JonnyTomes Posted October 6, 2009 Share Posted October 6, 2009 (edited) Does this look like a functional market to you? If you were manufacturing champagne during a downturn this would be the point at which you were pouring your vintage down the sink to increase rarity and maintain value. Of course, you'd be waiting for the end of the recession and the return of wealth generation (normally around 6 months for an average downturn) so that you could ramp the volume back up having maintained unit value. With the housing market, you're basically waiting for the return of mortgage credit derivatives on an equivalent scale to 2007. Banks won't lend 6-10 times single income as they know the chance of default is high. Without derivatives as instruments to shift the risky debt, they have to keep your mortgage on their books. Hence it's their loss if you default. Hence only a minority of the UK can afford current prices. Imagine you're that same champagne maker in 6 months with no return of customer purchasing power. Now you're going bust and have to start increasing sale volume regardless of price. What happens to the price of a bottle of champagne? Exactly. Edited October 6, 2009 by JonnyTomes Quote Link to comment Share on other sites More sharing options...
Turnbull2000 Posted October 6, 2009 Share Posted October 6, 2009 As I've mentioned previously; Why is no-one in the media highlighting the fact that, not only has Gordon managed to stop the HPC in it's tracks by printing money from all our futures, but he's actually managed to kick-off another dangerous acceleration in HPI of boom-like proportions. The same speed of HPI that brought the world's banking systems to collapse. And this completely ignores the harmful personal social and financial issues this causes that are well discussed on here. Interest rates up NOW. You serious? Firstly. As with the 2002-2007 bubble, the media will happily cheer rocketing prices on. Our collective short term memory seems to be getting even shorter, so no lessons will be learnt and greed will take precedence. Secondly. The harmful personal, social and financial issues were ignored last time, why would now be any different? You’ll get the occasional sob story of struggling first-time buyers, but this sympathy never reaches a genuine call for price falls. Thirdly. Rates are targeted towards restoring asset (prices) and the associated consumer spending. It’s the worst kept secret out there. Quote Link to comment Share on other sites More sharing options...
Mammon Posted October 6, 2009 Share Posted October 6, 2009 This is no bull trap. House prices will be back to peak prices by the end of next year. You all had a chance to get in at 25% off at the agents, or 33% off at auction back at the start of this year. Now you will have to wait another 18 years for the next housing market cycle low. Quote Link to comment Share on other sites More sharing options...
silver lining Posted October 6, 2009 Share Posted October 6, 2009 1.6% is massive. Never expected that. At this rate we'll be back to peak prices in months. Quote Link to comment Share on other sites More sharing options...
GordonBrownSpentMyFuture Posted October 6, 2009 Share Posted October 6, 2009 This is no bull trap. House prices will be back to peak prices by the end of next year. You all had a chance to get in at 25% off at the agents, or 33% off at auction back at the start of this year. Now you will have to wait another 18 years for the next housing market cycle low. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted October 6, 2009 Share Posted October 6, 2009 LOL at the last 3 posters . See bottom of my sig . Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted October 6, 2009 Share Posted October 6, 2009 Updated inflation-adjusted fall-from-peak chart. As usual this provisionally uses last month's RPI index until the actual number is published later this month. thanks Quote Link to comment Share on other sites More sharing options...
Wires 74 Posted October 6, 2009 Share Posted October 6, 2009 I think we will not see a HPC now depressing though that thought seems - someone is getting the money from somewhere - I walk around prosperous parts of North Cheshire and wonder who is buying all these houses at ludicrous prices which don`t appear to be on the market for long and it`s not the people I imagined - it`s young couples with familys - where are they geting the money from I do not know but somehow they appear to be securing finance for terraced cottages or whatever at 450K a throw - whether it`s Bank of Mum and Dad or not it all seems very bizarre ! Quote Link to comment Share on other sites More sharing options...
Mammon Posted October 6, 2009 Share Posted October 6, 2009 I think we will not see a HPC now depressing though that thought seems - someone is getting the money from somewhere - I walk around prosperous parts of North Cheshire and wonder who is buying all these houses at ludicrous prices which don`t appear to be on the market for long and it`s not the people I imagined - it`s young couples with familys - where are they geting the money from I do not know but somehow they appear to be securing finance for terraced cottages or whatever at 450K a throw - whether it`s Bank of Mum and Dad or not it all seems very bizarre ! I was bear at the end of last year. Then i started to see what you have just posted at the start of this year when interest rates were cut to 0.5%. Its was obvious back in Feb 2009 that a significant low was been set in the UK housing market. Quote Link to comment Share on other sites More sharing options...
JonnyTomes Posted October 6, 2009 Share Posted October 6, 2009 Which one? This one!!! Still confident the house market is back to normal? Lower volumes than post 90's crash. Higher prices than at what should have been the 2004 crash (were it not for mass fraud and mortgage-backed derivatives). What would your economics teacher have said about that? Quote Link to comment Share on other sites More sharing options...
Lepista Posted October 6, 2009 Share Posted October 6, 2009 This is no bull trap. House prices will be back to peak prices by the end of next year. You all had a chance to get in at 25% off at the agents, or 33% off at auction back at the start of this year. Now you will have to wait another 18 years for the next housing market cycle low. Have you seen the graph posted higher up...? Quote Link to comment Share on other sites More sharing options...
Mammon Posted October 6, 2009 Share Posted October 6, 2009 Have you seen the graph posted higher up...? Which one? Quote Link to comment Share on other sites More sharing options...
