House Price Crash Please Elaborate

[laurejon]

I have been posting on and off on this forum for a couple of years.

In that time many posters have predicted a house price crash bolstering the claim with a convincing scientific explanation of why, and when.

However as of yet I fail to see any crash whatsoever!!.

This year in particular was predicted by many on this forum to be the year of the great crash, yet the figures out from the various bodies clearly show a rise.

For myself I maintain that only high interest rates will pull the market over, for so long as we have very very low interest rates as we do today then the market cannot possibly crash.

What are your views on this, anyone brave enough to predict meltdown in 2006 ? It would be interesting to hear the views.

[Guest Charlie The Tramp]

Hi laurejon where have you been the past four months I was getting a little worried about you, hope all is well.

[Guest prudence]

I have been posting on and off on this forum for a couple of years.

In that time many posters have predicted a house price crash bolstering the claim with a convincing scientific explanation of why, and when.

However as of yet I fail to see any crash whatsoever!!.

This year in particular was predicted by many on this forum to be the year of the great crash, yet the figures out from the various bodies clearly show a rise.

For myself I maintain that only high interest rates will pull the market over, for so long as we have very very low interest rates as we do today then the market cannot possibly crash.

What are your views on this, anyone brave enough to predict meltdown in 2006 ? It would be interesting to hear the views.

in Japan falling IRs crashed the market..

[laurejon]

Hi laurejon where have you been the past four months I was getting a little worried about you, hope all is well.

Hi Charlie, I'm afraid all was not well but it is now.

A very familiar story these days, with the missus taking off with a younger model and my cash :-)

Still I can laugh about it all now, got Missus Mk9 now and back at work having had a bit of party with the old juice for a few months!!.

Good to see the old posters are still around, we should have some good entertainment this year as I need to get another property and rather than being an armchair analyst will have to put my money where my mouth is :-)

[Neil D Possitt]

A very familiar story these days, with the missus taking off with a younger model and my cash :-)

Ouch!

A similar thing happened to me a few years back, my then missus ran off with my best friend and my cash. I still miss them. Well, I miss the best friend and the cash............

[laurejon]

Ouch!

A similar thing happened to me a few years back, my then missus ran off with my best friend and my cash. I still miss them. Well, I miss the best friend and the cash............

Unfortunately my story is somewhat more disturbing.

It was my daughters boyfriend!!.

A bit of a mess, but all sorted out now we are well rid.

It is happening here. The FT says that the leading indices are all biased by a flight-to-quality as poor quality property simply refuses to sell.

Anyway, I have no expertise in timing - just fundamental valuation methods.

No idea when the overvaluation of houses will be seen to have corrected - but I don't agree that it need be an interest rate trigger. It could be something mundane like a sentiment change to absolute levels of consumer indebtedness - or something Hollywood style, like Al-Q letting off a nvclear weapon on W^ll Street.

In truth it is just happening anyway. Look at the US and Australia for less biased reporting.

How would that constitute a crash?.

My theory is that stagnation can take place, because for so long as we have low rates people will just sit tight and pay the mortgage. However as was the case last time, high rates lever people unwillingly out of their properties and flood the market with cheap properties in the hands of the mortgagees who just want out at any cost.

Earlier this summer there was a complete standoff between buyers and sellers, however we now see confidence is back and property is selling as buyers have more confidence and are fed up waiting for a crash that never seems to come. I think the big problem is that many have been crying wolf for so long nobody has a clue, when it does come I think it will catch us all with our pants down.

[Neil D Possitt]

Unfortunately my story is somewhat more disturbing.

It was my daughters boyfriend!!.

A bit of a mess, but all sorted out now we are well rid.

Bloody hell! Yes it sounds like you are certainly well rid!

[laurejon]

Bloody hell! Yes it sounds like you are certainly well rid!

My lesson is that when you see jars of anti wrinkle cream in the bathroom, and they join the gym its time to bail out :-)

I have to say I was completely oblivious to it going on, she said life was too comfortable and I was too kind.

How sad that those two qualities are now considered negatives in todays world.

It is happening here. The FT says that the leading indices are all biased by a flight-to-quality as poor quality property simply refuses to sell.

Anyway, I have no expertise in timing - just fundamental valuation methods.

No idea when the overvaluation of houses will be seen to have corrected - but I don't agree that it need be an interest rate trigger. It could be something mundane like a sentiment change to absolute levels of consumer indebtedness - or something Hollywood style, like Al-Q letting off a nvclear weapon on W^ll Street.

In truth it is just happening anyway. Look at the US and Australia for less biased reporting.

