Will There Ever Be Another Boom ?

[Pent Vaer]

As I posted here

most of a house's price in a boom is made up of a time-varying factor X.

Since nethouseprices is a recent phenomenon, maybe it will accelerate the bust (as previously

posted). That's been mentioned before. But I'm thinking there's a good chance it will stop future

(sentiment driven) booms *completely*. When the market isn't already going up,

where's the incentive to pay that extra 20k that you can see the vendor is trying to put on top, unless the basics of the house have improved in some way ? How does the boom get started

when the 'nethouseprice effect' is in operation ?

Maybe the best thing Gordon could have done to stop the housing boom-busts as promised, was to push for increases in market clarity many years ago.

Pent

[the_duke_of_hazzard]

As I posted here

most of a house's price in a boom is made up of a time-varying factor X.

Since nethouseprices is a recent phenomenon, maybe it will accelerate the bust (as previously

posted). That's been mentioned before. But I'm thinking there's a good chance it will stop future

(sentiment driven) booms *completely*. When the market isn't already going up,

where's the incentive to pay that extra 20k that you can see the vendor is trying to put on top, unless the basics of the house have improved in some way ? How does the boom get started

when the 'nethouseprice effect' is in operation ?

Maybe the best thing Gordon could have done to stop the housing boom-busts as promised, was to push for increases in market clarity many years ago.

Pent

<{POST_SNAPBACK}>

I doubt it. You have transparency in other markets, it doesn't stop bubbles - witness dotcom boom. The bubbles may build up in a different way though.

[Pent Vaer]

I doubt it. You have transparency in other markets, it doesn't stop bubbles - witness dotcom boom. The bubbles may build up in a different way though.

<{POST_SNAPBACK}>

Au contraire, with a house, you can go look at it, check out the neighbourhood, have it surveyed.

I think that gives you a much better idea of it's current and future basic value than a company prospectus for a tech startup!

Pent

[the_duke_of_hazzard]

Au contraire, with a house, you can go look at it, check out the neighbourhood, have it surveyed.

I think that gives you a much better idea of it's current and future basic value than a company prospectus for a tech startup!

Pent

<{POST_SNAPBACK}>

Nope. You'll still have swings of sentiment (employment levels, interest rates, spring bounces (!)) so there'll still be reason to pay over the odds.

We know the basic value of a house, but people have still been prepared to pay over the odds...

[Killer Bunny]

<{POST_SNAPBACK}>

I really am not convinced that there will be.

We don't have the prime factors anymore ie

growth in dual income households, long term reduction in interest rates, baby boom of a post-war nature and so on.

Will I buy in a few years - probably. But I will not expect to make a vast killing and be able to retire off my house.

[The Masked Tulip]

Yes, there will always be booms and bust but, like the stockmarket, I think the next housing boom will be some way off after alot of people get stung this time around.

I also think, because of trends in employment, technology and liefstyle, that the next housing boom will be for 'quality of life' properties in lifestyle locations around the world rather than a badly made box that is 'convenient for the City'.

[geometric]

I doubt it. You have transparency in other markets, it doesn't stop bubbles - witness dotcom boom. The bubbles may build up in a different way though.

<{POST_SNAPBACK}>

Very many people did avoid the dot com boom because of transparency. Although I have been daft enough to miss out on the housing boom I have been an equity investor for years and saw through the dot com thing with ease. I definitely am not any kind of expert but all of my contacts in equity investment were calling the dot com crash 18months in advance, it is the media that puts out the story that something suprising happened, but it just was not like that. I agree that the nethouseprices may be the most significant new factor in UK house prices.

[Pent Vaer]

Nope. You'll still have swings of sentiment (employment levels, interest rates, spring bounces (!)) so there'll still be reason to pay over the odds.

We know the basic value of a house, but people have still been prepared to pay over the odds...

<{POST_SNAPBACK}>

I guess what I'm trying to point out is the unique feature that nethouseprices offer that may not

(ok, my experience is limited) be available in any other market: *you can see exactly what the guy whos selling you the thing paid and when*. That automatically generates reactions like "I'd be a gullible fool to pay so much more than he did" as evidenced by the several anectodal stories we've seen. That can override all sorts of other considerations.

Of course there are other influences leading to booms, but I think this is a serious limiter. We'll see. Or not, if any or all of oil peak, gulf stream stopping, climate collapse or total job outsourcing from the UK occur in the next 10 years. Boy, there's all sorts of depressing stuff

linked from this board

Pent

[the_duke_of_hazzard]

Very many people did avoid the dot com boom because of transparency. Although I have been daft enough to miss out on the housing boom I have been an equity investor for years and saw through the dot com thing with ease. I definitely am not any kind of expert but all of my contacts in equity investment were calling the dot com crash 18months in advance, it is the media that puts out the story that something suprising happened, but it just was not like that. I agree that the nethouseprices may be the most significant new factor in UK house prices.

<{POST_SNAPBACK}>

Which proves my point, I think. The information was there, and there was still a bubble. I saw through the bubble as a naive 22 year old temp secretary who'd spent two days working for boo.com. I remember thinking: "Where's the money coming in from to pay for all this, and what exactly is being produced?"

People still piled in like muppets. Why? Fear of missing out; sentiment.

We've always had surveyors' valuations - why did they not stop a bubble?

[the_duke_of_hazzard]

I guess what I'm trying to point out is the unique feature that nethouseprices offer that may not

(ok, my experience is limited) be available in any other market: *you can see exactly what the guy whos selling you the thing paid and when*. That automatically generates reactions like "I'd be a gullible fool to pay so much more than he did" as evidenced by the several anectodal stories we've seen. That can override all sorts of other considerations.

Of course there are other influences leading to booms, but I think this is a serious limiter. We'll see. Or not, if any or all of oil peak, gulf stream stopping, climate collapse or total job outsourcing from the UK occur in the next 10 years. Boy, there's all sorts of depressing stuff

linked from this board

Pent

<{POST_SNAPBACK}>

A share is the "same thing". What changes is perception of value. External, genuine factors can play a part in a share price's change (change in CEO, surprise leap in profits, etc), but factors (employment levels, etc) can play a part in the perception of an increase a house's price even though the "same thing" is being bought. It might show a slightly less manic behaviour though.