Welcome back to 2007

[Timm]

59 minutes ago, Deckard said:

A short, sharp drop then? How sharp in % terms?

And followed by what, new highs in nominal terms?

I can't see that myself, not for some time after the crash, and certainly not in a matter of months.

I'm not a guru!

But yes, I am very bearish on nominal house prices at the moment (short to medium-short term), and exceptionally bearish on real house prices in the (medium to long term) future. I expect a sharp drop in nominal prices (which I think has already started), followed by rapid inflation that (might) hide absolutely enormous nominal falls. I am also convinced that the top in real prices is behind us.

I think those things are a given. I have no idea how big the fall will be in % terms (let alone real/nominal), just that it will change the game for many. I have no idea when inflation will start to hide the nominal falls, just that it will be before most bears want it to be. As a very wise poster once said to me: "Don't chase the bottom. Watch the inflection, and once it turns, panic."

That is a lie. What they actually said was: "Don't chase the bottom / top. Watch the inflection, and once it turns back, buy / sell. You don't want to be the ultimate winner, you just want to be on the right side of the curve.."  But I prefer my version. If anybody out there does not know what an inflection point is, it's worth looking up.

So, in my worthless opinion, the questions are:

1. Will there be nominal falls? I don't know. I'm guessing there will, and that they will be soon and scary.

2. Will there be deliberate inflation? I don't know. I'm guessing there will.

3. Will the inflation mask all nominal falls? I don't know. I think it will, but that it will take a couple of quarters.

4. If you have savings, when is the best time to get in? I don't know. But I'm guessing not now!

 

New highs in nominal terms?

Hmm. Yes, but as to when, I literally have no idea at all.

And anyway, that has more to do with the nature of fiat money than it does with the value of a home.

 

Edited June 2, 2020 by Timm
I'm not a guru

[bear.getting.old]

11 hours ago, TheCountOfNowhere said:

Wanted or being given ?

That's down about 50% nominally and about 60%+ in real terms.

OK ?  Happy ?

 

NI was a crazy bubble in 2007...Londistan is MUCH worse

 

The NI bubble and popping of it was related to the bubble in Dublin. Unlike in 89. This time NI hasn't recovered like Dublin has.

[bear.getting.old]

1 hour ago, Timm said:

I'm not a guru!

But yes, I am very bearish on nominal house prices at the moment (short to medium-short term), and exceptionally bearish on real house prices in the (medium to long term) future. I expect a sharp drop in nominal prices (which I think has already started), followed by rapid inflation that (might) hide absolutely enormous nominal falls. I am also convinced that the top in real prices is behind us.

I think those things are a given. I have no idea how big the fall will be in % terms (let alone real/nominal), just that it will change the game for many. I have no idea when inflation will start to hide the nominal falls, just that it will be before most bears want it to be. As a very wise poster once said to me: "Don't chase the bottom. Watch the inflection, and once it turns, panic."

That is a lie. What they actually said was: "Don't chase the bottom / top. Watch the inflection, and once it turns back, buy / sell. You don't want to be the ultimate winner, you just want to be on the right side of the curve.."  But I prefer my version. If anybody out there does not know what an inflection point is, it's worth looking up.

So, in my worthless opinion, the questions are:

1. Will there be nominal falls? I don't know. I'm guessing there will, and that they will be soon and scary.

2. Will there be deliberate inflation? I don't know. I'm guessing there will.

3. Will the inflation mask all nominal falls? I don't know. I think it will, but that it will take a couple of quarters.

4. If you have savings, when is the best time to get in? I don't know. But I'm guessing not now!

 

New highs in nominal terms?

Hmm. Yes, but as to when, I literally have no idea at all.

And anyway, that has more to do with the nature of fiat money than it does with the value of a home.

 

This is where it gets confusing because your money in the bank is also being inflated away. We need nominal falls in housing really.

[goldbug9999]

13 hours ago, TheCountOfNowhere said:

I sincerely hope the government do the right thing now and let the market correct but let me put this in a way everyone will understand...NO ****ING CHANCE.

God know what's coming next but I'd wager it's bad for everyone bar the rich/politicians.

Good luck, I hope I am wrong.

They had 5% interest rates which they could drop to save the housing market. No bullets left in that chamber I'm afraid.

[Timm]

1 hour ago, bear.getting.old said:

This is where it gets confusing because your money in the bank is also being inflated away. We need nominal falls in housing really.

What you, I, or the general population want or need might not affect what happens.

