Realistbear Posted August 17, 2007 Share Posted August 17, 2007 (edited) http://www.mirror.co.uk/news/topstories/20...89520-19649306/ What the shares meltdown means for you... SHARES MELTDOWN 17/08/2007 HOUSE PRICES Unlikely to fall like the stock market thanks to a strong economy and low unemployment. Good news for homeowners, but not those trying to get on the ladder. Halifax chief economist Martin Ellis said: "If you look back to the stock market crash of 1987, the housing market remained strong." AdvertisementBradford and Bingley said: "This is a short-term issue. It would need to be much longer term to have an effect on the housing market." Is this a classic example of irresponsible journalism? If we look back to 1987 what did we see 18 monts later? Great Crash I. I know the Mirror is part of the knicker press brigade but this one takes the cake! Edited August 17, 2007 by Realistbear Quote Link to comment Share on other sites More sharing options...
Guest Shedfish Posted August 17, 2007 Share Posted August 17, 2007 Sub-prime lenders - those lending to people with the worst credit ratings - are now much more cautious. Two have stopped lending altogether... ah, so on the UK ML-Implodometer (beta).. 2 ? Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted August 17, 2007 Share Posted August 17, 2007 The Mirror - I stopped taking this paper seriously when they decided to cover up their Page 3 girls' raspberries in the mid-80s. Quote Link to comment Share on other sites More sharing options...
vfr Posted August 17, 2007 Share Posted August 17, 2007 Halifax chief economist Martin Ellis said: "If you look back to the stock market crash of 1987, the housing market remained strong." :angry: Possibly selective journalism, did they cut the sentence? add " until the reality of the situation dawned on everyone and prices crashed" Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted August 17, 2007 Share Posted August 17, 2007 What an utter crock. If you look back at 87, the housing market was very strong indeed, it crashed 18 months later, but in that time, my flat went up from around 45k to 54k at the peak. I don't see anyone's flats going up another 20%, in the next 18 months. And more to the point, my flat was valued at 33K in 1994, so buying in 87 wasn't such a great thing. What we are seeing now is a weak housing market at the end of its run, coinciding with the stock market "correction". Is there a real rule about property lagging the stock market? I know liquidity is one reason, plus the fact that people invest in shares, whereas you live in your house (BTL bubble excepted obviously). Any other reasons? Quote Link to comment Share on other sites More sharing options...
gordonbrown Posted August 17, 2007 Share Posted August 17, 2007 What we are seeing now is a weak housing market at the end of its run, coinciding with the stock market "correction". Is there a real rule about property lagging the stock market? I know liquidity is one reason, plus the fact that people invest in shares, whereas you live in your house (BTL bubble excepted obviously).Any other reasons? To be fair, the housing market boom really got going as the stock market crashed in the .gone bubble. I heard people saying all the cash moved into housing and other assets. Don't really believe it myself. I think the correlation is more likely to be with interest rates. Quote Link to comment Share on other sites More sharing options...
ianbeale Posted August 17, 2007 Share Posted August 17, 2007 the housing market is built on cheap and easy credit (6x I/O et all) - take that facility away and it will fall (will want to see evidence of this tightening though before the fat lady sings) Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted August 17, 2007 Share Posted August 17, 2007 To be fair, the housing market boom really got going as the stock market crashed in the .gone bubble. I heard people saying all the cash moved into housing and other assets. Don't really believe it myself. I think the correlation is more likely to be with interest rates. That's a good point, funnily enough we moved in 2000 and used the "forthcoming" property crash to get a better price on our house. Conned a little old lady out of 35k. Moowahahahahaha. (TBF it was overpriced and hadn't a prospect of selling when we came along, since like all old people's houses it had a lovely garden, but hadn't been decorated since 1970, and this was before Property Location millionaire in the sun got really popular IIRC.) Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted August 17, 2007 Share Posted August 17, 2007 the housing market is built on cheap and easy credit (6x I/O et all) - take that facility away and it will fall(will want to see evidence of this tightening though before the fat lady sings) My point exactly on another thread,seems like the central banks are pumping billions in to try to keep this afloat.I dont think it'll work as more and more people default on thier mortgages and become desperate to sell. Quote Link to comment Share on other sites More sharing options...
