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2buyornot2buy

Phase Of The Bubble

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I'm really interested to hear where everyone thinks we currently are in relation to the graph on phases of a financial bubble.

I've been considering this recently. I don't really think we've entered the fear phase yet but I'm very interested to hear your opinions.

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My feeling is that we are in the fear stage at the moment but a lot will hinge on the expected "spring bounce" ... if that falls flat then perhaps we may have some decent downwards pressure.

Anecdotally I am noticing far more asking price reductions through the Property Bee in my usual search as well as an uptick on the number of new listings.

One thing I noticed today is a 2-bed flat that I would consider buying has been put on the market at "OIRO 127,000" which was last sold Mar-07 for 144,950 ... now that is a decent reduction and that is the starting asking price (about 12%) against a sale value of 3 years ago. If it drops another 10k in the next few months I would actually consider a viewing and maybe a low offer offer of 110k. For information, it was also sold in Jul-00 for 79,950 and I use a 3% inflation per annum to work out what a place should be currently valued at given a reasonable start point (i.e. anything before about 2003!).

So, 79,950 (Jul-00 price) * 1.03 (for 3% inflation per annum) ^11 (11 years) = 110,669 ... if I thought I could get it for 110k I would be happy.

I should mention that this is one of tens of daily new listings and is not yet the norm ... I am not suggesting that things have fully turned in our favour ... ... ...yet!

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Anecdotal: Ex-landlady (we moved out in Jan - earlier than she planned - as she was taking the piss, looking for us to put up with endless work prepping for sale in May, without a penny off the rent). She was supposedly looking for a quick sale but didn't price that way ... anyway has dropped £95K so far (on £595k) and still AT LEAST £50k to go I reckon.

A decent fall in three months, though :). After having it on throughout 2006-2008 at a stupidly high price, she rented to us for two and a bit years 'while the market recovers'. Now she's effectively camping in an empty house waiting on it to sell (to save money as she has since retired, she moved back in but there's just a bed, no furniture - it must be quite painful not having our rent but having to pay council tax and her mortgage off savings). Though serves her right after the aggravation she put us through.

I suspect fear for her will set in rather earlier. Unless it shifts quickly at the new price - which I doubt.

Edited by montesquieu

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My wife told me yesterday that someone from her work (who knows we are watching the market) told her "prices are creeping up"

I aksed my wife to ask him how this is possible and he said "because it said so on the news and in the newspapers".

Comments like this makes me think we are still in the "people are thick" stage. Can people not see whats going around them!

Edited by pajd

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From Q3 2007 to Q2 2009 (first 21 Months) NI House prices fell roughly 90% of the total drops to date.

From Q3 2009 to Q4 2010 (next 18 Months) NI House Prices fell the remaining 10% of the drops to date.

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My wife told me yesterday that someone from her work (who knows we are watching the market) told her "prices are creeping up"

I aksed my wife to ask him how this is possible and he said "because it said so on the news and in the newspapers".

Comments like this makes me think we are still in the "people are thick" stage. Can people not see whats going around them!

I wouldn't be surprised if this was someone who is trying to sell their house at 2007 levels or someone who is sitting in negative equity trying to kid themselves that the market is rising.

Some ppl just dont get it ...

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From Q3 2007 to Q2 2009 (first 21 Months) NI House prices fell roughly 90% of the total drops to date.

From Q3 2009 to Q4 2010 (next 18 Months) NI House Prices fell the remaining 10% of the drops to date.

However, the last 18 months have prob seen the greatest realisation that house prices are falling.

Buyers have become more reluctant to purchase during this period as they expect further falls, from what I have read on this forum it would appear that even FTBers are becoming more reserved about entering the market at the min due more to prices than to the availability of credit ... but yet sellers remain stubborn and the 'asking prices' remain slowly dripping downwards.

I would imagine that the average selling price at present is most likely further than the additional 10% from 2009-2010 as reported, but these figures dont get published.

One of the most common phrases used at the minute is 'its a buyers market' ... where are all the buyers then?

EA's get a lot of stick on here and I am guilty of dishing it out at times, but I was informed recently by a friend who is trying to sell their house that the EA contacted them and told them they would need to reduce the asking price by £10-£15k .... but they refused. I suppose my only criticism of the EA is that they are obviously rolling over for the seller in these cases.

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I'm really interested to hear where everyone thinks we currently are in relation to the graph on phases of a financial bubble.

I've been considering this recently. I don't really think we've entered the fear phase yet but I'm very interested to hear your opinions.

I would agree but like others think we are getting closer. Using Nationwide figures, the attached graph would suggest to proponents of bubble theory that we had our bull trap last year and about to start the fear phase. Perhaps an interest rate rise to curb rampant inflation or the actual imposition of the govt austerity measures could be the catalyst to really change the current stagnation in the market.

Also, some might be interested in this short description of the property cycle.

Having been STR since Q3 2007, I am confident that a buying opportunity will arise for us in 12-18 months by which time houses will be half the price we sold for in nominal terms and considerably less in real terms as a cash buyer. It's been a frustrating wait at times, but the end game is nearing.

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I wouldn't be surprised if this was someone who is trying to sell their house at 2007 levels or someone who is sitting in negative equity trying to kid themselves that the market is rising.

Some ppl just dont get it ...

Close. I was told lastnight him and his mates bought into property a few years ago.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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