kman Posted July 31, 2006 Share Posted July 31, 2006 What happened? all was deflating nicely round my parts then suddenely everything at record highs again. I don't understand. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted August 1, 2006 Share Posted August 1, 2006 What happened? all was deflating nicely round my parts then suddenely everything at record highs again. I don't understand. Interest rates were dropped by .25 percent late last year... Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted August 1, 2006 Share Posted August 1, 2006 It is easy to get carried away by VI hype and anecdotal evidence.I made a posting recently that suggested property in Nottingham was going up after remaining flat since 2004,this was purely based on my observation that sold signs had begun to appear.You only know what is really happening when you are a player.In June I offered 230K cash on an 1800 detached cottage,originally on at 285k,offer accepted;I later thought better of it.Yesterday I offered 240K on an imposing Edwardian detached,originally on at 295K,the vendor is prepared to deal at 245k;I'm not. Ask the players what is happening not the spectators. Quote Link to comment Share on other sites More sharing options...
Ignorant Steve Posted August 1, 2006 Share Posted August 1, 2006 It is easy to get carried away by VI hype and anecdotal evidence.I made a posting recently that suggested property in Nottingham was going up after remaining flat since 2004,this was purely based on my observation that sold signs had begun to appear.You only know what is really happening when you are a player.In June I offered 230K cash on an 1800 detached cottage,originally on at 285k,offer accepted;I later thought better of it.Yesterday I offered 240K on an imposing Edwardian detached,originally on at 295K,the vendor is prepared to deal at 245k;I'm not. Ask the players what is happening not the spectators. But this is just anecdotal evidence that you asked us to ignore! Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted August 1, 2006 Share Posted August 1, 2006 Interest rates were dropped by .25 percent late last year... This shows to me how finely balanced we are to affordable housing. 5 IR increases since Nov 2003 were gradually beginning to influence prices and then, hey presto, a touch on the tiller the other way and prices roar ahead again. In the meantime, wage increases, albeit restrained, have increased affordability a bit. This proves the reilience of the market and the extent of the jolt needed to achieve a crash. We will get 1 or 2 IR increases, but this won't crash the market. Quote Link to comment Share on other sites More sharing options...
Ignorant Steve Posted August 1, 2006 Share Posted August 1, 2006 This shows to me how finely balanced we are to affordable housing. 5 IR increases since Nov 2003 were gradually beginning to influence prices and then, hey presto, a touch on the tiller the other way and prices roar ahead again. In the meantime, wage increases, albeit restrained, have increased affordability a bit. This proves the reilience of the market and the extent of the jolt needed to achieve a crash. We will get 1 or 2 IR increases, but this won't crash the market. 2 rises in quick succession might. A lot of optimism about the future will evaporate. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted August 1, 2006 Share Posted August 1, 2006 2 rises in quick succession might. A lot of optimism about the future will evaporate. Maybe, but as I say, 5 increases (with most people expecting more still) didn't exactly cause a wholesale crash. And it recovered pretty spectacularly! Life in the old dog yet, I think. Quote Link to comment Share on other sites More sharing options...
Guest donall Posted August 1, 2006 Share Posted August 1, 2006 2 rises in quick succession might. A lot of optimism about the future will evaporate. Higher IRs are good for me ISAs. The people with Interest Only mortgages might find themselves being over-extended. Quote Link to comment Share on other sites More sharing options...
Ignorant Steve Posted August 1, 2006 Share Posted August 1, 2006 Maybe, but as I say, 5 increases (with most people expecting more still) didn't exactly cause a wholesale crash. And it recovered pretty spectacularly! Life in the old dog yet, I think. I think the spectacular recovery is not nationwide and is more linked to the long period of stagnation / small falls in London and SE since 2003 / 2004. Any area that is currently stable will be affected by 2 quick rises. London and SE will probably go back to stagnant / small falls. Quote Link to comment Share on other sites More sharing options...
bandylegs Posted August 1, 2006 Share Posted August 1, 2006 This forum focuses a lot on interest rates. However a change in sentiment could be all that is needed to get the ball rolling. Tales of success pushed prices up - tales of failure will have the opposite effect. Quote Link to comment Share on other sites More sharing options...
grasshopper Posted August 1, 2006 Share Posted August 1, 2006 The BoE 0.25% cut was important in that it brought about a stop to the decline on the yoy house price figure. It was heading into negative territory. If this had occured the accompanying headlines may have been enough to change the psychology of the market. From the Banks perspective this 0.25% reduction was a good call. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted August 1, 2006 Share Posted August 1, 2006 But this is just anecdotal evidence that you asked us to ignore! I would suggest that observing sold signs going up is anecdotal evidence but the fact that sellers are prepared to take 20% discount on original asking price is real evidence.It certainly makes a 50-55k real difference to what I would pay.The two houses mentioned are beautiful houses,it is only my bearish feelings that even greater discounts are to come that has untill now kept me an STRer. l Quote Link to comment Share on other sites More sharing options...
Ignorant Steve Posted August 1, 2006 Share Posted August 1, 2006 This forum focuses a lot on interest rates. However a change in sentiment could be all that is needed to get the ball rolling. Tales of success pushed prices up - tales of failure will have the opposite effect. Hence my comment re optimism evaporating. IR are a fundamental driver of sentiment, as are increasing utilities, petrol, orange juice etc. Quote Link to comment Share on other sites More sharing options...
Irkuiem Posted August 1, 2006 Share Posted August 1, 2006 I believe people also miss the point that the lenders have also reduced their rates since 2004, by about 1%. With the demand still there that has to have an effect. This rates are going up now though. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted August 1, 2006 Share Posted August 1, 2006 I would suggest that observing sold signs going up is anecdotal evidence but the fact that sellers are prepared to take 20% discount on original asking price is real evidence.It certainly makes a 50-55k real difference to what I would pay.The two houses mentioned are beautiful houses,it is only my bearish feelings that even greater discounts are to come that has untill now kept me an STRer. l I think you need to check the definition of anecdotal! Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted August 1, 2006 Share Posted August 1, 2006 I think you need to check the definition of anecdotal! Point taken.What i should have said that anecdotal evidence gathered at a distance is less reliable than anecdotal evidence gathered at the front line ie.actually buying or selling. Quote Link to comment Share on other sites More sharing options...
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