Just came back from Sydney a few weeks ago, and they do seem to be having a bit of a problem shifting properties in the Suburbs. The usual boltholes such as the Northern Beaches seem to be holding up but the newbuilds in the West are certainly not looking good, over inflated and over populated in the agents windows. Could soon be an ideal time to jump in and invest as I wouold guess that 20% has been shaved off prices in most areas.

[Guest Charlie The Tramp]

A few weeks back the Reserve Bank of Australia issued a very serious warning, the article is now archived but I will PM you the full article as not to infringe copyright by posting it here.

[Neil D Possitt]

she said life was too comfortable and I was too kind.

Hmmm, very familiar. I think my ex would have preferred someone who stole off her & slapped her around a bit. Shame I didn't take the opportunity when I had it

This is turning into a bit of a self help group isn't it?! Must be 'cause its christmas eve. I didn't even have the heart to have a go at the lads who kicked a ball into my garden this afternoon then broke part of my fence down trying to retrieve it.......must be turning soft in my old age

[laurejon]

A few weeks back the Reserve Bank of Australia issued a very serious warning, the article is now archived but I will PM you the full article as not to infringe copyright by posting it here.

The thing is Charlie we have been having these warnings since 2000 but nothing happens the worlds money men just seem to change the rates and governments take on more debt.

There must be an end somewhere, clearly we cannot continue to live on borrowed money as even the most hardened bull would appreciate that borrowed money is indeed borrowed time.

The world economics have changed considerably since the last recession. We are no longer a small isolated island in a big world. We are now glued to the global economy and I have to say I find it hard to predict anything these days. When it does happen there will be a lot of "Told you so's" but its not a case of if but more when and that is the question nobody seems to get even close to.

I would predict the recession to hit in 2007 simply because I think old world thinking was that 2000 would have been a crash year had it not been for September 11th and very low rates to counter the meltdown and collapse of the US economy. Based on the seven year cycle 2007 seems likely in my mind to be the year we all will regret to see.

Hmmm, very familiar. I think my ex would have preferred someone who stole off her & slapped her around a bit. Shame I didn't take the opportunity when I had it

This is turning into a bit of a self help group isn't it?! Must be 'cause its christmas eve. I didn't even have the heart to have a go at the lads who kicked a ball into my garden this afternoon then broke part of my fence down trying to retrieve it.......must be turning soft in my old age

I have never been one to treat them mean and keep them keen, however that does seem to be the key to a lifelong relationship.

[VacantPossession]

Hi Laurejohn,

Sincere commiserations for your personal circumstances, and welcome back.

But to return to the subject upper most on this website, come now....you don't still believe all that trash you read in the papers surely?

With Good Wishes,

VP

[laurejon]

Hi Laurejohn,

Sincere commiserations for your personal circumstances, and welcome back.

But to return to the subject upper most on this website, come now....you don't still believe all that trash you read in the papers surely?

With Good Wishes,

VP

Thanks

No I think the papers are somewhat controlled to the point that I would not waste my money buying one these days.

In my area we now have a sea of sold boards up and that has happened over the last two months which would usually be a very quiet period. I can remember last years jokes about the spring bounce and for most it was a joke as Spring was indeed a very quiet period in the market place as indeed was the summer.

However that said, I think there is some mileage left in the market. I am currently weighing up the options for myself. Buy or Rent...........Renting is most likely my option due to the fact that it is indeed much cheaper than buying and affords flexibility. I dont see prices rising at present so the smart money I would say is on renting if its based solely on economics. However housing is more than that, I would dearly like to revisit my independence and have my own roof over my head very soon.

[Guest Charlie The Tramp]

In my area we now have a sea of sold boards up and that has happened over the last two months which would usually be a very quiet period. I can remember last years jokes about the spring bounce and for most it was a joke as Spring was indeed a very quiet period in the market place as indeed was the summer.

This seems to be the result of the IR cut in August with a further cut being predicted this November which failed to materialise. It wil be interesting how the maket will perform in the Spring now there is uncertainty on future rate directions.

[Converted Lurker]

Unfortunately my story is somewhat more disturbing.

It was my daughters boyfriend!!.

A bit of a mess, but all sorted out now we are well rid.

How would that constitute a crash?.

it does come I think it will catch us all with our pants down.

Including your Daughter`s ex boyfriends pants no doubt Be all your nightmares come at once if he was a trodden on FTB now spending your cash

Leg Pulling aside, sorry to hear your news, I recall your posts were always in the right spirit without recourse to insults etc. Welcome back, I hope 2006 is better for you..

