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Are we really at the turning point right now? Stock markets are recovering from the last couple of weeks rapidly (several stocks I invest in are back above the levels before the slump already), inflation last month was below 2%, central banks are showering folks with cash, interest rates are not going up fast anywhere soon...so are we bears being too over eager in thinking that it's all coming crashing down?

My guess is that we need another significant event yet before the great housing crash starts, such as a major bank getting into serious trouble over sub-prime or several hedge funds going under...

What do folks think? Too early for the crash or has it really started?

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Are we really at the turning point right now? Stock markets are recovering from the last couple of weeks rapidly (several stocks I invest in are back above the levels before the slump already), inflation last month was below 2%, central banks are showering folks with cash, interest rates are not going up fast anywhere soon...so are we bears being too over eager in thinking that it's all coming crashing down?

My guess is that we need another significant event yet before the great housing crash starts, such as a major bank getting into serious trouble over sub-prime or several hedge funds going under...

What do folks think? Too early for the crash or has it really started?

A crash is not happening in the housing market and is unlikely to happen. As well as the stock markets recovering, central bank action looks to be managing the global cash liquidity problem, and todays market reports are of liquidity constraints starting to ease. Whats left of UK manufacturing looks to be optimistic and has healthy order books according to press reports this week. The services sector is holding up and retail spending is high. Personal debt levels are too high, but again there are reports that unsecured borrowing levels are starting to reduce. We cant tell is that is because debt is being repaid or converted to mortgage debt, but again this is possibly a small step in the right direction.

Jobless figures remain low, interest rates have either peaked or are close according to most commentators, the economy is coping with oil at $80 pb or less. The main areas of economic uncertainty are the liquidity issue which looks as though it will be painful but manageable, and the movement of a couple of million people off fixed rates onto new fixed rates that are higher than they are used to. A post on this site today said the average mortgage is £96k so i expect rate rises from 4.5% to 5.75% should be manageable. Possibly people will have to forego the odd meal out or latest pair of trainers, but i don't see economic meltdown here.

In short there are simply too many things supporting the current high level of house prices. These are stronger than the factors that would force them downwards. Only a sharp rise in the jobless rate combined with higher interest rates than we have currently will cause a decline in house prices. Anecdotal evidence that 2 bed flats in Leeds are not selling, or that mediocre houses in mediocre neighbourhoods have had the asking prices cut does not suggest a property crash is occurring.

This view will not be popular on this site and i await the inevitable barrage of abuse. However, there are simply too many factors keeping prices high and these outweigh those factors that would lead to price reductions. I don't like the situation at all. I have children who will never own a house in this country at current prices. Whether i like the situation or not, its how i see it.

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Only a sharp rise in the jobless rate combined with higher interest rates than we have currently will cause a decline in house prices.

I tend to agree with your criteria, but I still think a crash (of about 20-25% in nominal prices spread over two or three years) is imminent.

The interest rate rises are just now beginning to feed through, Mervyn King has always said it takes about twelve months for the effects to be plainly seen, and just when they really start to bite we'll see unemployment begin to tick up as the western world slides into recession.

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A crash is not happening in the housing market and is unlikely to happen. As well as the stock markets recovering, central bank action looks to be managing the global cash liquidity problem, and todays market reports are of liquidity constraints starting to ease. Whats left of UK manufacturing looks to be optimistic and has healthy order books according to press reports this week. The services sector is holding up and retail spending is high. Personal debt levels are too high, but again there are reports that unsecured borrowing levels are starting to reduce. We cant tell is that is because debt is being repaid or converted to mortgage debt, but again this is possibly a small step in the right direction.

Jobless figures remain low, interest rates have either peaked or are close according to most commentators, the economy is coping with oil at $80 pb or less. The main areas of economic uncertainty are the liquidity issue which looks as though it will be painful but manageable, and the movement of a couple of million people off fixed rates onto new fixed rates that are higher than they are used to. A post on this site today said the average mortgage is £96k so i expect rate rises from 4.5% to 5.75% should be manageable. Possibly people will have to forego the odd meal out or latest pair of trainers, but i don't see economic meltdown here.