[mrpleasant]

11 hours ago, Now or never said:

I've never known the MSM to be so submissive to falling prices - they have no counter argument to support sentiment.

This is a massive difference to 2007.

That's an interesting point. Back in 2007, if you looked hard enough, there were tiny pockets of the press reporting that mortgages were getting harder to get and that Spanish property was looking peaky (I saw an article in The Times in 2006 on that subject), but the vast, vast majority had been brainwashed into believing property was the magic money tree of myth. I visited a friend who ran a tiny mortgage broker business with a friend at Christmas 2007 - a full five months after 'the crunch' and he seemed happily oblivious to the whole thing. I mean, seriously. The silent phone at work was just the Christmas slowdown. This time, we've had a decade of readjustment psychologically. Yes, houses go up, etc, but it's tempered now with a healthy dose of reality. Friends in the south east aren't nearly so excited about what their house is worth these days. It IS incredibly hard to see what this or any government can do about it if the collapse is dramatic, but the depressing effect on the economy of huge falls would be (will be) horrendous. A couple of years of deflation followed by massive inflation? Interesting times.

Edited June 3, 2020 by mrpleasant

[Bob8]

32 minutes ago, mrpleasant said:

That's an interesting point. Back in 2007, if you looked hard enough, there were tiny pockets of the press reporting that mortgages were getting harder to get and that Spanish property was looking peaky (I saw an article in The Times in 2006 on that subject), but the vast, vast majority had been brainwashed into believing property was the magic money tree of myth. I visited a friend who ran a tiny mortgage broker business with a friend at Christmas 2007 - a full five months after 'the crunch' and he seemed happily oblivious to the whole thing. I mean, seriously. The silent phone at work was just the Christmas slowdown. This time, we've had a decade of readjustment psychologically. Yes, houses go up, etc, but it's tempered now with a healthy dose of reality. Friends in the south east aren't nearly so excited about what their house is worth these days. It IS incredibly hard to see what this or any government can do about it if the collapse is dramatic, but the depressing effect on the economy of huge falls would be (will be) horrendous. A couple of years of deflation followed by massive inflation? Interesting times.

I agree.

I do not see the same amount of hot air, so I do not see the same potential for collapse. This does feel less ponzi like.

The two issues I see for a fall are brexit and covid-19. Both will cause a fall as we will as a population be poorer. In 2008, I had stayed renting, then bought cheap and essentially put myself in a far more comfortable financial position ever since. I might be able to do something similar now, but not as much.

[Killer Bunny]

12 hours ago, Deckard said:

^  this.

As I've said before: if a HPC doesn't happen now, then I'll accept that it never will.

If something has to end it will. Just never know when.

But it will end.

[Killer Bunny]

11 hours ago, Timm said:There will be a collapse in prices going into this winter. BUY WEAKNESS. After that, whilst the economy might (or might not) be in a tailspin, house prices will be lifted on a tide of inflation.

 

 

Still the thinking that higher inflation means higher HPs. Mortgage rates...

Also UNLIKE 2009, mortgage rates NOT slashed during BIGGEST RECESSION SINCE 1930s.

[TheCountOfNowhere]

12 hours ago, xxxx said:

It’s game over.  There is a real sense of panic and urgency in the market at the moment, getting deals over the line.  It’s not happening though.  Most professionals are furloughed and everything is literally stuck.  Nothing is moving.  In the meantime, sentiment Is changing and more reduce their accepted offer, they are refused, pull out of sale and another chain collapses.  The housing market is in complete chaos.  Chains are collapsing left, right and centre.
 

I don’t think there will be any props this time, we would have had them already when the market re-opened, to give it a boost before sentiment changed.   They may try and bring in schemes, to help oo, but it’s gone past the point of saving the  housing market.

Hey 4x, you sounds like you know what you are talking about.  An honest EA perhaps ?

[TheCountOfNowhere]

11 hours ago, Timm said:

There was a window of opportunity in the winter of 2008/09; some forced sales were being listed at 30% off peak price in my area, before everything kicked off again.

 

 

Spot on.  Saw it, missed it.  When I was prepared to jump in mid 2009 their were no more forced sales, low IRs and forbearance had put a floor under things.  Everything decent was then priced at 2007++ prices. There was little point buying a house after that.

[TheCountOfNowhere]

8 hours ago, goldbug9999 said:

They had 5% interest rates which they could drop to save the housing market. No bullets left in that chamber I'm afraid.

