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

Wet Dream Come True

Recommended Posts

The Wall St Journal has finally blown the whistle. Todays front page has stated there is a slump in house sales. What's more, the median house price adjusted for inflation has fallen relative to this time last year with actual growth of just 0.9%. It seems like heaven.

That's apparently the tip of the iceberg since they quote regional examples of price meltdown. One example is a house in Virgina which was appraised at 1.1mln USD. The owner needs to sell to raise funds for retirement, months later the house was unsold and she was advised to put the house up for sale at an auction. The sale price? More heaven. It sold for $575k! That's a lovely five bedroom house, on half an acre for the price of a scabby terraced house for in London. I'm starting to dribble..............

Share this post


Link to post
Share on other sites

For some on the ground insights into what is happening in the US the venerable WSJ have an excellent blog which you can contribute to--its edited though. Yours truly was on there when living in the States a couple of years ago and I am tempted to post an "I told you so" thread. The Bears are having a field day on there at the moment wiping the bulls faces in it!

http://discussions.realestatejournal.com/R...20Discussions/1

Edited by Realistbear

Share this post


Link to post
Share on other sites

Of course its not just the USA there is an unfolding crash in Australia too, that said I have been told the west coast is unaffected - anyone know if thats true or not?

HPC - coming soon, to a country near(er) you? :D

Share this post


Link to post
Share on other sites

The Wall St Journal has finally blown the whistle. Todays front page has stated there is a slump in house sales. What's more, the median house price adjusted for inflation has fallen relative to this time last year with actual growth of just 0.9%. It seems like heaven.

That's apparently the tip of the iceberg since they quote regional examples of price meltdown. One example is a house in Virgina which was appraised at 1.1mln USD. The owner needs to sell to raise funds for retirement, months later the house was unsold and she was advised to put the house up for sale at an auction. The sale price? More heaven. It sold for $575k! That's a lovely five bedroom house, on half an acre for the price of a scabby terraced house for in London. I'm starting to dribble..............

In about 2001 in Candada near Toronto prices for extremely nice large 4 bedroom houses were about £89,000 (CAN$160,000) brand new. Unless they have forgotten how to build houses that cheap that's a target price for the North American market.

Edited by Della

Share this post


Link to post
Share on other sites

US = huge country, huge amounts of land to build houses on, plentiful supply of good family homes

UK = fairly small country, very restrictive planning laws, shortage of good family homes

I could see a crash in the market for flats in parts of the UK because I think they've been oversupplied in many cities and "apartment living" will always be seen as inferior to living in a proper house.

However I think the prices of good family homes will be surprisingly resiliant, there's just not enough of them being built.

Share this post


Link to post
Share on other sites

US = huge country, huge amounts of land to build houses on, plentiful supply of good family homes

UK = fairly small country, very restrictive planning laws, shortage of good family homes

I could see a crash in the market for flats in parts of the UK because I think they've been oversupplied in many cities and "apartment living" will always be seen as inferior to living in a proper house.

However I think the prices of good family homes will be surprisingly resiliant, there's just not enough of them being built.

Ah yes the ol' its different in this country/this town/this street/this family...

Given the reasons you supplied above:

US = huge country, huge amounts of land to build houses on, plentiful supply of good family homes

Why did the US suffer the bubble in the first place? eh? eh?? :)

Share this post


Link to post
Share on other sites

US = huge country, huge amounts of land to build houses on, plentiful supply of good family homes

UK = fairly small country, very restrictive planning laws, shortage of good family homes

I could see a crash in the market for flats in parts of the UK because I think they've been oversupplied in many cities and "apartment living" will always be seen as inferior to living in a proper house.

However I think the prices of good family homes will be surprisingly resiliant, there's just not enough of them being built.

The US and UK still went down together in the Big Crash and the Great Crash--same timing and same depth. We both have speculative, sentiment driven markets with a lot of BTLs and 2nd home buying. When it goes bad and the economy goes into recession everyone rushed for the exit. Great Crash 2 will be no different.

