homeowner Posted November 23, 2006 Share Posted November 23, 2006 So we are all agreed there is going to be a crash.. What worries me is there are a lot of people on this site and in the wider community who after being priced out of the market, now have substantial cash reserves. 10 years ago the money that they have in their personal coffers may even have been refered to as a fortune. Now my worry is: after all that saving and watching the housing market; when a drop in prices does come desperation gets the better of this cash rich group. When they rush to make that long awaited purshase they will in effect be obstructing the full force of the crash witch they have so long awaited. Quote Link to comment Share on other sites More sharing options...
zag2me Posted November 23, 2006 Share Posted November 23, 2006 This has been my point all along, all these people here waiting to time buying a house perfectly will be waiting alot longer than they anticipate. You would be mad to buy a house in a falling market, its all about buying at the bottom. That will be 2-3 years after we start seeing price falls. So people here with big deposits will be waiting a long time. Quote Link to comment Share on other sites More sharing options...
Dames Posted November 23, 2006 Share Posted November 23, 2006 So we are all agreed there is going to be a crash.. What worries me is there are a lot of people on this site and in the wider community who after being priced out of the market, now have substantial cash reserves. 10 years ago the money that they have in their personal coffers may even have been refered to as a fortune. Now my worry is: after all that saving and watching the housing market; when a drop in prices does come desperation gets the better of this cash rich group. When they rush to make that long awaited purshase they will in effect be obstructing the full force of the crash witch they have so long awaited. LOL Quote Link to comment Share on other sites More sharing options...
cash_buyer Posted November 23, 2006 Share Posted November 23, 2006 The smart people will wait until the prices stop falling. In a falling market, a bargain today may be over priced a few months later. Quote Link to comment Share on other sites More sharing options...
homeowner Posted November 23, 2006 Author Share Posted November 23, 2006 Thats my point the not too smart people may not wait... and dive in as soon as things become a little more affordable.. I've seen this kind of talk already on this site... I" ve been watching a house for x amount its gone down I've put in an offer and its been excepted" This kind of diving in too early would actually stop a crash reaching its lowest point. Quote Link to comment Share on other sites More sharing options...
Europa Posted November 23, 2006 Share Posted November 23, 2006 This has been my point all along, all these people here waiting to time buying a house perfectly will be waiting alot longer than they anticipate. You would be mad to buy a house in a falling market, its all about buying at the bottom. That will be 2-3 years after we start seeing price falls. So people here with big deposits will be waiting a long time. But will people see weaker prices as an opportunity to buy, or will they anticipate further falls ahead? Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted November 23, 2006 Share Posted November 23, 2006 So we are all agreed there is going to be a crash.. What worries me is there are a lot of people on this site and in the wider community who after being priced out of the market, now have substantial cash reserves. 10 years ago the money that they have in their personal coffers may even have been refered to as a fortune. Now my worry is: after all that saving and watching the housing market; when a drop in prices does come desperation gets the better of this cash rich group. When they rush to make that long awaited purshase they will in effect be obstructing the full force of the crash witch they have so long awaited. this is the 'money on the sidelines' argument that has been dealt with many times before, as I recall. Sorry to parade-piss you. Quote Link to comment Share on other sites More sharing options...
zag2me Posted November 23, 2006 Share Posted November 23, 2006 Its simple economics, if prices are rising, buy. If prices are falling wait. By the way, prices are still rising. Quote Link to comment Share on other sites More sharing options...
