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VacantPossession

A Worrying Anecdotal

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Went to West London yesterday to have supper with some dear friends. They moved to West Wales 8 years ago for a tranquil life but it didn't suit. They have a Grade 2 listed building in a small town in West Wales, and a studio in West London, which they hung on to in case Wales did not turn out as they'd hoped. It didn't.

They now cannot sell the Welsh place, but have two small children and they are all crammed into basically one room in London. They put the Welsh place on for £270,000 and at the time I suggested that was really very optimistic. They are not money-grabbers and have no particularly interest to play the market. They just saw every similar house at the same price.

Six months later, similar properties are down to £220,000 and still not selling. So they are "waiting" till next spring, when they assume there will be a surge of activity. As politely as I could, I pointed out that there was a risk their price might have to, by then, drop even lower.

I said the wrong thing. These very good friends, with whom there has hardly been a cross word in ten years of excellent friendship, went very very defensive. "What do you know about the property market"? "The press says there will be no crash and WE believe them". "We are not seeking an unreasonable profit, we are just doing what anyone else would do". "Prices will recover and sales volumes increase once we hit spring of 2006". "It is almost prostitution to lower the price even more". etc etc.

What can one say? Whatever I said it was hitting raw nerves.

This is what we are up against. Perfectly intelligent people in all other respects seem to entirely lose any critical faculties when dealing with their own property. The enormous power of spin, vested interest, and sheer hype in the media, have convinced otherwise logical people that somehow, if you hold on long enough, and sell at the right time, you can buck the trend. They seem to be of the belief that, as of right, they are entitled to any price they wish.

I attempted to explain that any housing profit eventually is paid for on the bottom rung by first time buyers, and if those buyers refused to be drawn by the conventional game, then the assumed profit was no longer available. It is simple economics.

I suspect many Bears here have had similar conversations. What can one do or say? The lack of wisdom is so deeply ingrained, the hype so successful, that you risk ruining otherwise good friendships by discussing the one thing which appears to be un-discussable.

VP

Edited by VacantPossession

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Very interesting.

1. Be interested to know what town/village it is in.

2. How much did they pay for it - 8 years ago there was no boom in West Wales and you could have bought virtually anything for an average UK mortgage/price back then. If they want 270K now I assume they only paid about 50K tops 8 years ago????

Can you find out?

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I've learnt to keep my gob shut. I just say "I'm not buying at the moment because I think buying property is poor value." and leave it at that. I don't bother trying to justify my position as they either can't (because they don't think) or won't (because they want to be deluded) understand. Give the advice once, then say no more except "Maybe you're right...let's go have a beer."

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I've learnt to keep my gob shut. I just say "I'm not buying at the moment because I think buying property is poor value." and leave it at that. I don't bother trying to justify my position as they either can't (because they don't think) or won't (because they want to be deluded) understand. Give the advice once, then say no more except "Maybe you're right...let's go have a beer."

As a bear I've learnt to keep quiet because I've been wrong up to now about a crash! That's not to say that I don't think it will still happen, but we none of us can get the timing right. Best to preface it heaviliy with a few "In my opinion"s and "I'm not certain, but I think..." This usually is more thought provoking and avoids ugly scenes!

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I'm keeping out of these discussions as well. I'm the only one renting among my friends here in Nottingham. One befriended couple bought about three months ago, and another is in the process of buying. I have politely explained why I feel it is not a good time to invest in property at the moment, but now I see no other choice but to keep quiet. I can sense it's becoming a touchy subject, and it's likely to get worse.

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I seem to have the gift of anti persuasion, just about every serious bearish conversation I seem to have ends up with them buying about four months later. And this is the FTBs - God knows what effect it has on actual owners.

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This is what we are up against. Perfectly intelligent people in all other respects seem to entirely lose any critical faculties when dealing with their own property. The enormous power of spin, vested interest, and sheer hype in the media, have convinced otherwise logical people that somehow, if you hold on long enough, and sell at the right time, you can buck the trend. They seem to be of the belief that, as of right, they are entitled to any price they wish.