Share this post


Link to post
Share on other sites

US = huge country, huge amounts of land to build houses on, plentiful supply of good family homes

UK = fairly small country, very restrictive planning laws, shortage of good family homes

I could see a crash in the market for flats in parts of the UK because I think they've been oversupplied in many cities and "apartment living" will always be seen as inferior to living in a proper house.

However I think the prices of good family homes will be surprisingly resiliant, there's just not enough of them being built.

Whilst it is true that most people DESIRE to live in a house (preferably detached, 4+ beds, 2500sq. ft.+, garage, large garden), the fact is that maintaining such a property is beyond the means of the vast majority of people.

Personally I think the mix is not that far off what is required and what is affordable (in maintenance terms). The problem is simply prices, due to excessive credit supply.

Share this post


Link to post
Share on other sites

US = huge country, huge amounts of land to build houses on, plentiful supply of good family homes

UK = fairly small country, very restrictive planning laws, shortage of good family homes

I could see a crash in the market for flats in parts of the UK because I think they've been oversupplied in many cities and "apartment living" will always be seen as inferior to living in a proper house.

However I think the prices of good family homes will be surprisingly resiliant, there's just not enough of them being built.

Nope, housing is crashing in the US because they are not affordable any more, not because of any land issue.

The Japs were in the same situation in '91 as the UK are in now, and they used the same arguments being touted around the UK now.

Lack of houses, small island, immigrants, booming economy, etc. Their property slumped 60% over a 10 year period.

Houses are high because of cheap money. M4 has been expanding in the UK by 12% yoy for a few years now - that's why houses have gone up - and M4 contracting will cause it to go down.

BOOM 'N' BUST!

Share this post


Link to post
Share on other sites

there are so many bitter and twisted people on this site with such chips on their shoulders its amazing!

grow up get lives and get buying property!

also, as I understand it, almost 90% of the UK is undeveloped. It's planning, not land, that causes the bottleneck.

Share this post


Link to post
Share on other sites

its absolutely ridiculous to say there is a housing crash in the UK, its patently not the case, and you want cause one by rejoicing at every "negative" piece of economic news whilst ignoring the positives and the absolute, undisputed fact that people all over the country continue to buy and sell houses in their thousands and manage to do so affordably and with calculated risk.

The site used to be positive and balanced. No wonder all the main posters either left (or bought houses, then left).

It's really short sighted, stupid (and bad karma) to be celebrating items of economic analysis which are bad news for everyone when they do occur and wishing / hoping / the economic position of the country / world will "get worse". You would in all likelyhood not be immune from a downturn in the economy (not that one looks likely with current 3.2% annualised growth this year).

Your negative, defensive and simplistic attitudes which inform your thinking will prevent you from ever taking risks, and getting on with and enjoying your lives fruitfully instead of being bitter and blaming everyone esle for your troubles, and wishing them ill.

It is not healthy and i hope new members to this site realise the essential negativity going on on this forum is more akin to an economic "doomsday" fan club than any serious forum for rational views.

Share this post


Link to post
Share on other sites

its absolutely ridiculous to say there is a housing crash in the UK, its patently not the case, and you want cause one by rejoicing at every "negative" piece of economic news whilst ignoring the positives and the absolute, undisputed fact that people all over the country continue to buy and sell houses in their thousands and manage to do so affordably and with calculated risk.

The site used to be positive and balanced. No wonder all the main posters either left (or bought houses, then left).

It's really short sighted, stupid (and bad karma) to be celebrating items of economic analysis which are bad news for everyone when they do occur and wishing / hoping / the economic position of the country / world will "get worse". You would in all likelyhood not be immune from a downturn in the economy (not that one looks likely with current 3.2% annualised growth this year).

Your negative, defensive and simplistic attitudes which inform your thinking will prevent you from ever taking risks, and getting on with and enjoying your lives fruitfully instead of being bitter and blaming everyone esle for your troubles, and wishing them ill.