lulu Posted November 23, 2006 Share Posted November 23, 2006 So we are all agreed there is going to be a crash.. What worries me is there are a lot of people on this site and in the wider community who after being priced out of the market, now have substantial cash reserves. 10 years ago the money that they have in their personal coffers may even have been refered to as a fortune. Now my worry is: after all that saving and watching the housing market; when a drop in prices does come desperation gets the better of this cash rich group. When they rush to make that long awaited purshase they will in effect be obstructing the full force of the crash witch they have so long awaited. But at least they wouldnt be buying at the top. The security of having a place of my own and a not too huge a mortgage would be worth far more to me than hoping to catch the bottom of the market. It may mean I am throwing money down the drain but hey nothing is perfect and it would probably still be moresensible than renting a flat on my own. Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted November 23, 2006 Share Posted November 23, 2006 This has been my point all along, all these people here waiting to time buying a house perfectly will be waiting alot longer than they anticipate. You would be mad to buy a house in a falling market, its all about buying at the bottom. That will be 2-3 years after we start seeing price falls. So people here with big deposits will be waiting a long time. I have been waiting since 2002. I also have a large deposit and if prices do start to fall then there is no way I would squander it in a falling market. If prices don’t fall then there’s no way I could afford to buy into the market at the current levels (or at 2002 levels). So personally I have no choice but to wait for as long as it takes. Quote Link to comment Share on other sites More sharing options...
homeowner Posted November 23, 2006 Author Share Posted November 23, 2006 You have my point exactly... You are a person who just wants a house as do we all. You have some money put aside and when the time comes you will act.. You dont want to wait for the full extent of any crash all you are interested in is having a nice place to live as soon as possible. I belive their are many people like you and (with no disrespect whatsoever this is just speculation) its people like you who will prevent a full scale crash. Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted November 23, 2006 Share Posted November 23, 2006 But at least they wouldnt be buying at the top. The security of having a place of my own and a not too huge a mortgage would be worth far more to me than hoping to catch the bottom of the market. It may mean I am throwing money down the drain but hey nothing is perfect and it would probably still be moresensible than renting a flat on my own. What security when inflation is so low? The house belongs to the bank, not you. You have a choice of either renting the property you live in or renting the money to buy the property you live in. In a low inflation economy it takes longer to erode the capital of the debt meaning you pay more for the property over the long run. The cost of buying is going through the roof but rents are stable. Proof that the housing market is a bubble. Rampant house prices in a low inflation economy hardly spells out stability to me. I would rather rent and have the option of being able to move and chase the good jobs. Quote Link to comment Share on other sites More sharing options...
OurDayWillCome Posted November 23, 2006 Share Posted November 23, 2006 Its simple economics, if prices are rising, buy. If prices are falling wait. By the way, prices are still rising. Thanks for that, must go out and buy a house then because the market is rising! Muppet! Quote Link to comment Share on other sites More sharing options...
othello Posted November 23, 2006 Share Posted November 23, 2006 So we are all agreed there is going to be a crash.. What worries me is there are a lot of people on this site and in the wider community who after being priced out of the market, now have substantial cash reserves. 10 years ago the money that they have in their personal coffers may even have been refered to as a fortune. Now my worry is: after all that saving and watching the housing market; when a drop in prices does come desperation gets the better of this cash rich group. When they rush to make that long awaited purshase they will in effect be obstructing the full force of the crash witch they have so long awaited. Let's get things into perspective. Those saving and watching the market are a very small minority and will not save a falling market. As I recall from the last crash, when sentiment changes nobody wants to buy - unless they have to. Quote Link to comment Share on other sites More sharing options...
homeowner Posted November 23, 2006 Author Share Posted November 23, 2006 Dont quote me on this but I thought that in usual market conditions FTB make up 30% of the market. Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted November 23, 2006 Share Posted November 23, 2006 Its simple economics, if prices are rising, buy. If prices are falling wait. By the way, prices are still rising. Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted November 23, 2006 Share Posted November 23, 2006 Dont quote me on this but I thought that in usual market conditions FTB make up 30% of the market. I thought it was over 50% http://www.housepricecrash.co.uk/graphs-fi...time-buyers.php And now it's about 11% and that's when they've been fudged to include return buyers to the market (who took a break to rent) and who have equity from a previous house sale. Its simple economics, if prices are rising, buy. If prices are falling wait. By the way, prices are still rising. What do you do on the day they turn. Jog on the spot? That’s pretty bad advice if you buy the day before the market turns. Quote Link to comment Share on other sites More sharing options...