It's called the "endowment effect".

http://en.wikipedia.org/wiki/Endowment_effect

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Human nature. I'm afraid. And it's not just houses. I remember chatting to a chap about 4x4s. He wanted one to keep his wife and kids safe on a short (walkable) school run - I suggested that 4x4s are far more likely to kill pedestrians than normal cars - and basically his attitude was well as long as me and my own are OK I don't care.

I rarely talk to friends about house prices as even the house owning ones know bugger all about basic economics. I would say that generally though people are seeming more gloomy about the economy and feeling a bit more stretched (but that could just be Christmas is coming :D ).

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As I've mentioned in my original post, I got so tired of having exactly the same type of conversation with friends that I put all my thoughts into a single cohesive report http://investedinterests2005.blogspot.com

This way, they can read my views at their leisure and a pleasant evening doesn't get ruined.

All credit to you for that report, I read it with interest.

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I'm amazed that you haven't worked out by now that having a bearish discussion about property is a guaranteed method of how to lose friends and unimpress people!

I've long since given up and just play along; "yep yep 250k for a studio flat in Cracknell is perfectly reasonable" etc :lol:

Edited by mescalinemonkey

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I'm amazed that you haven't worked out by now that having a bearish discussion about property is a guaranteed method of how to lose friends and unimpress people!

I've long since given up and just play along; "yep yep 250k for a studio flat in Cracknell is perfectly reasonable" etc :lol:

Well I actually had someone who I had never discussed with say to me recently "but house prices have dropped haven't they". Unfortunately not enough! But it was encouraging (although she is a bit more switched on than most)

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Yes, It's funny how so many people become very defensive, perhaps because what us realists are trying to say is, "you mug, you overpaid". I've learnt the hardway and just no longer discuss it, even when some nobody came up to me at work waving the paper about house price rises a fortnight ago.

It's all a very sad reflection on the greedy, nasty and consumerist society which eclipses even the 1980s. BTW, I speak as a devotee of Maggie.

When the inevitable reposessions kick in, negative equity, financial hardship, I'm wondering whether to indulge in schadenfreude or just say nothing.

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When the inevitable reposessions kick in, negative equity, financial hardship, I'm wondering whether to indulge in schadenfreude or just say nothing.

Hogan_Schultz.jpg

I know NOTHING!

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They put the Welsh place on for £270,000 .....Six months later, similar properties are down to £220,000 and still not selling. So they are "waiting" till next spring, when they assume there will be a surge of activity. As politely as I could, I pointed out that there was a risk their price might have to, by then, drop even lower.

For just about every working family, the "loss" of £50K is quite a tough situation to deal with. Not too far off dealing with a berivement, divorce or serious illness. So it's only natural for them to display signs of denial. Bringing such realities, however sensitive they are handled, to the fore is likely to result is frayed nerves.....best well out of it unless you have good counselling skills

Denial: Denial is a defense mechanism in which a person unconsciously rejects thoughts, feelins, needs, wishes, or external realities that they would not be able to deal with if they got into the conscious mind.

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For just about every working family, the "loss" of £50K is quite a tough situation to deal with. Not too far off dealing with a berivement, divorce or serious illness. So it's only natural for them to display signs of denial. Bringing such realities, however sensitive they are handled, to the fore is likely to result is frayed nerves.....best well out of it unless you have good counselling skills

Denial: Denial is a defense mechanism in which a person unconsciously rejects thoughts, feelins, needs, wishes, or external realities that they would not be able to deal with if they got into the conscious mind.

that holds true for everyone.losing money,even imaginary money is not nice.

so they'd better learn when to cut their losses.Anybody who stays in in the hope they will recoup their losses is no better than the fool in the bookies who has put £500 on the horses and lost,and then puts his £5 bus-fare home on a 100-1 shot thinking he'll get his money back.

that is nothing short of compulsive gambling.I dread to say it but I have a hunch there are a lot of them out there.

