Housing Market Collapse Can't Be Far Off.

[dances with sheeple]

Pretty sure that they are of the minority. As far as a crash comes im pretty sure we have seen it already 2 years ago. I managed to land a 3 bed semi for 20% off original price,(Borderline repo) house next door but 2 went for 40k more than i paid in 2005-2006 and next door 20k in around 2009. I paid 80k it was originally on the market for 100k. in 2011..Im moving in with my girlfriend and have no intention of selling as rent demand is high in the area and will cover the mortgage (fixed at 5% until jan 14) and then some, had 3 offers already for renting but im still renovating till January..I suppose my point being there are plenty of people in good positions who do not need to sell

The housing market consists of those who need/want to sell and those who need/want/and can buy? People who don`t need to sell are neither here nor there, their house is losing value each time a similar house drops it`s price to sell, whether they are on the market or not?

[DungBeetle]

Where are you going?

Either US (California) or to work at the company HQ in Switzerland.

[dances with sheeple]

I'm hearing stories of homeowners asking to borrow money from neighbours. A relative was telling me how she was recently approached by a homeowner who lives at the top of the road to borrow £100 for a short term loan. Her answer was no. Got enough on paying their own bills. We'd already heard he'd borrowed from other neighbours, and thought they'd been too generous and trusting to have lent him bigger sums without any paperwork, but had no idea he'd then also come and then ask them for money. They barely know him.

Someone in financial difficulty, their hours cut and some years away from retirement, hogging a large house which should go to a family, and which an EA might put on market at £700K to begin with.

The people in good positions who don't need to sell have limited affect on the market. It only requires a certain level of increase in the number of people who experience more of a need to sell, with not enough buyers willing or able to afford their asking prices, where things get interesting for values. A crash can happen even with a majority of homeowners not requiring to sell.

Yeah, this guy needs to collect his 200k and go and live within his means in a house of a size appropriate to his needs

[stu2006]

I'm hearing stories of homeowners asking to borrow money from neighbours. A relative was telling me how she was recently approached by a homeowner who lives at the top of the road to borrow £100 for a short term loan. Her answer was no. Got enough on paying their own bills. We'd already heard he'd borrowed from other neighbours, and thought they'd been too generous and trusting to have lent him bigger sums without any paperwork, but had no idea he'd then also come and then ask them for money. They barely know him.

Someone in financial difficulty, their hours cut and some years away from retirement, hogging a large house which should go to a family, and which an EA might put on market at £700K to begin with.

The people in good positions who don't need to sell have limited affect on the market. It only requires a certain level of increase in the number of people who experience more of a need to sell, with not enough buyers willing or able to afford their asking prices, where things get interesting for values. A crash can happen even with a majority of homeowners not requiring to sell.

Yes, but again this will be a minority, ive never heard of any neighbours asking to borrow money to pay their mortgage..but again i agree with you about the crash which is why i said it has already happened.. i was holding out for a 50% crash but settled on the 20% i actually got off the current price or 34% I got from 2005-6 prices which was at peak

[dances with sheeple]

Yes, but again this will be a minority, ive never heard of any neighbours asking to borrow money to pay their mortgage..but again i agree with you about the crash which is why i said it has already happened.. i was holding out for a 50% crash but settled on the 20% i actually got off the current price or 34% I got from 2005-6 prices which was at peak

This is still not enough though for the majority to sell their house without further price cuts?

[Democorruptcy]

Either US (California) or to work at the company HQ in Switzerland.

OK, good luck with your escape plans.

[Tired of Waiting]

Either US (California) or to work at the company HQ in Switzerland.

Nice.

Well done.

[stu2006]

[/b]

This is still not enough though for the majority to sell their house without further price cuts?

maybe its not but it comes down to having to sell, if people are not forced then the houses aren't reduced ..with low interest rates people aren't forced unless they start losing their jobs. I am actually seeing an upturn in the distribution industry after a difficult period with cost cutting measures being relaxed along with recruitment bans being relaxed although it is still tight.