Selling up Posted November 23, 2006 Share Posted November 23, 2006 One of my favourite books, the Motley Fool guide to investing makes a vital point: Prices, at time of decision making, are never RISING or FALLING. They HAVE RECENTLY RISEN or FALLEN. That is not the same thing! Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted November 23, 2006 Share Posted November 23, 2006 When the fall comes, jobs will be lost, some of the people will have to sell up. This will spiral all the way down. Quote Link to comment Share on other sites More sharing options...
lulu Posted November 23, 2006 Share Posted November 23, 2006 What security when inflation is so low? The house belongs to the bank, not you. You have a choice of either renting the property you live in or renting the money to buy the property you live in. In a low inflation economy it takes longer to erode the capital of the debt meaning you pay more for the property over the long run. The cost of buying is going through the roof but rents are stable. Proof that the housing market is a bubble. Rampant house prices in a low inflation economy hardly spells out stability to me. I would rather rent and have the option of being able to move and chase the good jobs. But prices need to drop for me to achieve my aim of a one bedroom flat in an ok part of town - so the mortgage I will need will be less than it would be if I went out tomorrow (in total - maybe the monthy payments will be higher) - I want prices to drop and I am convinced that once they are dropping the BTL crowd will disappear and demand will vanish, as everyone will be waiting for the bottom of the market - so it might be a good time to get hold of something. Hence when I can afford to buy somewhere I will try to - I am not in this to make money just to have somewhere secure to live (where I do not have to move every 6 months at the whim of a LL or pay silly fees to letting agents for the privilage of them showing me around) Quote Link to comment Share on other sites More sharing options...
since the beginning Posted November 23, 2006 Share Posted November 23, 2006 Rising IR will scupper many potential FTB chance of catching the falling knife. Coupled with sentiment which will deter many more. Finally who is going to lend 10 x Salary on a falling market. I reckon MEW has had the effect of putting off the fact the many can't afford the houses they are living in, I wouldn't be suprised if MEW is being used to pay the mortgage - mad but probably true. Quote Link to comment Share on other sites More sharing options...
Converted Lurker Posted November 23, 2006 Share Posted November 23, 2006 So we are all agreed there is going to be a crash.. What worries me is there are a lot of people on this site and in the wider community who after being priced out of the market, now have substantial cash reserves. 10 years ago the money that they have in their personal coffers may even have been refered to as a fortune. Now my worry is: after all that saving and watching the housing market; when a drop in prices does come desperation gets the better of this cash rich group. When they rush to make that long awaited purshase they will in effect be obstructing the full force of the crash witch they have so long awaited. OK you're wrong on one point IMHO, the cash reserve argument, the majortiy of 'live' FTB mortgage enquiries are for 95-100 mortgages. Various data points to the average savings of the Great British public being virtually zero (other than the temporary wealth of mew sitting in the bank as it gets whittled down to zero..) If you're 'priced out' you're 'priced out', the only hope is for a signifacant correction - perhaps 20%. If increasnig interest rates also help cause this, very few amateur BTL players will be buying will they, with dearer money, in a falling market, with voids and disastrous yields? The future for the FTB in isolation is bright IMHO. Quote Link to comment Share on other sites More sharing options...
Ethel Posted November 23, 2006 Share Posted November 23, 2006 Dont quote me on this but I thought that in usual market conditions FTB make up 30% of the market. Whatever "usual" market conditions actually are. The current situation certainly isn't "usual", and neither is a crashing market. So what exactly is the point you are trying to make here? Quote Link to comment Share on other sites More sharing options...
sittingpretty Posted November 23, 2006 Share Posted November 23, 2006 (edited) On average it takes 3 to 4 months to exchange, which means you will already be into negative equity on your offer before you exchange, these sort of buyers will pull out before exchange making the crash situation worse. Edited November 23, 2006 by sittingpretty Quote Link to comment Share on other sites More sharing options...
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