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There are only two people that I will discuss house prices with and both of them are expecting some sort of crash. Both of them are house owners (no mortgage) and neither is remotely concerned about the price "because I bought the place before the boom and I bought it to live in not to make money from". Interestingly, both of them seem to see price falls as a good thing because that will help first time buyers etc.

Other than that, I just keep my mouth shut and pretend to not know much about property to avoid discussing it. It's not worth the hassle, losing friends etc.

I do much the same with oil. Talk about it with those with an open mind but generally deny knowing anything about the industry especially if they own and SUV. Not worth the hassle. If anyone questions why I own an economical car then I just say that I would rather donate money to charity than give it to oil companies. That shuts them up real fast... :lol:

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Went to West London yesterday to have supper with some dear friends. They moved to West Wales 8 years ago for a tranquil life but it didn't suit. They have a Grade 2 listed building in a small town in West Wales, and a studio in West London, which they hung on to in case Wales did not turn out as they'd hoped. It didn't.

They now cannot sell the Welsh place, but have two small children and they are all crammed into basically one room in London. They put the Welsh place on for £270,000 and at the time I suggested that was really very optimistic. They are not money-grabbers and have no particularly interest to play the market. They just saw every similar house at the same price.

Six months later, similar properties are down to £220,000 and still not selling. So they are "waiting" till next spring, when they assume there will be a surge of activity. As politely as I could, I pointed out that there was a risk their price might have to, by then, drop even lower.

I said the wrong thing. These very good friends, with whom there has hardly been a cross word in ten years of excellent friendship, went very very defensive. "What do you know about the property market"? "The press says there will be no crash and WE believe them". "We are not seeking an unreasonable profit, we are just doing what anyone else would do". "Prices will recover and sales volumes increase once we hit spring of 2006". "It is almost prostitution to lower the price even more". etc etc.

What can one say? Whatever I said it was hitting raw nerves.

This is what we are up against. Perfectly intelligent people in all other respects seem to entirely lose any critical faculties when dealing with their own property. The enormous power of spin, vested interest, and sheer hype in the media, have convinced otherwise logical people that somehow, if you hold on long enough, and sell at the right time, you can buck the trend. They seem to be of the belief that, as of right, they are entitled to any price they wish.

I attempted to explain that any housing profit eventually is paid for on the bottom rung by first time buyers, and if those buyers refused to be drawn by the conventional game, then the assumed profit was no longer available. It is simple economics.

I suspect many Bears here have had similar conversations. What can one do or say? The lack of wisdom is so deeply ingrained, the hype so successful, that you risk ruining otherwise good friendships by discussing the one thing which appears to be un-discussable.

VP

I think it was Tiny Tim that said "f*ck um, each and every one of um".

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Went to West London yesterday to have supper with some dear friends. They moved to West Wales 8 years ago for a tranquil life but it didn't suit. They have a Grade 2 listed building in a small town in West Wales, and a studio in West London, which they hung on to in case Wales did not turn out as they'd hoped. It didn't.

They now cannot sell the Welsh place, but have two small children and they are all crammed into basically one room in London. They put the Welsh place on for £270,000 and at the time I suggested that was really very optimistic. They are not money-grabbers and have no particularly interest to play the market. They just saw every similar house at the same price.

Six months later, similar properties are down to £220,000 and still not selling. So they are "waiting" till next spring, when they assume there will be a surge of activity. As politely as I could, I pointed out that there was a risk their price might have to, by then, drop even lower.

I said the wrong thing. These very good friends, with whom there has hardly been a cross word in ten years of excellent friendship, went very very defensive. "What do you know about the property market"? "The press says there will be no crash and WE believe them". "We are not seeking an unreasonable profit, we are just doing what anyone else would do". "Prices will recover and sales volumes increase once we hit spring of 2006". "It is almost prostitution to lower the price even more". etc etc.

What can one say? Whatever I said it was hitting raw nerves.