The young ones who cant afford a deposit are turning to renting and it wont surprise me if this is the way it goes for the forseeable future. Low interest rates and low wages so the people who have houses will just keep them and the younger generation will rent. It's only my opinion after watching the housing market for the last 8-9 years waiting for the right time to take the plunge.

There are far smarter people on here who will have a different opinion and there will also be the optimists like I was who are waiting for that 70% drop which i just cant see happening now as that kind of drop will only occur through a massive amount of forced sales that will bankrupt the country. My opinion maybe wrong at the end of the day no one really knows what will happen because if we did we'd all be millionaires

[Venger]

as that kind of drop will only occur through a massive amount of forced sales

It doesn't require massive amounts of forced sales. Prices can fall heavily with very little volume of transactions. Just as they did in 2008.

One or two sellers in a tight financial situation, on a road where all other homeowners own outright, £500,000 ish a house.

It only takes those sellers to reduce their asking prices and no one wanting to buy/trade up, then reduce again. If one seller accept an offer from a buyer at £350K, and the other seller £325K then all the other houses on the road have been downvalued too approximately the same amount. The new sales at lower prices affected the value of their homes.

You're right though, it does come down to people having to sell. Just that it might not take that many forced sellers for a crash, if supply overwhelms the low volume of transactions currently going through each month, and too few buyers in the market to buy or upsize. My bet is we've only got a small and diminishing pool of upsizers every month. A few more forced sellers...

[dances with sheeple]

maybe its not but it comes down to having to sell, if people are not forced then the houses aren't reduced ..with low interest rates people aren't forced unless they start losing their jobs. I am actually seeing an upturn in the distribution industry after a difficult period with cost cutting measures being relaxed along with recruitment bans being relaxed although it is still tight.

The young ones who cant afford a deposit are turning to renting and it wont surprise me if this is the way it goes for the forseeable future. Low interest rates and low wages so the people who have houses will just keep them and the younger generation will rent. It's only my opinion after watching the housing market for the last 8-9 years waiting for the right time to take the plunge.

There are far smarter people on here who will have a different opinion and there will also be the optimists like I was who are waiting for that 70% drop which i just cant see happening now as that kind of drop will only occur through a massive amount of forced sales that will bankrupt the country. My opinion maybe wrong at the end of the day no one really knows what will happen because if we did we'd all be millionaires

I think you are wide of the mark for a few reasons;

1) As I said above, it is only the actual sales that make the market, everyone else has to adjust their price downwards though. Unless we are to believe that everyone who owns a house has no reason to sell other than job loss, your scenario is ridiculous.

2) Why would someone who can`t scrape up a deposit rent? They will save more and faster at home with their parents, eventually picking up the ex-BTL when the "landlord" throws in the towel.

3) Most homeowners don`t have a mortgage, why would accepting that imaginary equity doesn`t really exist bankrupt the country? The country is already bankrupt anyway? The only way the country can recover is by houseprices dropping at least 50%.

The large numbers who will be downsizing, going into care, and dying over the coming years mean that an epic HPC is a given IMO.

[Number79]

The only way the country can recover is by houseprices dropping at least 50%.

I would be interested to know how you think that so much being wiped off the balance sheets would lead to a recovery.

I dont mean what would be healthy and good news for you and I, I mean real life

[Venger]

I would be interested to know how you think that so much being wiped off the balance sheets would lead to a recovery.

I dont mean what would be healthy and good news for you and I, I mean real life

Whose balance sheets? Banks or owners.

I would have thought the banks could write new mortgages at lower prices, on all those homes owned outright. To make money. Recovery coming from people able to better afford to trade up and still have some money to spend in the economy, compared to current house prices. I can't see any upside for the banks with so many homes owned outright.

As it's older owners who tend to own outright, and who've seen their homes rise the most, lending at lower house prices, falling prices hopefully bringing out more sellers relying on their homes for their pensions, must be better for the banks than no lending at all.