-5% anyone ?

[dpg50000]

16 hours ago, xxxx said:

It’s game over.  There is a real sense of panic and urgency in the market at the moment, getting deals over the line.  It’s not happening though.  Most professionals are furloughed and everything is literally stuck.  Nothing is moving.  In the meantime, sentiment Is changing and more reduce their accepted offer, they are refused, pull out of sale and another chain collapses.  The housing market is in complete chaos.  Chains are collapsing left, right and centre.
 

I don’t think there will be any props this time, we would have had them already when the market re-opened, to give it a boost before sentiment changed.   They may try and bring in schemes, to help oo, but it’s gone past the point of saving the  housing market.

Really? Most of the office worker professionals (white collar) I know are all WFH, no furlough at all.

[msi]

5 minutes ago, dpg50000 said:

Really? Most of the office worker professionals (white collar) I know are all WFH, no furlough at all.

I know some big name companies pushed their staff straight to furlough. Most are making plans to transition back when the scheme ends, so it was a cash ploy.  One is trying to get 20% 'voluntary' wage reduction - that stinks

[Switch625]

5 minutes ago, msi said:

One is trying to get 20% 'voluntary' wage reduction - that stinks

If enough of them choose this pathway and get away with it, expect profound changes to the economy and house prices in particular.

[Social Justice League]

16 hours ago, xxxx said:

It’s game over.  There is a real sense of panic and urgency in the market at the moment, getting deals over the line.  It’s not happening though.  Most professionals are furloughed and everything is literally stuck.  Nothing is moving.  In the meantime, sentiment Is changing and more reduce their accepted offer, they are refused, pull out of sale and another chain collapses.  The housing market is in complete chaos.  Chains are collapsing left, right and centre.
 

I don’t think there will be any props this time, we would have had them already when the market re-opened, to give it a boost before sentiment changed.   They may try and bring in schemes, to help oo, but it’s gone past the point of saving the  housing market.

The housing market is going to be a side show in the Autumn when millions can't afford a tin of beans and a loaf of bread.

[msi]

4 minutes ago, Switch625 said:

If enough of them choose this pathway and get away with it, expect profound changes to the economy and house prices in particular.

I've not yet seen an entire companies Board fired and re-hired on a lower contract.  You'd think shareholders could force that.

[Switch625]

3 hours ago, msi said:

I've not yet seen an entire companies Board fired and re-hired on a lower contract.  You'd think shareholders could force that.

Now that I would actually buy shares just to see happen

[xxxx]

9 hours ago, TheCountOfNowhere said:

Hey 4x, you sounds like you know what you are talking about.  An honest EA perhaps ?

Is there such a thing?

[TheCountOfNowhere]

3 minutes ago, xxxx said:

Is there such a thing?

You come across one now and again.  Some of the older ones have seen it all before.  They're salesmen at the end of the day and the good ones know exactly what the game is about.

[Now or never]

5 minutes ago, xxxx said:

Is there such a thing?

There used to be one on here over 10 years ago - very informative.

[xxxx]

5 hours ago, dpg50000 said:

Really? Most of the office worker professionals (white collar) I know are all WFH, no furlough at all.

Yes, really.  There are currently 8.4 million employees furloughed in the UK.  They are from all sectors, including many white collar workers.

Approximately 373,000 residential sales were put on hold due to lockdown.  The housing market may have reopened, but the conveyancing sector has not fully opened.  

Many valuers are furloughed and the remaining ones are not able to accept the instruction if it falls outside the Global Standard Valuation Practise Alert framework set by the RICS.  These instructions have to be declined.  Even if it falls within the standards, the framework makes the valuation a time consuming exercise.

I speak to solicitors constantly throughout the day, all over the UK.  In the majority of legal practises, one solicitor is undertaking the work of 4.

[xxxx]

10 minutes ago, TheCountOfNowhere said:

You come across one now and again.  Some of the older ones have seen it all before.  They're salesmen at the end of the day and the good ones know exactly what the game is about.

I can assure you, I am not an Estate Agent.

[Deckard]

30 minutes ago, TheCountOfNowhere said:

You come across one now and again. 

Easy tiger, 4x is not an EA and his input is great, IMO.

 

On 29/05/2020 at 14:31, xxxx said:

I’m a surveyor.

Edited June 3, 2020 by Deckard

[xxxx]

45 minutes ago, Deckard said:

Easy tiger, 4x is not an EA and his input is great, IMO.

 

Her ?