Lepista Posted October 6, 2009 Share Posted October 6, 2009 This one. House prices will be back to peak prices by the end of next year. now, can you tell me the rate of increase needed to get back to peak levels by next year...? Quote Link to comment Share on other sites More sharing options...
Mammon Posted October 6, 2009 Share Posted October 6, 2009 Volume in london will back 10,000 by the end of next year. I expect double digit house price growth in 2010, will take back to or very close to nominal peak prices. Quote Link to comment Share on other sites More sharing options...
BernieT Posted October 6, 2009 Share Posted October 6, 2009 This one!!! Still confident the house market is back to normal? Lower volumes than post 90's crash. Higher prices than at what should have been the 2004 crash (were it not for mass fraud and mortgage-backed derivatives). What would your economics teacher have said about that? that graph shows that house prices have gone back to 2007 levels - that is shocking Quote Link to comment Share on other sites More sharing options...
MississippiJohnHurt Posted October 6, 2009 Share Posted October 6, 2009 This is no bull trap. House prices will be back to peak prices by the end of next year. You all had a chance to get in at 25% off at the agents, or 33% off at auction back at the start of this year. Now you will have to wait another 18 years for the next housing market cycle low. Good luck with that one. Where do you think earnings to prices will end up - 200x salary or something? Quote Link to comment Share on other sites More sharing options...
Bearback Mountain Posted October 6, 2009 Share Posted October 6, 2009 Volume in london will back 10,000 by the end of next year. I expect double digit house price growth in 2010, will take back to or very close to nominal peak prices. When house prices get back up to your favoured level of nominal peak, where do you think they will keep going? Do you think that they will just keep going up forever, or do you think they will get to the most maxed out level of physical human affordability and then just stop and stay there? Quote Link to comment Share on other sites More sharing options...
Jim B. Posted October 6, 2009 Share Posted October 6, 2009 Volume in london will back 10,000 by the end of next year. I expect double digit house price growth in 2010, will take back to or very close to nominal peak prices. If you thought that through you would realise it's not possible. 2007 prices were what they were because of massive easy lending. You won't be able to get to those prices again in the current climate, or at least in the next 5 years I would think. Just think through logically waht you are saying. There is nothing to support these prices. This data is all skewed because of the low transaction levels. It doesn't paint a true picture. Quote Link to comment Share on other sites More sharing options...
Guest_FaFa!_* Posted October 6, 2009 Share Posted October 6, 2009 Volume in london will back 10,000 by the end of next year. I expect double digit house price growth in 2010, will take back to or very close to nominal peak prices. I take it you're buying? Quote Link to comment Share on other sites More sharing options...
ronpember Posted October 6, 2009 Share Posted October 6, 2009 This is great news for bears! The bull trap is in full swing. The global economy is in recovery! http://news.bbc.co.uk/1/hi/business/8290336.stm | http://news.bbc.co.uk/1/hi/business/8289407.stm New car sales are up! http://news.bbc.co.uk/1/hi/business/8292157.stm Consumer confidence is returning! http://news.bbc.co.uk/1/hi/business/8245488.stm Give it a few more months like this and things will finally be back to 'normal'! Nice try - unfortunately you're wrong. This is HPI, a precursor to wider inflation (but not wage inflation) which will make life very difficult for folk who have assets in cash (GBP). I bought a house in the summer and am very glad I did after two years on the sidelines. Time will reveal all but I am very confortable with my position. Quote Link to comment Share on other sites More sharing options...
Timm Posted October 6, 2009 Share Posted October 6, 2009 This is fun now. For any bears who were muted in their public warnings of a crash back in the pre crunch era, this is a second chance. While everyone else is screaming inflation (and everyone but everyone will be when RPI picks up in the current months), we have the chance to point at the deleveraging and make the opposite call. Quote Link to comment Share on other sites More sharing options...
yellerkat Posted October 6, 2009 Share Posted October 6, 2009 This is fun now. For any bears who were muted in their public warnings of a crash back in the pre crunch era, this is a second chance. While everyone else is screaming inflation (and everyone but everyone will be when RPI picks up in the current months), we have the chance to point at the deleveraging and make the opposite call. Not long now. (Graphic from FreeTrader.) Quote Link to comment Share on other sites More sharing options...
ad9898 Posted October 6, 2009 Share Posted October 6, 2009 This is fun now. For any bears who were muted in their public warnings of a crash back in the pre crunch era, this is a second chance. While everyone else is screaming inflation (and everyone but everyone will be when RPI picks up in the current months), we have the chance to point at the deleveraging and make the opposite call. Spot on, the government has backed the country into a corner, a debt driven collapse- resolved by adding more debt and making it as cheap as is possible to service, then encouraging the hard of thinking to take on that debt and buy into property, this isn't going to end well. The corner we are backed into is between a rock and a hard place, On one side the rock- massive public and private debt that is being added to at a rate of £6000 per second. On the other side, the hard place- We are unable to reduce debt servicing costs any further, and a real possibility of those costs either going up, or being forced up by the markets. Sh*t will be hitting the fan shortly. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted October 6, 2009 Share Posted October 6, 2009 Nice try - unfortunately you're wrong. This is HPI, a precursor to wider inflation (but not wage inflation) which will make life very difficult for folk who have assets in cash (GBP). I bought a house in the summer and am very glad I did after two years on the sidelines. Time will reveal all but I am very confortable with my position. And another one. Quote Link to comment Share on other sites More sharing options...
silver lining Posted October 6, 2009 Share Posted October 6, 2009 And another one. Soon the majority. Quote Link to comment Share on other sites More sharing options...
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