JohnnyB Posted June 24, 2008 Share Posted June 24, 2008 It does go some way to explain the astonishing retail sales stats from ONS for May 08.What I can't figure is why all of a sudden in May a lot of people simultaneously and independently decide that now is exactly the right time to have a splurge on the credit card. Is there an economist (or even a psychologist) on hand to explain this kind of herd behaviour? It can't have been media driven or opinion driven, surely? Just, everyone goes shopping. Maybe they're already facing repo on the house, or even bankruptcy, and thought "what the hell, it doesn't really matter if I add a few thousand on top." Quote Link to comment Share on other sites More sharing options...
Converted Lurker Posted June 24, 2008 Share Posted June 24, 2008 I must admit that the pace of this crash is unbelieveable! I was quite pessimistic at the start of the crash in Autumn 2007 and I thought we may be in for a "Japan" with a long protracted crash. I thought uber bears like RB were nuts when they were predicting 20 per cent falls this year but now it looks as if RB was right! I think I'll put an offer on a house in Spring 2010 at a 40 per cent discount (compared with August 2007 prices)!!! I am so happy I discovered this site and it would seem that in two years time I'll be able to afford a home at a reasonable price at last! Yey Quote Link to comment Share on other sites More sharing options...
redwing Posted June 24, 2008 Share Posted June 24, 2008 I was really impressed by the change of tone in Miles Shipside's Rightmove report from yesterday: Miles Shipside, commercial director of Rightmove comments: “In spite of the lowest housingtransactions for 30 years, new sellers had been coming to the market asking record prices. It was a mad state of affairs that defied the laws of economics[it was a bubble. Note the use of the past tense]. Thankfully, new sellers are now taking some proactive steps to price more realistically from the outset to attract increasingly hard-pressed buyers.”[message to new sellers: you need to drop your price from the start] “It is essential your property stands out over your competition, especially with a property to buyer ratio of 15 to 1*. Sales are still happening, and there is a pent-up demand for the right properties at the right price [drop your price!]. The homes that are in special locations, have strong character details or an immaculate finish are still popular if priced realistically [location, location & price]. Run-of-the-mill homes that are not much different to others on the market have to stand out as bargain buys, and badly presented homes have to be really cheap.[and I mean REALLY CHEAP]” The widening gap between some sellers’ asking price aspirations and what buyers are willing or able to pay is one of the factors behind the illiquid property market and low volumes of transactions. Getting serious about attracting buyers through more realistic pricing now appears to be more firmly on sellers agendas [drop your prices], after months of denial. Most sellers will still benefit from large equity gains. Further reductions in asking prices will be required for properties in over-supply [no, I really mean drop your prices], as buyer affordability is still deteriorating against the wider economic backdrop of the average cost of living outstripping wage rises and the upwards spiral of mortgage rates. The restrictions on mortgage availability give sellers an additional challenge, as the number of readily mortgageable buyers they can target has been severely restricted. Evidence of the challenge facing sellers is research from Rightmove showing the doubling of the ratio of properties for sale to successful buyers. My bold and my interpretation in [...]. Rightmove (and all the estate agents it represents and earns fees from) are desparate to get prices down. Today's BBA figures just go to show how desparate the situation is. I'm really looking forward to the property Vested Interests joining up with the HPC lobby in one great cry of: DROP YOUR HOUSE PRICE!!! Quote Link to comment Share on other sites More sharing options...