All the banks' existing borrowers have to do is pay their debts on whatever they chose to buy... £300K terraces of £300K shared ownership flats. If they can't, then they can experience the 'real life' situation many of us have suffered though whilst they bid up house prices to insane levels. The banks see losses but they can write new mortgages to new buyers at lower prices.

FT snippet from 17th September: "Over half to own home outright by 2014"

The rising proportion of outright homeowners, currently representing 47 per cent of homeowners, reflects the difficulty faced by new buyers in getting mortgages along with the trend for 1960s baby boomers to take advantage of low interest rates to pay off their debt.

[eric pebble]

Not just london. Got called specially and offered this today.

http://www.prospect.co.uk/property-details/wainwright-close/wokingham

Apparently was on at £600k, sale has fallen through near to completion on the new place, has been reduced and will take offers of 'just' £500k.

Oh and it's 100 metres from the motorway.

£600k who do these people think they are?

I think not.

Insanity:

I know of a retired couple who had to take off £750,000 from the original asking price to sell their large house in W Sussex - after 2 years effort.....

AND - I know a guy who has not been able to sell his former parents' home in the West Country - [they both died] - for TWO YEARS -- and £500,000 has been slashed off the original c. £2.5m price..... STILL NOT SOLD.

The public are CONSTANTLY being drip fed UTTER NONSENSE about house prices ALWAYS "going up" .....

===

when the REALITY is completely different......

[dances with sheeple]

I would be interested to know how you think that so much being wiped off the balance sheets would lead to a recovery.

I dont mean what would be healthy and good news for you and I, I mean real life

Average Joe would be able to buy a flat at say 50k, be able to see a point in the near future when it would be paid down, know he could sell it and probably break even anytime he wanted, so he would spend a bit in the economy, maybe save a bit, know he could move for work, be generally happier and more productive without the weight of massive unpayable debt on his back, people would start buying places again, spending in the DIY stores creating jobs for people there, and for tradesmen for the bigger jobs, shops could open without paying cripling rents, young people could leave home and work and spend in the economy, people could trade up knowing their next house was cheaper than last year, people could trade down and pay care fees because the market was moving again.....I could fill the page, but you get the picture?....Oh, and the banks could lend again, which is why it is a dead cert to happen soon IMO.

[eric pebble]

Women were well entrenched in the workplace when I bought an ex-council house, two bedrooms, back and front garden near Aberdeen for 11k in 1995. There has to be another cause......Eric?

PREDATORY LIAR LOANS.

Read all below.

Prices snowballed as those with LIAR LOANS went out into the market all over the UK and paid far too much for property - the local [and not so local] market "price" was driven up very rapidly accordingly [by fraud of LIAR LOAN] - and everyone else [i.e. subsequent property buyers] had to match it..... THEY TOO invariably had to tell little [and not so little] fibs about their "income" -- and it spread out in every direction.....

THAT is how it hapenned.

It spread like a cancer EVERYWHERE.

Edited November 14, 2012 by eric pebble

[dances with sheeple]

PREDATORY LIAR LOANS.

Read all below.

Prices snowballed as those with LIAR LOANS went out into the market all over the UK and paid far too much for property - the local [and not so local] market "price" was driven up very rapidly accordingly [by fraud of LIAR LOAN] - and everyone else [i.e. subsequent property buyers] had to match it..... THEY TOO invariably had to tell little [and not so little] fibs about their "income" -- and it spread out in every direction.....

THAT is how it hapenned.

It spread like a cancer EVERYWHERE.

, Yes, although it isn`t really funny, it is the biggest scam, the biggest f*ucking scandal ever perpetrated on the people of this country, an absolute bloody disgrace.

[Number79]

Average Joe would be able to buy a flat at say 50k, be able to see a point in the near future when it would be paid down, know he could sell it and probably break even anytime he wanted, so he would spend a bit in the economy, maybe save a bit, know he could move for work, be generally happier and more productive without the weight of massive unpayable debt on his back, people would start buying places again, spending in the DIY stores creating jobs for people there, and for tradesmen for the bigger jobs, shops could open without paying cripling rents, young people could leave home and work and spend in the economy, people could trade up knowing their next house was cheaper than last year, people could trade down and pay care fees because the market was moving again.....I could fill the page, but you get the picture?....Oh, and the banks could lend again, which is why it is a dead cert to happen soon IMO.

and how many of these things have come to fruition in countries that have had large percentage drops?

