Is Anyone Slowly Going Mad With Trying To Sell A House?

[leicestersq]

This guy isnt wrong. If he turns around you would probably see it.

[winkie]

Most of the property thread is about people unable to sell houses as opposed to twigs in vases.

I thought there was a shortage of property. ....how will the developers sell the new build boxes built on postage stamps if others in established communities can't sell.....is there a shortage of property or not? There is plenty of property but few will buy at the inflated prices.

Edited September 8, 2011 by winkie

[_w_]

I'm not so sure. If you flog through the entire thread you'll see that very few of them HAVE to sell - they WANT to sell because they've got 2 kids and only two bedrooms (this would have been the height of luxury for most of history!) or they have an inconveniently long commute, but they don't HAVE to. And as long as they don't have to, there will be a point where they decide to manage with what they've got. The kids can share until they're 10 if different sexes, forever if same. Even if you do have to give them separate room, until they are mid-teens they are going to be going to bed earlier than their parents - how about investing £2000 in a really super-duper top of the range sofa bed & Mum & Dad sleep in the living room? not ideal, but a damn sight cheaper.

Ditto the garden - a big, well-appointed garden shed with an electricity supply takes the pressure off the house at a fraction of the cost of moving.

And so on ... unless you can't pay the mortgage and are being evicted (just isn't happening at present) or have to bolt because of domestic violence, say, the market is going to coninue being sticky. The only thing that would really get things moving is foreclosures, such as have happened in the U.S.

It's true but there is another side to this: if they don;t sell they won't be buying either. Doing more with less means the relative supply of housing is increasing. It should push prices down.

[erranta]

It's true but there is another side to this: if they don;t sell they won't be buying either. Doing more with less means the relative supply of housing is increasing. It should push prices down.

Snip-it

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Sept 8 2011 US 'Investment' article

If true, that spells trouble for the nation’s home builders. Those who haven’t done so should follow Taylor Wimpey‘s lead and amass sufficient capital to weather a 30% fall in house prices.

Average home prices should be around 3 times to 3.5 times annual household income, but in Britain they are still more than four times the mean wage. Yet consensus estimates for the house building industry imply a 3% average rise in house prices for 2012.

That’s despite indications from the Institute for Fiscal Studies that household incomes are actually falling. Combine all that with fiscal austerity, the absence of growth drivers and the historical tendency of prices to sharply over-correct, and the headwind becomes all too apparent.

Since 2007, a 1% fall in house prices has corresponded to a 2.7% fall in volume (houses sold). That relationship is unlikely to be linear, but if past trends offer any indication, a 30% fall in house prices could lead to a short term 80% fall in volume.

[Read the full article at www.dowjones.com/ib/]

[cartimandua51]

There were more foreclosures in 2009 (when prices rose) than in 2008 (when prices fell). Explain.

I expect the overall numbers are low, so possibly not statistically significant anyway, but casting my mind back (I bought my first house in 1973, so I've seen a few cycles!) foreclosures rose in 1996 ish when prices were climbing out of the post 88 crash because people were no longer in negative equity to such a degree so it was worthwhile the lenders leaning on them and grabbing the property back, which it wasn't in the early 90's.

[The Masked Tulip]

Snip-it

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Sept 8 2011 US 'Investment' article

If true, that spells trouble for the nation’s home builders. Those who haven’t done so should follow Taylor Wimpey‘s lead and amass sufficient capital to weather a 30% fall in house prices.

Average home prices should be around 3 times to 3.5 times annual household income, but in Britain they are still more than four times the mean wage. Yet consensus estimates for the house building industry imply a 3% average rise in house prices for 2012.

That’s despite indications from the Institute for Fiscal Studies that household incomes are actually falling. Combine all that with fiscal austerity, the absence of growth drivers and the historical tendency of prices to sharply over-correct, and the headwind becomes all too apparent.

Since 2007, a 1% fall in house prices has corresponded to a 2.7% fall in volume (houses sold). That relationship is unlikely to be linear, but if past trends offer any indication, a 30% fall in house prices could lead to a short term 80% fall in volume.

[Read the full article at www.dowjones.com/ib/]

Can you post the full link as cannot find the article on that rather bizarre IMPO site.

[erranta]

Can you post the full link as cannot find the article on that rather bizarre IMPO site.

Prob. need an account

Here's Wall St Journal blog > link

http://blogs.wsj.com/source/2011/09/08/u-k-house-builders-need-to-ponder-armageddon/

[The Masked Tulip]

Prob. need an account

Here's Wall St Journal blog > link

http://blogs.wsj.com/source/2011/09/08/u-k-house-builders-need-to-ponder-armageddon/

Thanks. Interesting, he reckons a 30% fall in house prices will lead to a 80% fall in volume and hence the builders will be stuffed.