It is not healthy and i hope new members to this site realise the essential negativity going on on this forum is more akin to an economic "doomsday" fan club than any serious forum for rational views.

steady on, cuckoo. People are entitled to their opinion. As am I, which is why I just offloaded all my BTLs. I just dont see how a 2% yield is an effective investment. Looks like Dr Bub is right, and we are set for a 'correction' that will make your eyes water.

If you really are an estate agent, you shouldn't worry - there will be lots of nice repossessions for you all the way to the bottom, and people like me, sniping at bargains all the way down (I'll wait for the first 15% falls nationwide to grip before beginning, of course. Silly offers only get accepted when fear has turned people silly).

Share this post


Link to post
Share on other sites

Of course its not just the USA there is an unfolding crash in Australia too, that said I have been told the west coast is unaffected - anyone know if thats true or not?

There is definitely no crash happening in Australia. Sydney has basically stood still for a while and Melbourne slowed down, but most other places are showing steady growth, even with the recent interest rate hikes (note the plural). The west is more than unaffected, Perth has gone nuts for a few years now and even Darwin has seen big percentage points (admittedly from a low starting position). When places like Darwin, possibly the weirdest place on the planet full of thousand yard stare freak runaways, dropouts and drunk military boys, show figures like this, this time it truly is different.

Share this post


Link to post
Share on other sites

you think so? i don't see it. OK , I am a VI and own a property so naturally don't want to see falls in values (although for me it is my roof over my head, not something to speculate on, i sometimes think people should get back to this). If there really is pent up demand and hordes of people are desperate to afford a property, then surely small falls would see as you say, people queueing up to snap them up?

also , the amount of people who have bought with 3, 5 or more years interest rate lock ins mean the market is not nearly as flexible in terms of responding to IR rises as used to be the case when everyone was on variable and the BOE was merely adjusting rates when it was politically expedient.

i do see a "soft" landing and if you look at all the "crashes" in house prices and "slowdowns" in economic growth forecast repeatedly since 1999, you will see that prices have always softened and not crashed.

Most of the price rises in London occurred in 98-2001/2, and there really hasn't been much movement other than by inflation, since , in many areas and we''re late 2006. I reckon that affordbility for many has actually improved since 2003, albeit marginally.

Fact - the averahe age at which people are buying their first homes has actually fallen again.

Share this post


Link to post
Share on other sites
Guest xeouialp

Well that's all very interesting guys but when are we going to hear about this wet dream come true? Sounds like a tautology if you don't mind me saying so.

Share this post


Link to post
Share on other sites

If there really is pent up demand and hordes of people are desperate to afford a property, then surely small falls would see as you say, people queueing up to snap them up?

Yes - it's called a suckers rally, and we've just witnessed one, thanks to last August's rate cut. Thing with suckers rallies is they dont keep happening ad infinitum with the market bobbing along the top.

Usually there is one, followed a drop. Occasionally you get two suckers rallies - the so called head and shoulders top [as the UK market has just experienced] which is followed by much greater/faster falls

Share this post


Link to post
Share on other sites
Guest grumpy-old-man

Well that's all very interesting guys but when are we going to hear about this wet dream come true? Sounds like a tautology if you don't mind me saying so.

you have missed out the very LONG impending downward slide in your avatar :unsure:;)

Edited by grumpy-old-man

Share this post


Link to post
Share on other sites

Yes - it's called a suckers rally, and we've just witnessed one, thanks to last August's rate cut. Thing with suckers rallies is they dont keep happening ad infinitum with the market bobbing along the top.

Usually there is one, followed a drop. Occasionally you get two suckers rallies - the so called head and shoulders top [as the UK market has just experienced] which is followed by much greater/faster falls

the whole suckers rally or greater fool rally thing, we've been hearing about these for about 5 years. i don't buy it. markets are far more complex than this, people forget that property does not act like shares.

Share this post


Link to post
Share on other sites

also , the amount of people who have bought with 3, 5 or more years interest rate lock ins mean the market is not nearly as flexible in terms of responding to IR rises as used to be the case when everyone was on variable and the BOE was merely adjusting rates when it was politically expedient.

