Ft Article: Spins In Need Of A Doctor

[Guest consa]

The obsession could perhaps best be encapsulated by housepricecrash.co.uk, a website devoted entirely to the question of when and how the bubble would burst. This website has a host of graphs, articles and links on the subject of house prices and has 15 million hits every month - or 8,500 unique users a day. It is run by half a dozen people, all of whom have day jobs, as a non-profit enterprise. Its founder, a fund manager called Greg Sutton, is 30 but looks older.

Over a pint of lager at a faux-Irish pub in the City of London, Sutton freely admits why he set up the website more than three years ago: because he cannot get on the housing ladder. He and his wife, who live in Ealing, have been waiting in vain for years for prices to fall so that they can buy their own house in the west London suburb.

”I set it up because I am a frustrated first-time buyer, I have a job earning a reasonable amount of money and can’t buy a house at these prices,” he says.

With him is a lawyer, Reinhard Schu, 37, who acts as the website’s spokesman. Schu’s conviction is also partly driven by personal reasons, although they are the converse of Sutton’s. He sold his home two years ago because he was certain that there would be a property crash. Now he would like to be proved right.

It is clear that they are both convinced that strong economic arguments underpin an impending crash. “In our opinion house prices have gone to a truly unsustainable level. They are truly overvalued. There is a very strong group of vested interests, such as estate agents and mortgage companies, and people who make DIY programmes,” says Schu. “We were facing a recession in 2001, but the government lowered interest rates, so the Brits spent their way out of the recession. It was in their [Labour’s] interests to create a bubble.”

http://news.ft.com/cms/s/c85003f2-25a9-11d...000e2511c8.html

http://news.google.co.uk/news?q=house%20pr...lr=&sa=N&tab=wn

Edited September 17, 2005 by consa

[Guest struthitsruth]

15 million hits every month - or 8,500 unique users a day

. . . . impressive stuff.

I for one think the site is really good, well designed and maintained, and an education in ecomomics and monetary policy as well as a great laugh - some of the classic threads are worth re-visiting from time to time, they just have me rolling on the floor . . . .

Well done to the WM and moderators, it's been a great success so far.

The tone of the article's a bit off in parts isn't it -

a faux-Irish pub in the City of London

- and his point is ????

[Nelly]

  - and his point is  ????

<{POST_SNAPBACK}>

to make himself sound clever

[Guest consa]

This is the most important bit:-

Its founder, a fund manager called Greg Sutton, is 30 but looks older.

[Guest Riser]

I have read the article just once in an attempt to pick up the signals the average reader may pick up, here is my interpretation:

Over half the article focuses on how, over the past ten years many so called experts and journalists have predicted the top of the housing market only to be proved wrong. If you had listened to these doom mongers in the past then you would have missed out on the latest housing boom.

The experts are now so sick of being proved wrong they have gone quiet and the rally is now being led by a small group of ordinary guys who we met down the pub. They have set up a website with lots of links to information related to house prices.

The webmaster is called Greg he is 30 but looks older, implication he spends far too much time worrying about house prices than getting a life. They sometimes get together and meet in a pub, note second reference to pub, implication real experts don't meet in a pub,. Around twenty of them will meet, implies real strength of support more significant than website stats, to discus the housing market, sounds a bit like the recent fuel protests which turned out to be a damp squib.

They are not concerned at being wrong in their predictions of a cash in 2002 because they think it will have just made things worse when the crash does eventually come. Some real experts agree although they don't want to shout about it because they have been wrong in the past.

Maybe now is the time to sell your house because the last pessamist has given up, all but a bunch of eccentric guys who you could meet down the pub that is.

By the way if the crash does come just remember we also predicted it here in FT

Its good that HPC gets a mention even if it is in a derisory tone. Never trust journalists they all clever arsoles who always have their own agenda.

Edited September 17, 2005 by Riser

[classixuk]

That's great news. There's no such thing as bad publicity for a site like this!

Well done Greg, and everyone be sure to bookmark Consas site over at ************ as the bandwidth here is sure to be maxxed out with all the new FT readers logging on later today!

[Guest consa]

THe article should bring quite a few new visitors here.

Welcome!

And check the charts on the front page of: http://www.HousePriceCycle.com

BTW:

"In need of a Doctor"? 

What do they have in mind?  There IS a Dr. in this House

<{POST_SNAPBACK}>

Care to whirl this through your spin machine Doc?