From where we stand now 30% would be a wet dream for HPC and it looks very unlikely as much as we might want it.

Interesting about TW building up a war-chest for such a 30% fall though.

[Mr. Piddle]

I thought there was a shortage of property. ....how will the developers sell the new build boxes built on postage stamps if others in established communities can't sell.....is there a shortage of property or not? There is plenty of property but few will buy at the inflated prices.

There is no shortage of homes, just a shortage that the majority can actually afford to buy.

[qwerty1984]

Thanks. Interesting, he reckons a 30% fall in house prices will lead to a 80% fall in volume and hence the builders will be stuffed.

From where we stand now 30% would be a wet dream for HPC and it looks very unlikely as much as we might want it.

Interesting about TW building up a war-chest for such a 30% fall though.

A 30% fall would mean very high interest rates and unemployment rates.

Some folk could exploit this, but many others would still be stuck in their mother's basement counting their little pile of gold and posting here about how unfair it all is.

['Bart']

Well FWIW I think the "end of times" is coming.

Something very big and very unpleasant is on the way IMO.

If we stumble and bumble and fudge our way to the end of 2012 without a global economic crisis I will be amazed.

[_w_]

A 30% fall would mean very high interest rates and unemployment rates.

Just like Japan.

[Fishbone Glover]

The only way those without could change things would be to take it by force. And IMO it won't happen. Too much passivity and too many loud threats (and execution) of massive retaliation if you so much as protest.

I don't think it'll come to that. There will be a point, and I think it will be relatively soon, when those with the wealth realise that it's going to be better to surrender some of their wealth voluntarily, or risk either having it taken by force, or it becoming worthless as no-one can afford to buy the products of the companies in which they've invested, for example.

This kind of self-enlightenment has started, with various groups of uber-wealthy people from around the world asking to be taxed more (cf. Warren Buffet and others).

Without the mass market, there is a reduction in wealth for everybody. I also wouldn't rule out things being taken by force - IMO those riots were just the beginning, I know plenty of people that are pissed off with the current situation, all you need is a tipping point. History shows that these tipping points are unpredictable, but they can happen very quickly and change things beyond all recognition. If enough people get involved, and it becomes a genuinely political movement, rather than shopping with violence, there's no way the authorities could deal with it.

Edited September 8, 2011 by Fishbone Glover

[NEO72]

A 30% fall would mean very high interest rates and unemployment rates.

Some folk could exploit this, but many others would still be stuck in their mother's basement counting their little pile of gold and posting here about how unfair it all is.

Do you have any evidence for this.

Whatsoever.

(Not for a second suggesting this is utterly foundationless supposition of the kind employed by second-grade estate agents).

[_w_]

I don't think it'll come to that. There will be a point, and I think it will be relatively soon, when those with the wealth realise that it's going to be better to surrender some of their wealth voluntarily, or risk either having it taken by force, or it becoming worthless as no-one can afford to buy the products of the companies in which they've invested, for example.

This kind of self-enlightenment has started, with various groups of uber-wealthy people from around the world asking to be taxed more (cf. Warren Buffet and others).

Without the mass market, there is a reduction in wealth for everybody. I also wouldn't rule out things being taken by force - IMO those riots were just the beginning, I know plenty of people that are pissed off with the current situation, all you need is a tipping point. History shows that these tipping points are unpredictable, but they can happen very quickly and change things beyond all recognition. If enough people get involved, and it becomes a genuinely political movement, rather than shopping with violence, there's no way the authorities could deal with it.

The two things that will tell us which direction we take are:

- The police, will they be here to protect us or to oppress us?

- And the justice system, will they protect us from the elite or protect them from us. Was that 3 months that guy got for stealing a bottle of water?

The process is well engaged IMO, this has been going on for a long time at least as far as the police goes. I see only one direction and it point to oppression. Time will tell but the way things are going now contradict your thesis.

Oh, and I wouldn't be satisfied by what a few wealthy people say on the news; the fact is they don't pay taxes and that is what they lobbied for. One or two might regret their past abusive practices but as for the rest, 'the time for remorse... never was and never will be'.

[24gray24]

I have no doubt the Americans will start using their guns to shoot bankers.

Once you have lost your home, your job, probably your wife and children, and are sitting in a tent with only your guns, it doesn't take much to start shooting.

