Ok, I'm Calling It... The Hpc Is Finally Here

[The Inside Man]

You probably can't see it yet, in many areas you probably can't even detect the change in sentiment that underpins it, but I believe that the HPC is finally here.

Why? Well, I think we now have the "perfect storm" that a number of people on here have been dreaming about for the past few years:

- Brown gone, no more print and spend to win votes.

- Austerity measures in the UK (and abroad) will destroy the "feel good feeling"

- Rising risks of sovereign and corporate default (look at ViX, CDS, ratings agencies, etc)

- Reducing lending from the banks in order to repair their balance sheets

- Rising unemployment here and abroad (yes, it's still rising, and will rise further as the public sector takes the hit)

- Increases in taxation (and more coming), equals less disposable income

- Increases in inflation... 3-5% (depending on your index) now, 8-10% by next year?

- Increased wage demands and industrial unrest as people genuinely find it hard to make ends meet

- Repossessions increasing, leading to more disposals and some truly "motivated sellers"

- Tighter lending limits, with more to come

- A massive rush of people to the market in order to cash out on rises before the fall

In short... economic conditions that are killing demand, with a glut of houses coming to the market that massively increases supply. The sales volumes and estate agent/righmove numbers show just this. And by the laws of basic economics there is only one direction in which prices will travel.... down (and down, and down).

I've been on here for years, watching and learning, and working inside two large banks during that time. I've picked up on many changes in sentiment over this time (including the feeling that things were amiss prior to Bear Stearns/Lehmans/HBOS), and I am sensing that feeling of doom once again. Directors are battening down the hatches, traders and fund managers are looking more stressed, and there is genuine fear in the eyes of some when you talk about Greece, Spain, Portugal and what would happen if they defaulted (i.e. how quickly it would bring down Britain based on the exposure of our state-run banks). We're at the edge of the world once again.

But why now (and I mean right now, not next month)?

Look at the prices. At the start of a fall there is always a precipice period, where houses that have been on the market start to get reduced but 20k, 50k or even 100k if they are "motivated". New houses to the market get no interest and "motivated" sellers drop quickly whilst those more stubborn hold out and their properties stick. You also start to see a few properties that look "good value" as they lower the floor price in a street by a reasonable amount (again, motivated sellers help).

So I am calling it now. Time to go on the record. As of May 2010 I believe the bounce is over and we'll start to see some real falls, maybe 7-10% by the end of this year, with another 10-15% overall next year as a minimum (i.e. about 25% down on today by the end of 2011).

For those people that have been wishing for falls this may be good news. But be careful what you wish for, as the next 18 months are not going to be fun, or even that palatable for some. In short I think we're in for a really rough ride.

Let's see.

T.I.M.

[homeless]

cant argue with any of that.

the good thing is though

when you have nothing you have nothing to lose.

bring it on as bad as it gets i dont care, the worse the better as far as im concerned

[ken_ichikawa]

But who says the Conlib alliance won't have the appetite to turn the printers on and this invalidate all of the above?

Printing to oblivion, it will buy them a few more years of it being OK and getting progressively worse.

[AteMoose]

I still think they will print no matter what... the currency has already crashed 30%

Edited May 26, 2010 by AteMoose

[TheCountOfNowhere]

You missed the fact that the country is full of idiots wanting to buy houses at stupid prices cause the TV tells them they cant loose.

House prices to go up for ever...or until idiots are no longer welcome at banks

[Timm]

Why exactly are you the inside man?

EDIT: Then I read the OP again....

Edited May 26, 2010 by Timm

[Guest_James Toney_*]

cant argue with any of that.

the good thing is though

when you have nothing you have nothing to lose.

bring it on as bad as it gets i dont care, the worse the better as far as im concerned

i agree too, the worse the better

[Guest theboltonfury]

cant argue with any of that.

the good thing is though

when you have nothing you have nothing to lose.

bring it on as bad as it gets i dont care, the worse the better as far as im concerned

An honest and interesting attitude. Possibly reflective of the circumstances of many of our residential doom mongers. If they can't have it then let's hope that no one else can either. And I don't mean just houses.

[GordonBrownSpentMyFuture]

cant argue with any of that.

the good thing is though

when you have nothing you have nothing to lose.

bring it on as bad as it gets i dont care, the worse the better as far as im concerned

Agreed.

[monks]

I still think they will print no matter what... the currency has already crashed 30%

They can't print and delay for 5 years, so would just be delaying the inevitable in time for the next election. Surely get the bad news out of the way in years 1-3, with stabilisation in year 4 and (hopefully) modest growth in year 5 to crow about ??