[homeless]

nice to see the site in the papers, if only to make me think im not spending my time with a bunch of weird guys in some fringe group out there on the edges of cyberspace.

[Guest horace]

Quoted from post #6

"They are not concerned at being wrong in their predictions of a crash in 2002 because they think it will have just made things worse when the crash does eventually come. "

unquote.

`They` sound remarkably like Jenovah Witnesses who have been hopelessly wrong at predicting the end of the world which they said would occur in 1949,1952,1954 etc.

Back to the drawing board.

horace.

Edited September 17, 2005 by horace

[Guest Riser]

Quoted from post #6

"They are not concerned at being wrong in their predictions of a crash in 2002 because they think it will have just made things worse when the crash does eventually come. "

unquote.

`They` sound remarkably like Jenovah Witnesses who have been hopelessly wrong at predicting the end of the world which they said would occur in 1949,1952,1954 etc.

Back to the drawing board.

horace.  

<{POST_SNAPBACK}>

The end of the world will happen just once, we have already seen three previous house price crashes. Its not a case of if, just when, and the first signs are already here.

House Price Cycles - Nationwide Data

Edited September 17, 2005 by Riser

[Dicky]

`They` sound remarkably like Jenovah Witnesses who have been hopelessly wrong at predicting the end of the world which they said would occur in 1949,1952,1954 etc.

Back to the drawing board.

horace. 

<{POST_SNAPBACK}>

Who's JENOVAH is he a friend of yours.

[RichM]

It's a funny (as in strange) article. To be fair, he does sound a little sceptical of Wrigglesworth et al., but the comment about WM looking older than 30 is silly.

The list of bearish comments is very, very long, but someone saying "crash" in 1997 - and not just a property crash, from what I can tell - is stretching it too far.

The fact is we are in new territory (i.e. low IRs, high debt, very high house prices) and how the precise path ahead is difficult to predict. That said, the stats are definitely pointing in the right direction.

Welcome new readers!

[El_Pirata]

I think the author is somewhat unfair to a lot of the bears in this article.

Many did not so much call the top of the market as point out the frightening disconnect between prices and fundamentals.

A sensible government would paid heed to this, and would have taken action long ago to moderate bubble behaviour.

[Dicky]

I agree with that analysis, I think if you read it properly the article is actually poking fun at this website and implying that HPC is a geeks corner 

<{POST_SNAPBACK}>

My company is a geeks paradise and most earn x2 to x3 national average wage, geeks rule.

[OnlyMe]

We already have our great Doctor, The BigW himself, who himself believed property overvalued on fundamentals.

For any newbies around have a stab at the date of this quote. Oldies that already know the answer keep yer traps shut for a little while, this could be fun.

John Wriglesworth, a property expert, says: "The market is nearing its peak, so those who are not sure they want to hold on to their property for at least five years should sell now - it simply is not worth the risk that prices will fall."

[HPCheese]

And yet the pessimists’ time seems to have arrived at last.

Why (oh why) are people who predict a return to affordable housing always called pessimists? What's so pessimistic about more FTB'ers being able to get on the housing ladder, and the steps on the ladder shortening for those who already own their house?

Of course a price crash will be bad news for anyone who has foolishly released some of their new housing 'wealth' by remortgaging, or anyone who has recently speculated on property by buying-to-let. Money isn't free, and if you haven't earned it you shouldn't spend it.

A crash would be bad news for people who have overstretched themselves to buy recently, and that is sad, but they are in the minority.

Edited September 17, 2005 by HPCheese

[BandWagon]

It's traditional in a crowd mania that the people who stand up and disagree with the herd are regarded as crazies.

As usual, when the bubble bursts, you won't be able to find anyone who went along with the herd.

The clever TV celebs are currently planning their exit strategies (Sarah , while the fools are still urging the crowd on (Kirstie).

[sign_of_the_times]

Quoted from post #6

"They are not concerned at being wrong in their predictions of a crash in 2002 because they think it will have just made things worse when the crash does eventually come. "

unquote.

`They` sound remarkably like Jenovah Witnesses who have been hopelessly wrong at predicting the end of the world which they said would occur in 1949,1952,1954 etc.

Back to the drawing board.

horace. 