In short there are simply too many things supporting the current high level of house prices. These are stronger than the factors that would force them downwards. Only a sharp rise in the jobless rate combined with higher interest rates than we have currently will cause a decline in house prices. Anecdotal evidence that 2 bed flats in Leeds are not selling, or that mediocre houses in mediocre neighbourhoods have had the asking prices cut does not suggest a property crash is occurring.

This view will not be popular on this site and i await the inevitable barrage of abuse. However, there are simply too many factors keeping prices high and these outweigh those factors that would lead to price reductions. I don't like the situation at all. I have children who will never own a house in this country at current prices. Whether i like the situation or not, its how i see it.

I don't agree with such a pessimistic outlook however I don't think a crash is guaranteed. The next 6 months I think will be critical in determining if a crash is going to happen. There is a lot going on, there are signs of housing market weakness, signs of credit tightening, signs of stock market problems but I think its to early to call one way or another.

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I tend to agree with your criteria, but I still think a crash (of about 20-25% in nominal prices spread over two or three years) is imminent.

The interest rate rises are just now beginning to feed through, Mervyn King has always said it takes about twelve months for the effects to be plainly seen, and just when they really start to bite we'll see unemployment begin to tick up as the western world slides into recession.

Spot on.

In fact, I may as well stop posting on here and nominate you as my proxy poster. :lol:

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the bedrock of the housing market is made up of people borrowing massive amounts of money from organisations who now don't want to lend those massive amounts anymore.

the housing market has crashed already when volumes are measured and the increase in properties for sale is taken into account

also prices are dropping or static over most of the UK.

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Low unemployment, low interest rates, high level consumer spending, strong economic output, stable government. Clearly things can only get better...or can they? Does a pendulum swing? When things are going great they continue to go great until...they get to the point where they are, well, perfect. Except for one thing, the very thing that kept that party going has stopped, everything is still great, but there is no more room for growth. Someone begins to grumble because, despite having at all, they want more, they have been conditioned that happiness comes from having more. Having more than yesterday, having more than last year, having more than the person on the train or in the car next to them in the traffic or in the yacht leaving harbour in front of them. Despite having it all this is a calamity, it is the end of civilisation, it is the collapse of the banking system, it is recession, bust, disaster. Who cares if company profits are $300M dollars, profits are the same as last year! Disaster! Who cares if people bought the same number of cars as last year, they should have bought MORE! Disaster!

Sometimes even good things come to an end...and its all down to human nature. Or is that different this time too?

Edited by ulster_exile

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'so i expect rate rises from 4.5% to 5.75% should be manageable' ??? :blink:

http://www.houseweb.co.uk/house/market/graph.html

http://www.houseweb.co.uk/house/market/irfig.html

quote name='HPC Convert' date='Aug 23 2007, 02:00 PM' post='742254']

A crash is not happening in the housing market and is unlikely to happen. As well as the stock markets recovering, central bank action looks to be managing the global cash liquidity problem, and todays market reports are of liquidity constraints starting to ease. Whats left of UK manufacturing looks to be optimistic and has healthy order books according to press reports this week. The services sector is holding up and retail spending is high. Personal debt levels are too high, but again there are reports that unsecured borrowing levels are starting to reduce. We cant tell is that is because debt is being repaid or converted to mortgage debt, but again this is possibly a small step in the right direction.

Jobless figures remain low, interest rates have either peaked or are close according to most commentators, the economy is coping with oil at $80 pb or less. The main areas of economic uncertainty are the liquidity issue which looks as though it will be painful but manageable, and the movement of a couple of million people off fixed rates onto new fixed rates that are higher than they are used to. A post on this site today said the average mortgage is £96k so i expect rate rises from 4.5% to 5.75% should be manageable. Possibly people will have to forego the odd meal out or latest pair of trainers, but i don't see economic meltdown here.