Roman Abramovitch Posted August 17, 2007 Share Posted August 17, 2007 This sums up todays "dead cat bounce" Stocks have rebounded but traders are "pretty much sitting on their hands," says Manoj Ladwa, a derivatives broker at TradIndex. "There is not much buying going in the market. No one is convinced this is the bottom. This is pretty much a dead cat bounce." Regards Reuters Newsmail Editor You read it here first folks Quote Link to comment Share on other sites More sharing options...
AteMoose Posted August 17, 2007 Share Posted August 17, 2007 (edited) kind of true, stock market crashes have a habit of kicking off massive HPI, which then causes prices to crash a few years after. 87 - house prices boomed, then crashed (the has hpc) the tech bubble - house prices boomed, then almost crashed (stagnated from mid 2004-mid 2006) when people loose trust the the stock market they look for other places to put money Edited August 17, 2007 by moosetea Quote Link to comment Share on other sites More sharing options...
Fancypants Posted August 17, 2007 Share Posted August 17, 2007 This sums up todays "dead cat bounce"Stocks have rebounded but traders are "pretty much sitting on their hands," says Manoj Ladwa, a derivatives broker at TradIndex. "There is not much buying going in the market. No one is convinced this is the bottom. This is pretty much a dead cat bounce." Regards Reuters Newsmail Editor You read it here first folks its a pretty weak rally so far, I must say, particularly in the light of the Dow's strong rebound last night. The market really is on the ropes now, it seems. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted August 17, 2007 Share Posted August 17, 2007 kind of true, stock market crashes have a habit of kicking off massive HPI, which then causes prices to crash a few years after. 87 - house prices boomed, then crashed (the has hpc) the tech bubble - house prices boomed, then almost crashed (stagnated from mid 2004-mid 2006) when people loose trust the the stock market they look for other places to put money The house I bought in the East midlands in April 1988 for 30K was worth 47K by the July 1989 peak.So indeed the stock market crash had a spectacular effect on the Midlands which did a Northern Island at that time.I sold it for 46K in 1991 and it would have continued to fall to about the 40K range in the trough of 1993-1996. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted August 17, 2007 Author Share Posted August 17, 2007 kind of true, stock market crashes have a habit of kicking off massive HPI, which then causes prices to crash a few years after. 87 - house prices boomed, then crashed (the has hpc) the tech bubble - house prices boomed, then almost crashed (stagnated from mid 2004-mid 2006) when people loose trust the the stock market they look for other places to put money What we are seeing today is a massive shift in the credit markets due to crumbling trust in the housing market. Great Crash II is a HPC led rout. The money will not go into that which is the cause of the credit market collapse. Quote Link to comment Share on other sites More sharing options...
housesforcourses Posted August 17, 2007 Share Posted August 17, 2007 What we are seeing today is a massive shift in the credit markets due to crumbling trust in the housing market. Great Crash II is a HPC led rout. The money will not go into that which is the cause of the credit market collapse. I honestly dont think it could even if it wanted to, credit tightening is going to happen and its going to happen alot faster than it did in the states. As it becomes more and more mainstream that housprices are stagnating or dropping then the banks are going to want to cover themsleves FAST. Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 17, 2007 Share Posted August 17, 2007 Yes, the big difference this time is that the SM crashes because of HPC (in some parts of the world). Quote Link to comment Share on other sites More sharing options...