So if you bought a house to live in or BTL in 2003, and you were on a 3 year deal, when would you need to commit to another. In 2006! And guess what interest rates have gone up while you were fixed and your next deal will be on a higher IR. Even the people with 12 months left to run must be getting nervous if they are finding their fixed deal tight, the thought of a sudden 2% plus increase hitting you must be quite sobering!

Share this post


Link to post
Share on other sites

you think so? i don't see it. OK , I am a VI and own a property so naturally don't want to see falls in values (although for me it is my roof over my head, not something to speculate on, i sometimes think people should get back to this). If there really is pent up demand and hordes of people are desperate to afford a property, then surely small falls would see as you say, people queueing up to snap them up?

also , the amount of people who have bought with 3, 5 or more years interest rate lock ins mean the market is not nearly as flexible in terms of responding to IR rises as used to be the case when everyone was on variable and the BOE was merely adjusting rates when it was politically expedient.

i do see a "soft" landing and if you look at all the "crashes" in house prices and "slowdowns" in economic growth forecast repeatedly since 1999, you will see that prices have always softened and not crashed.

Most of the price rises in London occurred in 98-2001/2, and there really hasn't been much movement other than by inflation, since , in many areas and we''re late 2006. I reckon that affordbility for many has actually improved since 2003, albeit marginally.

Fact - the averahe age at which people are buying their first homes has actually fallen again.

There are quite a few homeowners who would like to see a moderate to severe correction of the order of 50% or so to allow their kids to buy a place. Also, those who own their house or have a small mortgage without MEW debts could care a less if their property dropped 80% as everything is relative. The only ones who will suffer in the next crash will be BTLers and overleveraged/geared OOs. Those who have too much MEW debt will feel the pain also.

As Merv said: house prices are a matter of opinion whereas debt is real. When the BoJ announced they were tightening credit this Spring, that was the last call to get out as many warned that interest rate sensitive assets would feel some pain in the months and years ahead. Those who stayed in too long can't blame anyone for their losses but themselves for burying their heads in the sand and believing the EAs when they said houses prices only go up or there will be a "soft landing."

the whole suckers rally or greater fool rally thing, we've been hearing about these for about 5 years. i don't buy it. markets are far more complex than this, people forget that property does not act like shares.

Property behaves exactly like shares in a speculative market. The only difference is that with shares you can sell with the click of a mouse. For property you have to wait and wait and wait. If you get caught in a chain during the downdraft you are at the mercy of prices months down the road if you are lucky to get out. The whole BTL market is speculative and sentioment driven--just like shares. As Merv said......House prices etc.

Share this post


Link to post
Share on other sites
Guest xeouialp

you have missed out the very LONG impending downward slide in your avatar :unsure:;)

Oh I see the connection now. Things often go up when you want them to go down. Thanks Grumps.

Share this post


Link to post
Share on other sites

I agree with Cuckoo and look forward to a soft landing as prices fall between 20 and 40%. Market forces are cetainly complex making it very difficult to understand why another quater point increase in interest rates will result in a slide of 10%. Of course, this is just speculation and cuckoos spit on speculators don't they? ........... hmmmm wasn't it speculation that drove up house prices.... funny that. Anyway soft or hard seems like a pointless definition and we should all be looking at facts. No.1 is that the number of houses for sale in the US have nearly doubled over the past year. No. 2 is that the rolling average annual house price increase has decreased from 12% to 0.9% which means prices are falling when adjusted for inflation. No. 3 is that the slump momentum is increasing at a faster rate this month than last month so a reversal of fortune for August is very unlikely. No. 4 when the USA catches a cold EU-phobic little Britain runs the risk of bird flu.

So, while its true the market in Britain has not slumped there are grave reasons why anyone with property investments should be rapidly converting house equity into fixed investments. The smart money has already started and only fools will hold past the end of this year.

the whole suckers rally or greater fool rally thing, we've been hearing about these for about 5 years. i don't buy it. markets are far more complex than this, people forget that property does not act like shares.

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.

  • 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%



×
×
  • 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.