In short there are simply too many things supporting the current high level of house prices. These are stronger than the factors that would force them downwards. Only a sharp rise in the jobless rate combined with higher interest rates than we have currently will cause a decline in house prices. Anecdotal evidence that 2 bed flats in Leeds are not selling, or that mediocre houses in mediocre neighbourhoods have had the asking prices cut does not suggest a property crash is occurring.

This view will not be popular on this site and i await the inevitable barrage of abuse. However, there are simply too many factors keeping prices high and these outweigh those factors that would lead to price reductions. I don't like the situation at all. I have children who will never own a house in this country at current prices. Whether i like the situation or not, its how i see it.

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Guest DissipatedYouthIsValuable
hahahahahahahahahahahahahahahahahahahaha

>breath<

hahahahahahahahahahahahahahahahahahahahah

I agree with this testosterone faced little man.

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Guest The_Oldie
A crash is not happening in the housing market and is unlikely to happen. As well as the stock markets recovering, central bank action looks to be managing the global cash liquidity problem, and todays market reports are of liquidity constraints starting to ease. Whats left of UK manufacturing looks to be optimistic and has healthy order books according to press reports this week. The services sector is holding up and retail spending is high. Personal debt levels are too high, but again there are reports that unsecured borrowing levels are starting to reduce. We cant tell is that is because debt is being repaid or converted to mortgage debt, but again this is possibly a small step in the right direction.

Jobless figures remain low, interest rates have either peaked or are close according to most commentators, the economy is coping with oil at $80 pb or less. The main areas of economic uncertainty are the liquidity issue which looks as though it will be painful but manageable, and the movement of a couple of million people off fixed rates onto new fixed rates that are higher than they are used to. A post on this site today said the average mortgage is £96k so i expect rate rises from 4.5% to 5.75% should be manageable. Possibly people will have to forego the odd meal out or latest pair of trainers, but i don't see economic meltdown here.

In short there are simply too many things supporting the current high level of house prices. These are stronger than the factors that would force them downwards. Only a sharp rise in the jobless rate combined with higher interest rates than we have currently will cause a decline in house prices. Anecdotal evidence that 2 bed flats in Leeds are not selling, or that mediocre houses in mediocre neighbourhoods have had the asking prices cut does not suggest a property crash is occurring.

This view will not be popular on this site and i await the inevitable barrage of abuse. However, there are simply too many factors keeping prices high and these outweigh those factors that would lead to price reductions. I don't like the situation at all. I have children who will never own a house in this country at current prices. Whether i like the situation or not, its how i see it.

Seeing as you don't like the situation, you will no doubt be happy to hear this little anecdote ;).

After being on the market for over four months, the house next to me was reduced today from £425K to £395K.

There is hope for your children yet :D.

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ftse may have recovered (as unconnected indusstries might well expect to do so) but banks remain flat... until the next bad news, which seems more likely than good news.

The boil on the ftse's bottom is bad mortgages. This is being lanced, bringing the housing market down with it, and leaving private industry, hopefully, in reasonably rude health, except for those elements of it that were overexposed to the pulsating sore in the first place.

Personally, I feel that this recovery is temporary and part of a broader downward economic trend; the fact that the revious few weeks' panic happened at all is a sign of the economic imbalances that too many people have been denying, and cannot be wished away.

The macroeconomics will out.

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A crash is not happening in the housing market and is unlikely to happen. As well as the stock markets recovering, central bank action looks to be managing the global cash liquidity problem, and todays market reports are of liquidity constraints starting to ease. Whats left of UK manufacturing looks to be optimistic and has healthy order books according to press reports this week. The services sector is holding up and retail spending is high. Personal debt levels are too high, but again there are reports that unsecured borrowing levels are starting to reduce. We cant tell is that is because debt is being repaid or converted to mortgage debt, but again this is possibly a small step in the right direction.

Jobless figures remain low, interest rates have either peaked or are close according to most commentators, the economy is coping with oil at $80 pb or less. The main areas of economic uncertainty are the liquidity issue which looks as though it will be painful but manageable, and the movement of a couple of million people off fixed rates onto new fixed rates that are higher than they are used to. A post on this site today said the average mortgage is £96k so i expect rate rises from 4.5% to 5.75% should be manageable. Possibly people will have to forego the odd meal out or latest pair of trainers, but i don't see economic meltdown here.

