admit that this house price stunned me. Nearly half a million pounds for breeze blocks on stilts.

http://www.propertypal.com/144-warren-road-donaghadee/76617

That is one bizarre house - I thought it might be an attempt at a bit of contemporary architecture and therefore have a suitably minimalist and modern interior, but quite the opposite.

[eyes wide open]

purely anecdotal - i sold to rent last year, just seen what was a neighboring slightly bigger house, which is in comparable condition to my own advertised for 2.5k less by the same agent...

ok, i realise this isn't a marked fall, but it clearly isn't a bounce either

as an aside, can someone tell me why my posts take more than a day to display!?!?

[eyes wide open]

btw that house isn't breeze block, its most likely hung tile or a shingle cladding

looks grim regardless