This is what we are up against. Perfectly intelligent people in all other respects seem to entirely lose any critical faculties when dealing with their own property. The enormous power of spin, vested interest, and sheer hype in the media, have convinced otherwise logical people that somehow, if you hold on long enough, and sell at the right time, you can buck the trend. They seem to be of the belief that, as of right, they are entitled to any price they wish.

I attempted to explain that any housing profit eventually is paid for on the bottom rung by first time buyers, and if those buyers refused to be drawn by the conventional game, then the assumed profit was no longer available. It is simple economics.

I suspect many Bears here have had similar conversations. What can one do or say? The lack of wisdom is so deeply ingrained, the hype so successful, that you risk ruining otherwise good friendships by discussing the one thing which appears to be un-discussable.

VP

VP: You could have put it like this: You have unknowingly taken part in The World's Biggest Ever Pyramiod Selling Scam [the "Housing Market"] - and unfortunately - the music has stopped - and you are now left without a chair...... i.e. there are no longer any takers who can even afford [except for the really blind] to tale the first step into the Giant Pyramid Selling Scam of all time....... AND this Pyramid Selling Scam has been deliberately and knowingly kept going by the Vested Interests - amongst which are the MONEYLENDERS [all Financial Lending Institutions] who are part and parcel OF the Pyramid Selling Scam - even to the extent of perpetrating and actively allowing MORTGAGE FRAUD [ http://www.housepricecrash.co.uk/forum/ind...showtopic=19113

- read ALL of this!!!] to keep the whole thing going......

Edited by eric pebble

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"It is almost prostitution to lower the price even more". etc etc.

That is possibly the stupidest thing I have ever heard. :lol::lol::lol::lol::lol::lol::lol: Is it prostitution when car manufacturers do 20% off or 0% finance on cars to get them shifted?:lol:

I remember chatting to a chap about 4x4s. He wanted one to keep his wife and kids safe on a short (walkable) school run - I suggested that 4x4s are far more likely to kill pedestrians than normal cars - and basically his attitude was well as long as me and my own are OK I don't care.

4 X 4's are actually less safe than normal saloon cars, contrary to common perception. In urban and motorway driving, the lack of agility and high centre of gravity produce atrocious handling characteristics which mean that any accident you do have will be more serious and there is a higher chance of you having one in the first place.

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Very interesting.

1. Be interested to know what town/village it is in.

2. How much did they pay for it - 8 years ago there was no boom in West Wales and you could have bought virtually anything for an average UK mortgage/price back then. If they want 270K now I assume they only paid about 50K tops 8 years ago????

Can you find out?

No I think 50k is way under what they paid. I think they bought for around 150k, in very poor condition and then spent around 25k making it comfortable. I don't think they have made a vast profit and the likely selling price is probably around 220k.

VP

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4 X 4's are actually less safe than normal saloon cars, contrary to common perception. In urban and motorway driving, the lack of agility and high centre of gravity produce atrocious handling characteristics which mean that any accident you do have will be more serious and there is a higher chance of you having one in the first place.

Plus, in the US, 2 children are backed over and killed by SUVs every week.

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VP: You could have put it like this: You have unknowingly taken part in The World's Biggest Ever Pyramiod Selling Scam [the "Housing Market"] - and unfortunately - the music has stopped - and you are now left without a chair...... i.e. there are no longer any takers who can even afford [except for the really blind] to tale the first step into the Giant Pyramid Selling Scam of all time....... AND this Pyramid Selling Scam has been deliberately and knowingly kept going by the Vested Interests - amongst which are the MONEYLENDERS [all Financial Lending Institutions] who are part and parcel OF the Pyramid Selling Scam - even to the extent of perpetrating and actively allowing MORTGAGE FRAUD [ http://www.housepricecrash.co.uk/forum/ind...showtopic=19113

- read ALL of this!!!] to keep the whole thing going......

Hi Eric,

I think I did mention pyramids but it was hard to get an understanding of what I was on about. Some people simply do not understand that property profit HAS to come from somewhere since it doesn't just magically appear. It is difficult to convince some folks that in the end those at the bottom are paying for the profits of those higher up the edifice.

VP

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  • 301 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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