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Well When Will The Crash Stop ?.....


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looks like the crash even in usa has not stopped...so if we are behind usa then we have a long way to go....

Yeah, i mean has alt-a even kicked in yet, or do they reckon all the billions in funny money has made the alt-a cloud disappear.

Also, re interest rates......surely it's a good thing that banks can't/won't lend at below 4.5% even if the BoE cuts rates aggresively. The last

thing we want is invitingly low interest rates on mortgage deals from the banksters. 5%+ 25-year mortgages with 75% LTV and minimum 1k arrangement fee should

be a suitable deterrent to stop the sheeple from even thinking about trying to reverse reinflate this thing. Alternatively the banks should just carry on asking for proof of income

and 90% LTV, as most of those who've inflated this thing through BTL can't even manage that most basic of prerequisites.

Just a shame really that the govt. decided to raise stamp duty threshold. We need as many upfront costs as possible to make homebuyers realise that they need money in the bank and little or nothing in the way of unsecured debt in order to think about buying a property......if they realise that 3k in stamp duty and legal costs is coming out of their pockets and WON'T be returned through hpi in the forseeable future then they might actually think prudently about owning a home....optimistic i know, but maybe the message will get through to the thick-skulled out there.

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Guest mattsta1964
is hpc is over...

well people what do you say..........?

I was listening to Money Box today and 2 pundits interviewed said that house prices have a way to go yet.

One of them said we can expect house prices to fall to 2002 levels and that prices will fall 50% from the August 2007 peak.

I've been thinking 50% all along. 2001 was when house prices decoupled from any rational economic fundamentals. Inflation adjusted, house prices are going back to 1998-1999 levels.

See you there!

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On the other hand, there are quite a lot of similarities between property bulls and Jehovah’s Witnesses.

One are a deluded minority group who believe in an unrealistically rosey future, with a minimal grasp of reason or logic who regularly force their outlandish views on homeowners who can clearly see they are talking rubbish…

…and the other lot are Jehovah’s Witnesses!

:lol::lol::lol:

Edited by bricor mortis
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I was listening to Money Box today and 2 pundits interviewed said that house prices have a way to go yet.

One of them said we can expect house prices to fall to 2002 levels and that prices will fall 50% from the August 2007 peak.

I've been thinking 50% all along. 2001 was when house prices decoupled from any rational economic fundamentals. Inflation adjusted, house prices are going back to 1998-1999 levels.

See you there!

i would say around 50% off 2007 prices will start to make some real differnce to the ftb and all others priced out...it could be up to 75% of 2007 prices in some areas...

around march 2009 i reckon big drops will start..for the forced sellers there will be no hope...people losing ther jobs will not be able to pay loans or for the btl landords ther rents wont come in.

the credit card crash is also coming in 2009....not much to cheer up the property bulls in 2009..... :lol:

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I was listening to Money Box today and 2 pundits interviewed said that house prices have a way to go yet.

One of them said we can expect house prices to fall to 2002 levels and that prices will fall 50% from the August 2007 peak.

I've been thinking 50% all along. 2001 was when house prices decoupled from any rational economic fundamentals. Inflation adjusted, house prices are going back to 1998-1999 levels.

See you there!

why not 1995-6 levels, inflation-adjusted?

I'd have thought, inflation adjusted, this will drop BELOW the last low-point, anybody argue against this?

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why not 1995-6 levels, inflation-adjusted?

I'd have thought, inflation adjusted, this will drop BELOW the last low-point, anybody argue against this?

people how low could prices go...ther is a bottom in property...i hope for all the btls...joking apart it will take some doing to get back to even 2001...could they drop lower ?

i would really be intersted how low HPC could take prices next year....lets see what people reckon...or could they double :lol:

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When will the fall stop and how far will they fall?

Well we are just entering recession. That will take an absolute minimum of 18 months to sort out. Lets say the average fall remains around 1.4% per month.

[(100-1.40)/100]^18 = .776 = 77.6% of current prices, ie a minimum of a 22.6% fall

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When will the fall stop and how far will they fall?

Well we are just entering recession. That will take an absolute minimum of 18 months to sort out. Lets say the average fall remains around 1.4% per month.

[(100-1.40)/100]^18 = .776 = 77.6% of current prices, ie a minimum of a 22.6% fall

I love the sight of square brackets in the morning!!

I agree with your logic. The problem is that guide prices are still a long way from fair market value and that houses on the market for 6 to 12 months generally haven't reflected the drops in the market. This is why volumes have collpased much faster than prices.

Sellers still aren't facing up to reality. Your drop of 22.6% in fair value will have to result in a 35% or larger drop in guide prices for guide prices to reach fair value. This ties in neatly with the view of many here that the "correct" offer level for many houses is a discount to the guide price of about 40%.

I have had to tell a few estate agents that their guide prices are such that it is a waste of my time to even look at the houses that they are proposing. I don't think that they like it when buyers use their own terminology against them .....