In short there are simply too many things supporting the current high level of house prices. These are stronger than the factors that would force them downwards. Only a sharp rise in the jobless rate combined with higher interest rates than we have currently will cause a decline in house prices. Anecdotal evidence that 2 bed flats in Leeds are not selling, or that mediocre houses in mediocre neighbourhoods have had the asking prices cut does not suggest a property crash is occurring.

This view will not be popular on this site and i await the inevitable barrage of abuse. However, there are simply too many factors keeping prices high and these outweigh those factors that would lead to price reductions. I don't like the situation at all. I have children who will never own a house in this country at current prices. Whether i like the situation or not, its how i see it.

Any analysis like this is rendered worthless because it totally fails to deal with the relevant issue. Massive UK debt.

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ftse may have recovered (as unconnected indusstries might well expect to do so) but banks remain flat... until the next bad news, which seems more likely than good news.

But news only ever goes up!

There's never been a better time to watch the news!

And other rubbish jokes of a similar nature ;)

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Any analysis like this is rendered worthless because it totally fails to deal with the relevant issue. Massive UK debt.

How much analysis of massive UK debt do you want? Its a big problem and higher interest rates with people now fixing at around 5.75% rather than 4% will obviously affect things. Not enough to cause a crash IMO.

Why dont you share with us your insights into massive UK debt? :lol:

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Guest DissipatedYouthIsValuable
Are we really at the turning point right now? Stock markets are recovering from the last couple of weeks rapidly (several stocks I invest in are back above the levels before the slump already), inflation last month was below 2%, central banks are showering folks with cash, interest rates are not going up fast anywhere soon...so are we bears being too over eager in thinking that it's all coming crashing down?

My guess is that we need another significant event yet before the great housing crash starts, such as a major bank getting into serious trouble over sub-prime or several hedge funds going under...

What do folks think? Too early for the crash or has it really started?

Silly billy.

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One of the most important thing in the property market is sentiment - if enough people start thinking that property is vastly overpriced then there will be a reduction in price as people stop buying at current prices.

MY HOUSE IS WORTH SQUILLIONS

MY HOUSE IS WORTH SQUILLIONS MORE THAN A MOMENT AGO

MY HOUSE PRICE IS GOING UP AS WE SPEAK

That should put a stop to these doomsters. ;)

That and the 11% increase in population in 5 years in my area. :o

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This view will not be popular on this site and i await the inevitable barrage of abuse. However, there are simply too many factors keeping prices high and these outweigh those factors that would lead to price reductions. I don't like the situation at all. I have children who will never own a house in this country at current prices. Whether i like the situation or not, its how i see it.

May not be popular here - but i agree with your views.

the housing market has crashed already when volumes are measured and the increase in properties for sale is taken into account

also prices are dropping or static over most of the UK.

Really? you better not read this link then :blink:

http://today.reuters.co.uk/news/articleinv...S-RIGHTMOVE.xml

Seeing as you don't like the situation, you will no doubt be happy to hear this little anecdote ;).

After being on the market for over four months, the house next to me was reduced today from £425K to £395K.

There is hope for your children yet :D.

Anecdotally in the last couple of months round here - houses have sold within 3 or 4 weeks (a few at sealed bids i hear)

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"This fall is an early warning signal that even the buoyant London economy is susceptible to market forces," said Miles Shipside, Rightmove's commercial director.

What a bizarre comment! You don't need a fall in prices to argue that the economy is susceptible to market forces!

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i'm going to have to agree with PG on this one.

Ditto :D

I take it skewers that you are not familiar with the market phenomenon known as the dead cat bounce?? :P

Edit to add: Although it is looking more like some silly beggar put a trampoline under said moggy in the form of cash injections-wont work for long tho' mark my words ;)

Edited by stonethecrows

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