All this talk about growth restarting, so that wages catch up with house prices is fantasy. The politicians won't be able to keep everything calm once austerity makes people go hungry. Trying to fiddle the whole economy, so house prices don't fall much, isn't going to work, because wages will fall faster. Sooner or later the QE music stops, the banks go bust and prices fall off a cliff.

And as for the police, forget them. They will disappear once they aren't being paid. And meanwhile, they don't have any prison places to spare (propaganda apart). In order to keep the water bottle guy in gaol for a month, they will have to release an armed robber immediately. So don't worry about the law, it's a paper tiger.

I don't think it will turn into Mad Max/Argentina 1990 in the UK, but in the US it's 50-50 IMO. The other 50 is 10,000 bankers going to gaol, how likely is that?

[Neverland]

I have no doubt the Americans will start using their guns to shoot bankers.

Once you have lost your home, your job, probably your wife and children, and are sitting in a tent with only your guns, it doesn't take much to start shooting.

[...]

And as for the police, forget them. They will disappear once they aren't being paid. And meanwhile, they don't have any prison places to spare (propaganda apart). In order to keep the water bottle guy in gaol for a month, they will have to release an armed robber immediately. So don't worry about the law, it's a paper tiger.

I don't think it will turn into Mad Max/Argentina 1990 in the UK, but in the US it's 50-50 IMO. The other 50 is 10,000 bankers going to gaol, how likely is that?

So now that we have had the "coming mad max apocalypse" post - has this thread jumped the shark?

[notnow]

So now that we have had the "coming mad max apocalypse" post - has this thread jumped the shark?

Hi, Back to reality. I realise there are a thousand opinions about selling dificulties, but as an old git who bought first in 1977, £10k, sold for £18k 2 year later. Bought for £20k sold for £21k one year later, then bought for £26k, sold for £145k 13 years later, then bought for £150k , sold for £295k 7 years later, with mortgage paid off due to massive increases in value of linked endowment, I was part of an experienced that so many had , the feeling throughout my life was , quick, buy that house before it goes up again, but now? My generation has ruined it for everybody else. 100% mortgages indeed, what were we thinking?

I wish that I and everybody else could have more of an experience like that, but the truth is, you cannot sell as the bubble has burst, and when I look long term, I really hope my kids value life more than property. i hope they see sense and rent, until they can buy a house easily without stress or worry for the future. When they have a job for life, like my generation did. Its going to be a long wait.

Except in London, of course, where you are all still property bonkers !

[Terribad]

Hi, Back to reality. I realise there are a thousand opinions about selling dificulties, but as an old git who bought first in 1977, £10k, sold for £18k 2 year later. Bought for £20k sold for £21k one year later, then bought for £26k, sold for £145k 13 years later, then bought for £150k , sold for £295k 7 years later, with mortgage paid off due to massive increases in value of linked endowment, I was part of an experienced that so many had , the feeling throughout my life was , quick, buy that house before it goes up again, but now? My generation has ruined it for everybody else. 100% mortgages indeed, what were we thinking?

I wish that I and everybody else could have more of an experience like that, but the truth is, you cannot sell as the bubble has burst, and when I look long term, I really hope my kids value life more than property. i hope they see sense and rent, until they can buy a house easily without stress or worry for the future. When they have a job for life, like my generation did. Its going to be a long wait.

Except in London, of course, where you are all still property bonkers !

Can I have some money please

[Diver Dan]

A few years and they can buy their 'forever' house when prices pick up

Here are some "forever houses" located in the 20th Arrondissment in Paris.

[Fishbone Glover]

- The police, will they be here to protect us or to oppress us?

- And the justice system, will they protect us from the elite or protect them from us. Was that 3 months that guy got for stealing a bottle of water?

The process is well engaged IMO, this has been going on for a long time at least as far as the police goes. I see only one direction and it point to oppression. Time will tell but the way things are going now contradict your thesis.

Again, look back to the riots in August. The Police struggled to contain them, just imagine what might have happened if twice the number of people had turned out. Then imagine all those people being mad as hell and politically motivated, rather than just after free stuff. Do you think a night of rain would stop them?

I hope it never comes to that though. I hope that all levels of society have a cultural and intellectual revolution, and make the world a better, fairer, place with a more even allocation of wealth.

[cartimandua51]

I don't think it'll come to that. There will be a point, and I think it will be relatively soon, when those with the wealth realise that it's going to be better to surrender some of their wealth voluntarily, or risk either having it taken by force, or it becoming worthless as no-one can afford to buy the products of the companies in which they've invested, for example.

This kind of self-enlightenment has started, with various groups of uber-wealthy people from around the world asking to be taxed more (cf. Warren Buffet and others).

Back to the wealthy elite providing bread and circuses - not much has changed since Ancient Rome!