[57percent]

Agree with the OP. Everything now points to falls.

I don't think printing is an option with inflation rising and I don't think GBP will devalue

much further vs EUR/USD.

[Mega]

HPC is here..............

Agreed!

Judge to coments left in newspaper sites, EVERYONE has sussed it!

Mike

[interestrateripoff]

cant argue with any of that.

the good thing is though

when you have nothing you have nothing to lose.

bring it on as bad as it gets i dont care, the worse the better as far as im concerned

So you feel confident of surviving a mad max type scenario with a break down of law and order? Nothing doesn't actually exist, you clearly have something of value to loose your life.

[Laura]

I do wish some would keep up

I predicted 80% two years ago. Nearly there. However it will keep going down this (different) time.

As far as advocates of sound money are concerned, the UK housing market peaked in 2005. Since then it has fallen by more than 70%.

Yes, 70%. House prices are now at levels last seen in the early 1990s, at the bottom of the last bear market. The average house price is currently 25% below its average of the last 40 years.

http://www.moneyweek.com/investments/property/uk-house-prices-in-ounces-of-gold-02110.aspx

Got gold?

[DrMartinSanchez]

You missed the fact that the country is full of idiots wanting to buy houses at stupid prices cause the TV tells them they cant loose lose.

Nothing doesn't actually exist, you clearly have something of value to loose lose your life.

[foxy]

Look at the prices. At the start of a fall there is always a precipice period, where houses that have been on the market start to get reduced but 20k, 50k or even 100k if they are "motivated". New houses to the market get no interest and "motivated" sellers drop quickly whilst those more stubborn hold out and their properties stick. You also start to see a few properties that look "good value" as they lower the floor price in a street by a reasonable amount (again, motivated sellers help).

That is exactly what appears to be happening around here (South Staffs).

[TheCountOfNowhere]

Thanks.

These threads are starting to remind me of the 2007/2008 threads.....

Been here before.

[Pent Up]

You probably can't see it yet, in many areas you probably can't even detect the change in sentiment that underpins it, but I believe that the HPC is finally here.

Why? Well, I think we now have the "perfect storm" that a number of people on here have been dreaming about for the past few years:

- Brown gone, no more print and spend to win votes.

- Austerity measures in the UK (and abroad) will destroy the "feel good feeling"

- Rising risks of sovereign and corporate default (look at ViX, CDS, ratings agencies, etc)

- Reducing lending from the banks in order to repair their balance sheets

- Rising unemployment here and abroad (yes, it's still rising, and will rise further as the public sector takes the hit)

- Increases in taxation (and more coming), equals less disposable income

- Increases in inflation... 3-5% (depending on your index) now, 8-10% by next year?

- Increased wage demands and industrial unrest as people genuinely find it hard to make ends meet

- Repossessions increasing, leading to more disposals and some truly "motivated sellers"

- Tighter lending limits, with more to come

- A massive rush of people to the market in order to cash out on rises before the fall

In short... economic conditions that are killing demand, with a glut of houses coming to the market that massively increases supply. The sales volumes and estate agent/righmove numbers show just this. And by the laws of basic economics there is only one direction in which prices will travel.... down (and down, and down).

I've been on here for years, watching and learning, and working inside two large banks during that time. I've picked up on many changes in sentiment over this time (including the feeling that things were amiss prior to Bear Stearns/Lehmans/HBOS), and I am sensing that feeling of doom once again. Directors are battening down the hatches, traders and fund managers are looking more stressed, and there is genuine fear in the eyes of some when you talk about Greece, Spain, Portugal and what would happen if they defaulted (i.e. how quickly it would bring down Britain based on the exposure of our state-run banks). We're at the edge of the world once again.

But why now (and I mean right now, not next month)?

Look at the prices. At the start of a fall there is always a precipice period, where houses that have been on the market start to get reduced but 20k, 50k or even 100k if they are "motivated". New houses to the market get no interest and "motivated" sellers drop quickly whilst those more stubborn hold out and their properties stick. You also start to see a few properties that look "good value" as they lower the floor price in a street by a reasonable amount (again, motivated sellers help).

So I am calling it now. Time to go on the record. As of May 2010 I believe the bounce is over and we'll start to see some real falls, maybe 7-10% by the end of this year, with another 10-15% overall next year as a minimum (i.e. about 25% down on today by the end of 2011).

For those people that have been wishing for falls this may be good news. But be careful what you wish for, as the next 18 months are not going to be fun, or even that palatable for some. In short I think we're in for a really rough ride.

Let's see.

T.I.M.

