Where Is The House Price Crash Then?

[Realty Cheque]

Now in the last 6 weeks, everything has changed. Next to no price reductions and average asking prices have gone back up by about 3.5%.

<{POST_SNAPBACK}>

I can only guess people oop North must still be nursing that festive hangover and haven't being taking notice of the press, or the estate agencies have been taken over by those villainous Southerners squeezing every last drop out of the market.

My guess it's the latter!

[van hoogstraten]

i have not been on here for some time now, am presently doing up a £1 million property in cenrtal london.

am still interested to see hope triumphing over the facts.

i still hold to my long term theory that prices will fall,bbut gradually and over some considerable time.

a crash in the spectacular way that people want is highly unlikely.

<{POST_SNAPBACK}>

Make that an £800k property

[Realty Cheque]

Make that an £800k property

I'll second that!

Percentage wise that's only a 20% drop and 9 of that would have already been negotiated off the asking price!

[Time to raise the rents.]

Lack of forced sellers certainly propped up the Japanese market.  I like it TTRTR you don't like the fact that Van listed lots of people who are  forced sellers so you redefine the term.  That's classic denial. Next I presume you'll get angry....

<{POST_SNAPBACK}>

Actually, first I'll laugh at the mention of Japan again. You know, the place where Tokyo when MEW'd could have bought America. Then I'll laugh at you thinking I've redefined forced sellers. I'll agree that Van's list is a list of keen sellers, but certainly not forced sellers.

And what's this about getting angry?

[Guest wrongmove]

I'll agree that Van's list is a list of keen sellers, but certainly not forced sellers.

<{POST_SNAPBACK}>

You're doing it again

"Keen sellers" ! Euphemism of the week !

If people divorce or move away from an area, many of them will have to sell. It may come as a shock to some, but the prospect of being an absent landlord is many peoples idea of purgatory. Especially when the rent doesn't even cover the mortgage. Voids are not an option to many people who would find themselves paying twice. They basically have to sell.

[Time to raise the rents.]

You're doing it again 

"Keen sellers" ! Euphemism of the week !

If people divorce or move away from an area, many of them will have to sell. It may come as a shock to some, but the prospect of being an absent landlord is many peoples idea of purgatory. Especially when the rent doesn't even cover the mortgage. Voids are not an option to many people who would find themselves paying twice. They basically have to sell.

<{POST_SNAPBACK}>

The only problem is that bear assumptions include the seller paying for the cost of the property they're selling. But in reality if they have a mortgage, it's probably less than half of most asking prices & therefore not as much of an issue as you might think.

I accept the lost opportunity arguments, but those are for the more intelligent citizens amoungst us.

[Guest wrongmove]

The only problem is that bear assumptions include the seller paying for the cost of the property they're selling. But in reality if they have a mortgage, it's probably less than half of most asking prices & therefore not as much of an issue as you might think.

I accept the lost opportunity arguments, but those are for the more intelligent citizens amoungst us.

<{POST_SNAPBACK}>

They may not have to pay the full cost of their original property (although many will - prices flat for 2 years now in parts of SE).

But they will certainly have to pay the full cost of their new abode. Without selling, the ones with lots of equity would have to downsize bigtime. When they have just had a new baby, for example ? Admit it TTRTR, there is not a gun at their head, but many will effectively be forced to sell.

[Time to raise the rents.]

There's another bear assumption, that they've moved & are now paying for 2 places!

[Guest wrongmove]

There's another bear assumption, that they've moved & are now paying for 2 places! 

<{POST_SNAPBACK}>

I thought that was your assumption. That they can move and let their old property.

My assumption is that they would have to sell before they move. That they would not be "keen" sellers, but forced ones

[Time to raise the rents.]

I thought that was your assumption. That they can move and let their old property.

My assumption is that they would have to sell before they move. That they would not be "keen" sellers, but forced ones 

<{POST_SNAPBACK}>

My assumption is that they have the option of letting out instead of selling. Your assumption (being a general bear assumption) is that they have massive outgoings and are desperate.

Clearly different assumptions. What can make the bear assumptions correct for a large portion of the market? Much higher IR's. I think we all know my view on whether those are coming soon or not.

[Guest wrongmove]

My assumption is that they have the option of letting out instead of selling. Your assumption (being a general bear assumption) is that they have massive outgoings and are desperate.

<{POST_SNAPBACK}>

My assumption is that some of them have large outgoings and are desperate. The bull assumption seems to be that none of them do

eg. household 1, income £50k, mortage £150k, equity £100, cash £0k - how are they going to buy a similar prop without selling first ?

household 2, income £20k, mortgage £40k, equity £120k, ditto.

household 3, income £40k, mortgage £120k, equity £0, rental yeild 4% ditto,

etc. etc.

I know that you will reply without addressing these points but I think others who are not "desirous of losing money" will make up their own minds !

[Yonmon]

The only problem is that bear assumptions include the seller paying for the cost of the property they're selling. But in reality if they have a mortgage, it's probably less than half of most asking prices & therefore not as much of an issue as you might think.

I accept the lost opportunity arguments, but those are for the more intelligent citizens amoungst us.

<{POST_SNAPBACK}>

You've just given a compelling reason supporting the bearish cae. If most sellers have 50%+ of equity in their properties, then they have a huge amount of scope to take a cut from asking price and still be quids in.

That's the classic boom/bust dyanmic- the growth of the bubble creates the conditions that facilitate its collapse.

It's a beautiful thing.