[laurejon]

This seems to be the result of the IR cut in August with a further cut being predicted this November which failed to materialise. It wil be interesting how the maket will perform in the Spring now there is uncertainty on future rate directions.

I would guess that the rates are well and truly heading up, but they would have a long way to go before they could be considered high. I'm old school, high rates are 18% plus. 10% to me is cheap as chips.

Including your Daughter`s ex boyfriends pants no doubt Be all your nightmares come at once if he was a trodden on FTB now spending your cash

Leg Pulling aside, sorry to hear your news, I recall your posts were always in the right spirit without recourse to insults etc. Welcome back, I hope 2006 is better for you..

Thanks for that, I have to say I am used to getting a ribbing on this board and I hope to make 2006 as enjoyable for you all as 2005 :-)

I think the biggest gift we all have in our lives is humour, if you can stand back and laugh about something that happened to you then you are well on the road to recovery.

I predict a return to BTL this coming year and price rises due to Sipps in the region of 45% :-)

Hell I had better keep off the beer else I might even start believing it.

[Guest Charlie The Tramp]

I would guess that the rates are well and truly heading up, but they would have a long way to go before they could be considered high. I'm old school, high rates are 18% plus. 10% to me is cheap as chips.

I well remember those days but with the high level of personal debt we are faced with today, I would say 6% would lead to a meltdown. IMHO the MPC are now treading on eggshells and are holding back from which is the inevitable. As Mervyn King said "House Prices are a matter of opinion but debt is real. When it comes to the crunch the banks will be more unforgiving than the old East End moneylenders.

[Once in a lifetime]

What are your views on this, anyone brave enough to predict meltdown in 2006 ? It would be interesting to hear the views.

Hi laurejon, 2005 not a bad year for us bears, next year even better.

Your money buys you more than it did last year.

Well, that's one of the problems of this site. The 'crash' word. Does it mean speed or magnitude of decline?

The word crash accurately describes the feeling of homeowners afterwards.

[frugalista]

Good to see the old posters are still around, we should have some good entertainment this year as I need to get another property and rather than being an armchair analyst will have to put my money where my mouth is :-)

Welcome back laurejon.

frugalista

[apom]

I hate to add this again..

but new build prices are plumeting..

If you ask nicely you are setting the price..

Shame they are poorly put together junk...

I see a public backlash and ridicule against new build rubbish already happening.

[laurejon]

In fairness I think a house share would suit me fine.

I dont want to take on an entire property with the council tax and overheads all for myself.

Smart Money today is for renting and I certainly would not be adverse to go down that road. However if an opportunity came around, such as an executors sale, or repossession then for sure I may well be interested and jump in for a quick turnaround.

[Michael]

People are too impatient for the crash................most people in here seemed to think i was daft saying it could take several years....but in a low inflation environment IRs won't go up much.......

but nor will the real value of the debt be eroded ...so an economic shock even 5 years down the line will cause a slump......the boom/bust cycle is much longer with low IRS and inflation.......

Good to see you back, Laurejon. old mate......you've always made more pertinent comments on the housing market than the other bulls.........without resorting to abuse and goading like TTRTR and the gang.....

[BufferBear Bitcoin Bull]

Welcome back Laurejon.

[crash test dummy]

I have been posting on and off on this forum for a couple of years.

In that time many posters have predicted a house price crash bolstering the claim with a convincing scientific explanation of why, and when.

However as of yet I fail to see any crash whatsoever!!.

This year in particular was predicted by many on this forum to be the year of the great crash, yet the figures out from the various bodies clearly show a rise.

For myself I maintain that only high interest rates will pull the market over, for so long as we have very very low interest rates as we do today then the market cannot possibly crash.

What are your views on this, anyone brave enough to predict meltdown in 2006 ? It would be interesting to hear the views.

Duh, 30 year low in House Sales. This is not just a crack in the paintwork of the VI ******** machine, it is bad news for property investors.

Think about it and get back to me. No equations or formulae for you there to struggle with.

You may not see what is obvious to the rest of us,

[laurejon]

Duh, 30 year low in House Sales. This is not just a crack in the paintwork of the VI ******** machine, it is bad news for property investors.

Think about it and get back to me. No equations or formulae for you there to struggle with.

You may not see what is obvious to the rest of us,

I have to say I am not aware of that statistic 30yr low in house sales. If that is the case then for sure there is something on the horizon however where I live on the South Coast it looks like a mini property boom with litterally buckets full of sold boards up over the past 8 weeks.

I have lived in a recession in fact several and I think in those days you would have to drive a couple of hundred miles to find a Sold board, and that would only be up for a couple of day when the sale fell through.