Edited September 9, 2011 by cartimandua51

[kazap]

Except in London, of course, where you are all still property bonkers !

I bought a detached "forever" family property in Zone 5 London last year. It cost a lot as you can imagine . But as a grad Gen Y couple who both want careers, had already been working for a few years, earn reasonable graduate wages (not big money though) it seemed a fair price. I don't feel like I've sold my soul. Our mortgage is about 40% of household income which of course breaks the arbitary 1/3 rule but isn't too far off.

The big expense right now is childcare - not cheap round these parts. I tell ya, if you think mortgages are expensive you ain't seen nothing yet, just wait til you need a nursery!! But we still have money left over to save.

I'm really interested in 'then and now' stories, but I don't see our lifestyle that different from my parents. The big one is that my Ma did secretarial work, whereas my Mrs is a professional (teacher). So I guess our earning potential is more than my folks, but surely this is just a natural adjustment that reflects the post-feminist world? Times have changed.

Mortgage rates are the other thing. My Pop will delight in telling you about the 10% or whatever he had to pay at one point. Me and my Mrs are considering locking in one of the <4% ten year deals to keep things under control until the kids are at school and childcare costs are gone. At that point we would have had 10 years of wage rises, perhaps promotions? I might get the odd bonus to put towards the mortgage (typically 5% in my line of work). Who knows!

I get that not everyone out there is in our position, we are fortunate although got to this position through a hell of a lot of hard work. But I just don't think the picture is as bleak as people imagine. If prices were 50% less we'd have rediculous amounts of disposable income. I'd be driving a Jag and jetting off round the world twice a year. But that doesn't seem right, my Mrs is a teacher, I do a bit of IT work, I just don't think we should be that wealthy.

We have simple tastes, we have afforded a house, a child, we go to work, we come home, we go on a holiday once a year, retire in our 60's - but this is exactly what my parents did! In fact when it comes to creature comforts we are way better off - they didn't have the computers, phones, utilities, foreign travel, etc we take for granted. All of which have a cost.

I do realise we are fortunate but I just don't see that my life / opportunities have been that different to my folks. Sure, I had to study hard, I'll have to work hard for years to come and all the rest but what generation hasn't had to do this?

Maybe its cos im special

[culvers]

I bought a detached "forever" family property in Zone 5 London last year. It cost a lot as you can imagine . But as a grad Gen Y couple who both want careers, had already been working for a few years, earn reasonable graduate wages (not big money though) it seemed a fair price. I don't feel like I've sold my soul. Our mortgage is about 40% of household income which of course breaks the arbitary 1/3 rule but isn't too far off.

The big expense right now is childcare - not cheap round these parts. I tell ya, if you think mortgages are expensive you ain't seen nothing yet, just wait til you need a nursery!! But we still have money left over to save.

I'm really interested in 'then and now' stories, but I don't see our lifestyle that different from my parents. The big one is that my Ma did secretarial work, whereas my Mrs is a professional (teacher). So I guess our earning potential is more than my folks, but surely this is just a natural adjustment that reflects the post-feminist world? Times have changed.

Mortgage rates are the other thing. My Pop will delight in telling you about the 10% or whatever he had to pay at one point. Me and my Mrs are considering locking in one of the <4% ten year deals to keep things under control until the kids are at school and childcare costs are gone. At that point we would have had 10 years of wage rises, perhaps promotions? I might get the odd bonus to put towards the mortgage (typically 5% in my line of work). Who knows!

I get that not everyone out there is in our position, we are fortunate although got to this position through a hell of a lot of hard work. But I just don't think the picture is as bleak as people imagine. If prices were 50% less we'd have rediculous amounts of disposable income. I'd be driving a Jag and jetting off round the world twice a year. But that doesn't seem right, my Mrs is a teacher, I do a bit of IT work, I just don't think we should be that wealthy.

We have simple tastes, we have afforded a house, a child, we go to work, we come home, we go on a holiday once a year, retire in our 60's - but this is exactly what my parents did! In fact when it comes to creature comforts we are way better off - they didn't have the computers, phones, utilities, foreign travel, etc we take for granted. All of which have a cost.

I do realise we are fortunate but I just don't see that my life / opportunities have been that different to my folks. Sure, I had to study hard, I'll have to work hard for years to come and all the rest but what generation hasn't had to do this?

Maybe its cos im special

Nice bit of self validation there

[Si1]

my Mrs is a teacher, I do a bit of IT work,

so you profitied from public sector and possibly finance (if in IT) bubbles paid for by the rest of us over the past decade in Broons' miracle boom

Nice bit of self validation there

yep