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When will the fall stop and how far will they fall?

Well we are just entering recession. That will take an absolute minimum of 18 months to sort out. Lets say the average fall remains around 1.4% per month.

[(100-1.40)/100]^18 = .776 = 77.6% of current prices, ie a minimum of a 22.6% fall

yes the minimum will go out of the window next year as the recession kicks in. falls of 50% look like being the norm or more...

one of the strange things you hear these days...i really dont want to sell, but i put my house on the market, and i am not getting any offers...i am getting very worried...why if you dont need to sell are you trying to sell on a falling market ?

if i get a offer near asking price like 10% less i will accept...then the killer you dont know any who wants to buy my house do you ? :lol:

liar loan takers lied to get the loan now they want to lie to sell :lol:

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We were on the edge of a total financial meltdown 3 weeks ago and now some are so stupid as to think we are out of danger and to buy property before it's too late.

Realy :lol:

The Pension robbing phase is just about to start and don't think the BOE will be throwing money in to keep the public safe in their old age.

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We were on the edge of a total financial meltdown 3 weeks ago and now some are so stupid as to think we are out of danger and to buy property before it's too late.

Realy :lol:

The Pension robbing phase is just about to start and don't think the BOE will be throwing money in to keep the public safe in their old age.

i agree with you....pls dont forget the credit card crash coming next year...... extra bns for god to the bankers brown, too pump more money into the banks...

over no where near, unless your on drugs..even then when the effects wear off, reality of HPC will hit you. if your a forced seller full in the pocket... :lol:

all liar loan takers no way out check mate next year :lol:

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Well When Will The Crash Stop ?....., some stupid people are trying to say hpc is over.

Look back at historic house price corrections and previous recessions for your answers.

I am, for one, fearful of our long term future.

I believe you are underestimating this downturn big time.

What can we learn from previous events?

The higher or larger the deviation from the mean a particular bubble has been the bigger the bust

The bigger in the sense of total magnitude ie total value of bust and number of people involved the longer it lasts.

The longer the bubble has gone on for the longer it takes to bust.

This particular global credit bubble and accompanying asset bubble is by far the greatest in all three of the above critera.

Are there any other previous that could be used as a yardstick?

The Japanese property crash of the late 1980s early 1990s

How high from the norm had prices risen? reported to be as much as 7x salary, equatable to our current situation

Total value and magnitude. I would guess around 20% magnitude and involved around 15% of the current number.

How long had it gone on for? Around 8 years I believe.

50 year mortgages, family mortgages, and even interest only were introduced, prices were set at the maximum people could lend. There was a near total concensus that house prices would always go up, and growth would continue on at break neck speed.

What happened

Massive bust and subsequent asset depreciation, which has been going on for around 18 years. There were tentative signs over the last 2 years they were finally pulling out of it but current global situation has overridden this recovery.

There were many other but none come close in terms of number of people involved, value, deviation, or length of formation.

The Wall street crash was mainly involving US citizens and only those that were involved with the stock market.

There has never been a bubble so big, involving so many people, whose value is such a large proportion of the worlds GDP.

How deep will the recession go?

Deeper than ever before. I do not really know what this will mean and it frightens me.

How long will it last?

Longer than ever before. Obviously more than 20 years but will there be posters on this forum young enough to see the end? That will be interesting

How many will it affect?

It will affect nearly every single person on the planet. This is truely a global event. Maybe there are some lost tribes in the Amazon basin or possibly camped just outside Maidenhead who have never come into contact with "civilisation" who may not be affected in the least.

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Well When Will The Crash Stop ?....., some stupid people are trying to say hpc is over.

Look back at historic house price corrections and previous recessions for your answers.

I am, for one, fearful of our long term future.

I believe you are underestimating this downturn big time.

What can we learn from previous events?

The higher or larger the deviation from the mean a particular bubble has been the bigger the bust

The bigger in the sense of total magnitude ie total value of bust and number of people involved the longer it lasts.

The longer the bubble has gone on for the longer it takes to bust.

This particular global credit bubble and accompanying asset bubble is by far the greatest in all three of the above critera.

Are there any other previous that could be used as a yardstick?

The Japanese property crash of the late 1980s early 1990s

How high from the norm had prices risen? reported to be as much as 7x salary, equatable to our current situation

Total value and magnitude. I would guess around 20% magnitude and involved around 15% of the current number.

How long had it gone on for? Around 8 years I believe.

50 year mortgages, family mortgages, and even interest only were introduced, prices were set at the maximum people could lend. There was a near total concensus that house prices would always go up, and growth would continue on at break neck speed.

What happened

Massive bust and subsequent asset depreciation, which has been going on for around 18 years. There were tentative signs over the last 2 years they were finally pulling out of it but current global situation has overridden this recovery.

There were many other but none come close in terms of number of people involved, value, deviation, or length of formation.