[dances with sheeple]

and how many of these things have come to fruition in countries that have had large percentage drops?

The problem is debt, the debt has to be defaulted on, the institutions who lent out the debt have to go bust, the people who think that a house is a magic store of money have to be re-educated, at a guess I would say Ireland is screwed because they are shackled to the Euro, the US is screwed because they have pandered to the banks and corporations for too long, allowed manufacturing to go to China etc etc, we need to just start again, but big banks and government have too much to lose by doing this, so they will bumble along until it all collapses anyway? If the Uk had taken the tough medicine straight after the election, we would be in some sort of recovery by now. You can`t spend bricks and mortar, there has to be low debt and velocity of money to run an economy?

[hirop]

dances with sheeple argument's are full of logic, but bottom line is that a slow grind down and a lack of appetitie to see the gulty face punishment, the indebted to face the consequences of their recklessness, and a slavish commitment to make sure uk corporate trousers as much as it can while it can is the prevailing state of affairs.

yes, houses near (west of scotland) me are getting cheaper, but i'm not expecting 200k houses to turn up for 100K anytime soon. i'm also not waiting for it i'm ******ling 40 this year. i hope others can and do wait it out, but as soon as i hit 60% ltv, i'm in.

Edited November 14, 2012 by hirop

[gf3]

Just did a rightmove search for Gloucester 3 bed houses under £100,000 shocked to see how few there were.

Checked zoopla and it seems my house has gone up 4.4% in the last six months. Seems like it's getting back to the silly days of my house earning more money than me.

Has anybody else checked zoopla in their area recently?

Edited November 14, 2012 by gf3

[Bruce Banner]

Just did a rightmove search for Gloucester 3 bed houses under £100,000 shocked to see how few there were.

Checked zoopla and it seems my house has gone up 4.4% in the last six months. Seems like it's getting back to the silly days of my house earning more money than me.

Has anybody else checked zoopla in their area recently?

Quelle surprise .

[doomed]

I think houseprices are going to fall but I think this is going to happen along with failure of the state and financial system. I just can't see anyway out.

[I ♥ spreadsheets]

Zoopla estimates are up and down like the weather, total nonsense.

[The Masked Tulip]

Just did a rightmove search for Gloucester 3 bed houses under £100,000 shocked to see how few there were.

Checked zoopla and it seems my house has gone up 4.4% in the last six months. Seems like it's getting back to the silly days of my house earning more money than me.

Has anybody else checked zoopla in their area recently?

Can't EAs log on to zoopla and change the valuations for roads, areas, etc?

I thought there was a way in which you could manipulate the data to raise or lower the valuations - didn't someone post about this on here some time ago?

[TheCountOfNowhere]

Just did a rightmove search for Gloucester 3 bed houses under £100,000 shocked to see how few there were.

Checked zoopla and it seems my house has gone up 4.4% in the last six months. Seems like it's getting back to the silly days of my house earning more money than me.

Has anybody else checked zoopla in their area recently?

Forget crazy E.A. asking price valuations.

for real word valuations, rely on the land registry actual sold prices and price per square footage in the local area. I've never met an agent that doesn't work on price per square foot so why buyers don't is beyond me.

I too am seeing insane asking prices coming on the market now...whole floods of them with no previous property bee history or recognition on my part...it says to me...people are trying to beat the rush to sell.....they've missed that boat by a many many months. The land registry shows the true story...prices flat-lined...sales volumes collapsed....prices falling in real terms and eventually collapse in nominal terms will come due to the real workers wages not going up.

They can put up fuel prices 10% compounded YoY but like any such rises it is unsustainable and only a collapse in usage will result quickly followed by prices or monetary collapse.