<{POST_SNAPBACK}>

fact : most of the posters on this site have been here less than 12 months, so how many predicted a crash in 2002 ? one person ??

clutching at straws horace you twerp......hpc is going mainstream, time to assume crash position

(oh, you best keep up those mortgage payments)

[miser]

I don't think there is doubt that we are a miniscule group set against an immense tidal wave of the general home owning population,a corrupt government and a greedy banking system.Just looking at the amount of equity release that has been splurged on this big spending spree alone is enough to make your toes curl.We cannot even imagine how desperate a good deal of these people must be now to keep this thing going and not to have it come crashing down.They don't care how much strain they put on anyone else to buy into it and sign their economic lives away on stupid amounts of money.All they see is the levels of debt they have now stupidly got into and it is finally frightening the life out of them..........

[Guest struthitsruth]

We already have our great Doctor, The BigW himself, who himself believed property overvalued on fundamentals.

For any newbies around have a stab at the date of this quote. Oldies that already know the answer keep yer traps shut for a little while, this could be fun.

John Wriglesworth, a property expert, says: "The market is nearing its peak, so those who are not sure they want to hold on to their property for at least five years should sell now - it simply is not worth the risk that prices will fall."

<{POST_SNAPBACK}>

I looked this Wriglesworth article up and you know what ? - in that same year I was thinking the same thing !

The author of today's article wants to but can't sit on the fence can he ?

Last summer, the FT’s new property correspondent wrote: “My guess is that in two years’ time they [prices] will be lower in real terms as once the momentum has drained away from the market, the balance of supply and demand will shift.”

The writer went on to say that some readers might think this unmitigated nonsense. “In which case, cut out this article and in a few years’ time, should I be proved wrong, feel free to visit the FT’s riverside offices where I will masticate my own words.”

As the author in question - and disliking the taste of newspaper - I have my fingers crossed.

Either Kirsty or Wriglesworth gets it then.

My money's still on Kirsty

[Guest Riser]

I don't think there is doubt that we are a miniscule group set against an immense tidal wave of the general home owning population,a corrupt government and a greedy banking system.Just looking at the amount of equity release that has been splurged on this big spending spree alone is enough to make your toes curl.We cannot even imagine how desperate a good deal of these people must be now to keep this thing going and not to have it come crashing down.They don't care how much strain they put on anyone else to buy into it and sign their economic lives away on stupid amounts of money.All they see is the levels of debt they have now stupidly got into and it is finally frightening the life out of them..........

<{POST_SNAPBACK}>

I believe HPC will have its day, it is already the best online forum discussing house prices and as the crash gathers pace it will become valuable reference point for journalists looking for a counterpoint to the increasingly desperate VI spin.

[Bear Goggles]

The article still refers to people who predict house prices will fall as 'Doom mongers'

We really must get away from the Orwellian mantra: 'Expensive houses good, cheap houses bad'

It annoys me more than anything else in this whole sorry affair. :angry: :angry: :angry:

I'll ask the question once again: Where is the doom in affordable housing?

[BandWagon]

When you look at housing you need to see the two components of the economic function.

One the first level a house provices a housing service, a place to live. The value of this service is determined by the price people are prepared to pay, ie the rental market.

Ideally we'd like rentals to go down, as we'd like the price of petrol and other goods and services to go down.

It improves our quality of life.

On another level a house provides a store of wealth, and this is where most people get all excited. They see their wealth store increasing, but don't realise that this is going to have a negative impact on their ability to buy a better house.

What happens now that the wealth store is declining in value?

Edited September 17, 2005 by BandWagon

[El_Pirata]

The article still refers to people who predict house prices will fall as 'Doom mongers'

We really must get away from the Orwellian mantra: 'Expensive houses good, cheap houses bad'

It annoys me more than anything else in this whole sorry affair. :angry:  :angry:  :angry:

I'll ask the question once again: Where is the doom in affordable housing?

<{POST_SNAPBACK}>

We need to counter this sinister use of language wherever we find it. I wrote to the Independent a while ago about this very phrase and they printed the letter, so sometimes complaining can do some good.

[malco]

The end of the world will happen just once, we have already seen three previous house price crashes. Its not a case of if, just when, and the first signs are already here.

House Price Cycles - Nationwide Data

<{POST_SNAPBACK}>

Can anyone explain why house price boom and bust did not happen before 1972? Is it anything to do with coming off the gold standard at that time? Is it something to do with the oil crisis setting up a perpetual pendulum effect in house prices that still swings today?

Edited September 17, 2005 by malco