Jump to content
House Price Crash Forum
Sign in to follow this  
ruisort7

Why Do House Prices Change So Much?

Recommended Posts

Hi

I’ve been visiting here for a while and have managed to go from absolutely nil financial/economic knowledge to, well, not too much but I’ve learnt some interesting things. One thing I was wondering about recently is whether there are any other products in our lives whose prices vary so wildly. Just off the top of my head, things like new cars, food, clothes all change, but generally it’s a gradual trend, rather than violent rises and falls. Are house prices unique in this? And, as I think someone posted just the other day, why is a 20% rise in energy costs considered a disaster whereas a 20% rise in HPI would be heralded as the greatest news we could possibly imagine?

Thanks.

Share this post


Link to post
Share on other sites
Guest
rather than violent rises and falls. Are house prices unique in this?

Houses are more gradual than other things! It might take 15 years to get trough -> peak -> trough

why is a 20% rise in energy costs considered a disaster whereas a 20% rise in HPI would be heralded as the greatest news we could possibly imagine?

Sacred cow of the middle-classes.

Share this post


Link to post
Share on other sites

Hi

I’ve been visiting here for a while and have managed to go from absolutely nil financial/economic knowledge to, well, not too much but I’ve learnt some interesting things. One thing I was wondering about recently is whether there are any other products in our lives whose prices vary so wildly. Just off the top of my head, things like new cars, food, clothes all change, but generally it’s a gradual trend, rather than violent rises and falls. Are house prices unique in this? And, as I think someone posted just the other day, why is a 20% rise in energy costs considered a disaster whereas a 20% rise in HPI would be heralded as the greatest news we could possibly imagine?

Thanks.

Its because its a market and the markets purpose is to match up sellers with buyers, the stock market is the same, even your local market is the same, sometimes oranges are cheaper (due to time of year or a bulk buy) that means that supply is greater than demand. If everyone got addicted to oranges or if they became as common for breakfast as toast then the price would rise. People would be prepared to pay that little bit extra.

Of course what you say about a 20% rise is correct but remember it depends on what side of the fence you're on. The gas company and its stakeholders will be pleased (if it feeds through as profit or less of a loss) if you owned millions in a gas company you would be really pleased about the rises if you had been running a 20% loss. Most people who think that a 20% rise in the housing market is good own thier home.

Putting money into your pocket = great

Taking money out of your pocket = bad

Having shares in a debt management company which then trippes its client base = good

Having to sign onto a debt management companies books yourself = bad.

People just suck its a natural flaw we all have its just a shame we rarely admit to it, most the time we pretend (even to the point of deluding ourselves) that we are nicer than we actually are.

Share this post


Link to post
Share on other sites
Guest Winners and Losers

OK, I bought a flat in 1997 - a slow recovery starting then from the recession. Let's say, for arguments sake, that the real boom started to end in 2005. So, we could say maybe 3 years of slow recovery build up (95-98), then 7 boom years, another 3 years to reach bottom again. 2008. OK, I'm not the smartest tool in the shed, but about a 13 year cycle in all seems to make some sense. Pick me to pieces then smart alec's.

Share this post


Link to post
Share on other sites

Hi

I’ve been visiting here for a while and have managed to go from absolutely nil financial/economic knowledge to, well, not too much but I’ve learnt some interesting things. One thing I was wondering about recently is whether there are any other products in our lives whose prices vary so wildly. Just off the top of my head, things like new cars, food, clothes all change, but generally it’s a gradual trend, rather than violent rises and falls. Are house prices unique in this? And, as I think someone posted just the other day, why is a 20% rise in energy costs considered a disaster whereas a 20% rise in HPI would be heralded as the greatest news we could possibly imagine?

Thanks.

Fractional reserve banking coupled with greed given direction by a national obsession with home ownership.

Share this post


Link to post
Share on other sites

Thanks for the replies. Perhaps the swings aren't as unique to housing as I thought? I guess if the price of an orange changed by 20% over 7-10 years I probably wouldn't notice. (And there probably aren't websites focusing on oranges. As far as I know.)

Share this post


Link to post
Share on other sites

Thanks for the replies. Perhaps the swings aren't as unique to housing as I thought? I guess if the price of an orange changed by 20% over 7-10 years I probably wouldn't notice. (And there probably aren't websites focusing on oranges. As far as I know.)

Orangepricecrash.co.uk. To be honest I've posted there and they are all complete fruits.

(Sorry - Friday afternoon).

Share this post


Link to post
Share on other sites
why is a 20% rise in energy costs considered a disaster whereas a 20% rise in HPI would be heralded as the greatest news we could possibly imagine?

A mixture of sloppy thinking and misdirection.

If house prices go up the estate agents and mortgage people make more money. So for them it's a good thing. It's also a good thing for people trading down. For people buying in (FTB), trading up or trading sideways then it's a bad thing as it makes everything more expensive. (Sideways people pay more stamp duty / EA fees than they would).

Everytime I hear / see the media say "good news for homeowners" when prices go up I just groan. The EA's etc go "look, that house you bought has gone up" and you look at the rise and think "oh goody isn't that good for me". It's misdirection. The next house will cost you more than it would as the gap just got wider. You'd have been better off if houses hadn't moved in price at all.

Edited by George Mainwaring

Share this post


Link to post
Share on other sites

Thanks for the replies. Perhaps the swings aren't as unique to housing as I thought? I guess if the price of an orange changed by 20% over 7-10 years I probably wouldn't notice. (And there probably aren't websites focusing on oranges. As far as I know.)

Umm dont forget the actual amounts your dealing with :)

If an orange cost 1.5 million and then cost 3 million 7 - 10 years later you probably wont be buying to many oranges.

From 30p to 60p no one gives a damn its to small a number. The impact is less when the financial burden is less.

anyways as part of my healthier lifestyle my pizza is cooked (ive decided to over cook it and burn out all the bad calories, ok so ill lose some nutrients here and there but carbon can be to bad for ya)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.