I think you may be a tad early in calling HPC itself. I think we will not see the highs of febuary again that was the peak and I expect mays nationwide figure to be negative. but I don't think we are full speed crash yet.

The problem with a HPC is you won't know for sure it's happening until we are right in the middle of it. Ie. Consecutive negative figured from all major indicies.

[Dorkins]

An honest and interesting attitude. Possibly reflective of the circumstances of many of our residential doom mongers. If they can't have it then let's hope that no one else can either. And I don't mean just houses.

Spoken like someone on the other side of the generational divide.

I don't want to see people homeless and begging on the streets, I just want the cost of living (especially housing) to bear some relation to what ordinary people earn. Unfortunately there are a lot of people whose future plans depend on wages staying low while the cost of living remains high (e.g. BTL speculators who think they can sell an ordinary house for 10 times the average gross wage). It's time for those plans to meet arithmetical reality. It will be painful for some, but better for millions more.

[lets get it right]

Risky!

[Fishman]

I expect a further period of an H.I.S. (head in sand) market.

An HPC (and I mean a proper one not just an odd 10-15%) is too frightening to contemplate.

Banks will come down, sterling will crash, the Gov't will fall and tax payers will be on the hook for billions.

I'm afraid if it's a choice of affordable x3 salary housing or keeping the banks going, then I know which one my

money is on......

[Goat]

I think you may be a tad early in calling HPC itself. I think we will not see the highs of febuary again that was the peak and I expect mays nationwide figure to be negative. but I don't think we are full speed crash yet.

I think we've all been here long enough to know that predictions over next 3 months, or even over the next 12 months are pretty much guaranteed to be wrong.

[Soul Reaver]

You probably can't see it yet, in many areas you probably can't even detect the change in sentiment that underpins it, but I believe that the HPC is finally here.

Why? Well, I think we now have the "perfect storm" that a number of people on here have been dreaming about for the past few years:

- Brown gone, no more print and spend to win votes.

- Austerity measures in the UK (and abroad) will destroy the "feel good feeling"

- Rising risks of sovereign and corporate default (look at ViX, CDS, ratings agencies, etc)

- Reducing lending from the banks in order to repair their balance sheets

- Rising unemployment here and abroad (yes, it's still rising, and will rise further as the public sector takes the hit)

- Increases in taxation (and more coming), equals less disposable income

- Increases in inflation... 3-5% (depending on your index) now, 8-10% by next year?

- Increased wage demands and industrial unrest as people genuinely find it hard to make ends meet

- Repossessions increasing, leading to more disposals and some truly "motivated sellers"

- Tighter lending limits, with more to come

- A massive rush of people to the market in order to cash out on rises before the fall

In short... economic conditions that are killing demand, with a glut of houses coming to the market that massively increases supply. The sales volumes and estate agent/righmove numbers show just this. And by the laws of basic economics there is only one direction in which prices will travel.... down (and down, and down).

I've been on here for years, watching and learning, and working inside two large banks during that time. I've picked up on many changes in sentiment over this time (including the feeling that things were amiss prior to Bear Stearns/Lehmans/HBOS), and I am sensing that feeling of doom once again. Directors are battening down the hatches, traders and fund managers are looking more stressed, and there is genuine fear in the eyes of some when you talk about Greece, Spain, Portugal and what would happen if they defaulted (i.e. how quickly it would bring down Britain based on the exposure of our state-run banks). We're at the edge of the world once again.

But why now (and I mean right now, not next month)?

Look at the prices. At the start of a fall there is always a precipice period, where houses that have been on the market start to get reduced but 20k, 50k or even 100k if they are "motivated". New houses to the market get no interest and "motivated" sellers drop quickly whilst those more stubborn hold out and their properties stick. You also start to see a few properties that look "good value" as they lower the floor price in a street by a reasonable amount (again, motivated sellers help).

So I am calling it now. Time to go on the record. As of May 2010 I believe the bounce is over and we'll start to see some real falls, maybe 7-10% by the end of this year, with another 10-15% overall next year as a minimum (i.e. about 25% down on today by the end of 2011).

For those people that have been wishing for falls this may be good news. But be careful what you wish for, as the next 18 months are not going to be fun, or even that palatable for some. In short I think we're in for a really rough ride.

Let's see.

T.I.M.

I can pretty much see this myself.

Today I lost my house

Tommorow I might lose my shirt

The day after the hounds of hell will be loosed on society

Things will be really loose from then on

After that we all lose

Just for those that don't know the difference between lose and loose

[Danny Deflation]

i agree too, the worse the better

You're renting, then?

Edited May 26, 2010 by Danny Deflation

[50sQuiff]

You're renting, then?

Laughing out loud at your signature