Normal Posted June 24, 2008 Share Posted June 24, 2008 It does go some way to explain the astonishing retail sales stats from ONS for May 08.What I can't figure is why all of a sudden in May a lot of people simultaneously and independently decide that now is exactly the right time to have a splurge on the credit card. Is there an economist (or even a psychologist) on hand to explain this kind of herd behaviour? It can't have been media driven or opinion driven, surely? Just, everyone goes shopping. Depression spending? Bills are up, mortgage is up, people feel down. How do they make themselves feel better? Do the same thing that they have got used to doing during the boom years. Spend! Quote Link to comment Share on other sites More sharing options...
quantinghome Posted June 24, 2008 Share Posted June 24, 2008 Those numbers are truely shocking.I would also be willing to bet a fair chunk of those mortgage approvals are so called BMV people buying up property - I certainly know it is going on round here (PE11) in a fairly big way. We are probably in the bull trap now, all the BMV people are pulling themselves in and IMHO it is going to be a bloodbath. I think we'll see the bull trap appear over the summer. The BoE approvals figures were flat around December/January, implying a similar levelling off in the rate of price drops 6 months later. However, approvals figures slumped after that, so it'll be carnage in the Autumn. I can scarcely believe these BBA figures. We'll see if the BoE data backs it up at the end of the month. Quote Link to comment Share on other sites More sharing options...
frozen_out Posted June 24, 2008 Share Posted June 24, 2008 I think we'll see the bull trap appear over the summer. The BoE approvals figures were flat around December/January, implying a similar levelling off in the rate of price drops 6 months later. However, approvals figures slumped after that, so it'll be carnage in the Autumn.I can scarcely believe these BBA figures. We'll see if the BoE data backs it up at the end of the month. Bull trap's been and gone. Look at the graph. Quote Link to comment Share on other sites More sharing options...
Fancypants Posted June 24, 2008 Share Posted June 24, 2008 and I mean genuinely,genuinely stunned. I guess this is the payback for the extra two years that were squeezed out of the bubble. Quote Link to comment Share on other sites More sharing options...
pete.hpc Posted June 24, 2008 Share Posted June 24, 2008 Bull trap's been and gone. Look at the graph. Everything since 2005 has been the Bull trap, IMO Quote Link to comment Share on other sites More sharing options...
Far Out Bear Posted June 24, 2008 Share Posted June 24, 2008 and I mean genuinely,genuinely stunned. i agree, it is epic. the worrying question is, what is the government going to do about this, once this stops being a numbers bizaare, and the effects are empirical? they are going to try to put a prop under this one way or another. if property is a bad bet right now, sterling is an even worse one. Quote Link to comment Share on other sites More sharing options...
Driver Posted June 24, 2008 Share Posted June 24, 2008 It makes things tricky because at some point you will want to avoid one yr fixed rate bonds and start moving into nine month then six month bonds. We are not quite there yet but each time i move money into a one year bond I do wonder if it will be the last one. Thankfully we do have the USA to give us heads up (if you subscribe to this whole eighteen months ahead of us theory). Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted June 24, 2008 Share Posted June 24, 2008 bump Quote Link to comment Share on other sites More sharing options...
Radge Posted June 24, 2008 Share Posted June 24, 2008 When do we think the crunch in unsecured lending will really kick in? I havn't seen this discussed much on here. Any ideas? There are still 0% balance transfers (actually 3%) on offer and folk are still shunting debt around. My Virgin CC is even offering balance txs to current accounts @ 3%! I'm almost tempted to say yes to £10K and invest it @ 7%. I have a feeling these offers will stop sometime later this year. When there's nowhere to shunt the debt to, then the ordure will really hit the rotary cooling device. Quote Link to comment Share on other sites More sharing options...
jm78 Posted June 24, 2008 Share Posted June 24, 2008 There are still 0% balance transfers (actually 3%) on offer and folk are still shunting debt around. My Virgin CC is even offering balance txs to current accounts @ 3%! I'm almost tempted to say yes to £10K and invest it @ 7%.I have a feeling these offers will stop sometime later this year. When there's nowhere to shunt the debt to, then the ordure will really hit the rotary cooling device. I think later this year too. Although my timing has been dreadful in the past. What is definite, though is that IMO we have not had a crunch in unsecured lending yet. Quote Link to comment Share on other sites More sharing options...
cells Posted June 24, 2008 Share Posted June 24, 2008 May 2008: 27968Last month: 38704 May 2007: 77443 so, was that 38,000 stupid people, or 38,000 getting a bargin? Quote Link to comment Share on other sites More sharing options...
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