EmpiricalBear Posted August 17, 2007 Share Posted August 17, 2007 Don't forget that the end of double miras (ie: double tax relief on mortgage payments for married couples) was part of the reason for the run up of prices in 88/89, it wasn't just (or much) reallocation of SM capital. Also remember that the amount that people typically had invested in the SM in the 80's was still quite low and mostly consisted of a few privatisation issues. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted August 17, 2007 Share Posted August 17, 2007 As I have stated many times b4, in economics and finance, it is possible to take a scenario and argue for diametrically opposed outcomes. What determines which outcome prevails is sentiment. Quote Link to comment Share on other sites More sharing options...
feefifofum Posted August 17, 2007 Share Posted August 17, 2007 I definitely think the HPC will follow. There's got to be loads of BTL investors who borrowed the yen to invest in housing here and they'll be panicking and going bust, which, will may just get the already started HPC going a bit faster. feefifofum Quote Link to comment Share on other sites More sharing options...
madasafrog Posted August 17, 2007 Share Posted August 17, 2007 The problem with trying to predict the housing market is previous trends cant be relied upon to predict future values. There are too many factors that affect the price of houses. Relying on previous trends is all too easy but also a bit short sighted. Economics is more of a theory than a science. I dont think any of us can truly say whether house prices will fall or rise over the next few years. All we can do is have an educated guess. I am still on the fence. One day i feel there is going to be a crash then the next day i look at other evidence that proves there will be a continued rise. Its a tough one and a gamble whichever way you decide. Quote Link to comment Share on other sites More sharing options...
sunonmars Posted August 17, 2007 Share Posted August 17, 2007 Just seen old bushy black eyebrow chancellor boy on the tv harping on about, its all ok, don't panic, the UK economy is sound, how daft is he gonna look soon! I think the Govt has just gone in defend at all costs mode over the castle turrets with the enemy army scaling the walls. Quote Link to comment Share on other sites More sharing options...
mew too Posted August 17, 2007 Share Posted August 17, 2007 http://www.mirror.co.uk/news/topstories/20...89520-19649306/What the shares meltdown means for you... SHARES MELTDOWN 17/08/2007 HOUSE PRICES Unlikely to fall like the stock market thanks to a strong economy and low unemployment. Good news for homeowners, but not those trying to get on the ladder. I know the Mirror is part of the knicker press brigade but this one takes the cake! When we look in the mirror we see the reverse of eveything, remember POLICE becomes ECILOP. If you reverse the meaning of that sentance you have the following. HOUSE PRICES LIKELY to fall like the stock market thanks to a WEAK economy and HIGH unemployment. BAD news for homeowners, but not those trying to get on the ladder. Makes more sense like that Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted August 17, 2007 Share Posted August 17, 2007 HOUSE PRICESUnlikely to fall like the stock market thanks to a strong economy and low unemployment. Good news for homeowners, but not those trying to get on the ladder. what a load of shit. those trying to get on the ladder ARE the housing market. are they just going to swap 'upper ladder' homes amongst themselves ? Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted August 17, 2007 Share Posted August 17, 2007 Just seen old bushy black eyebrow chancellor boy on the tv harping on about, its all ok, don't panic, the UK economy is sound, how daft is he gonna look soon!I think the Govt has just gone in defend at all costs mode over the castle turrets with the enemy army scaling the walls. To be fair, it's his job to try and stem the panic. What would people think of him if he said it's going to rain human blood, we're all doomed? He knows deep inside we are up to our necks in it, but to say so means we drown straight away. After it happens, he will blame the Tories for being all negative about the situation. Double Miras definitely let it run a little longer, although I heard people in the early 90s blame it for the crash. I don't think it matters which pin does it, but there will always be one. I think Re-mortgaging in November is going to be interesting also, not only because of the rate rises the BoE have added, but because the deals will be relatively worse than recently as many have already said here. You probably won't see low margin trackers, or fixed rate deals close to base, so the problem is going to be exacerbated for the poor sausages. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted August 17, 2007 Author Share Posted August 17, 2007 As I have stated many times b4, in economics and finance, it is possible to take a scenario and argue for diametrically opposed outcomes. What determines which outcome prevails is sentiment. The Roman senators always argued that destiny is more often that not determined by the mob. When greed turns to fear. We are, IMO, in the risk aversion stage. The mob are worried and its slowly turning into fear. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.