The Wall street crash was mainly involving US citizens and only those that were involved with the stock market.

There has never been a bubble so big, involving so many people, whose value is such a large proportion of the worlds GDP.

How deep will the recession go?

Deeper than ever before. I do not really know what this will mean and it frightens me.

How long will it last?

Longer than ever before. Obviously more than 20 years but will there be posters on this forum young enough to see the end? That will be interesting

How many will it affect?

It will affect nearly every single person on the planet. This is truely a global event. Maybe there are some lost tribes in the Amazon basin or possibly camped just outside Maidenhead who have never come into contact with "civilisation" who may not be affected in the least.

well thought out i agree with what you say....i have been saying these things to my freinds for last 4 or 5 years they thought i had lost it...some off them still think its going to be over soon....

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Please refer to the 2006 OECD paper on house price cycles

RECENT HOUSE PRICE DEVELOPMENTS: THE ROLE OF FUNDAMENTALS

http://www.olis.oecd.org/olis/2006doc.nsf/.../ECO-WKP(2006)3

Table 1. Summary statistics on real house price cycles

1970 Q1 -2005 Q1

Number/Average duration(quarters)/Average price change(per cent)/Maximum duration(quarters)/Maximum price change(per cent)/Number of turns> 15%

Upturns

United Kingdom 3 18.3 64.2 30 99.6 3

Downturns

United Kingdom 3 16.3 -25.0 25 -33.7 2

Which basically says that we in the UK have had 3 major periods of house prices inflation and 3 major downturns... the average downturn was -25% and the most severe -33.7%.

The average period for a downturn was 16.3 quarters and the maximum was 25 quarters.

So... if the Peak for the market was in July 2007 we should expect at least another 11-20 quarters (ie.3-5 yrs) before the market reaches its bottom. Those predicting no change in downturn until 2011-2012 are statically most likely to be correct.

However the chart above also has the highest upswing as being 99.6% increase in prices. Obviously many parts of the UK experienced rises far great than this - so similarly we can predict the fall may be larger than seen previously - therefore those predicting drops of AT LEAST 35-40% are statically most likely to be correct.

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How long will it last?

Longer than ever before. Obviously more than 20 years but will there be posters on this forum young enough to see the end? That will be interesting

How many will it affect?

It will affect nearly every single person on the planet.

Completely agree. I don't say it to anyone I know anymore ("too negative" :lol: ) but I believe this, ahem, downturn will last the rest of our lives. The problems are ecologic or bionomic. Nothing rescues it. They can't be solved with printed pieces of paper of any kind. Already the quest for new technologies is being hindered by lack of investment capital. This is one hidden problem of this collapse. There are many more.

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However there is a danger the government will attempt to hyperinflate their way out of this crisis in a way they did not do in previous downturns of lesser magnitude.

For nearly two decades the West has looked askance at Japanese woes and their attempts to solve their economic problems. However history may show that their handling of their crisis was prudent in comparison with the policies of desperation we will likely embark upon.

If only we had the humility in this country to admit much of the "wealth" is an illusion and that we must accept a lower standard of living until we can figure out a better basis for our economy. Pride and arrogance will make the situation worse are we will only submit to the inevitable after exhausting every other available option.

Please refer to the 2006 OECD paper on house price cycles

RECENT HOUSE PRICE DEVELOPMENTS: THE ROLE OF FUNDAMENTALS

http://www.olis.oecd.org/olis/2006doc.nsf/.../ECO-WKP(2006)3

Which basically says that we in the UK have had 3 major periods of house prices inflation and 3 major downturns... the average downturn was -25% and the most severe -33.7%.

The average period for a downturn was 16.3 quarters and the maximum was 25 quarters.

So... if the Peak for the market was in July 2007 we should expect at least another 11-20 quarters (ie.3-5 yrs) before the market reaches its bottom. Those predicting no change in downturn until 2011-2012 are statically most likely to be correct.

However the chart above also has the highest upswing as being 99.6% increase in prices. Obviously many parts of the UK experienced rises far great than this - so similarly we can predict the fall may be larger than seen previously - therefore those predicting drops of AT LEAST 35-40% are statically most likely to be correct.

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We've had a house SALES crash, a MORTGAGE LENDING crash, a HOUSEBUILING crash and to some extent a collapse in actual sale prices of properties.

However I haven't noticed much change in asking prices. All the 'crash' is contained in the difference between asking price and actual sale price at the moment. In July 2007, a lot of properties were selling as soon as they went on the market, at the asking price. Now most are taking months to sell, if they sell at all, and discounted from the asking price. So it could go either way - asking prices start coming down, following the trend in actual selling prices, or those selling prices start climbing up again to match the asking prices. The asking prices are still a sort of bench-mark, even if nobody's buying!

Edited by blankster
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However there is a danger the government will attempt to hyperinflate their way out of this crisis in a way they did not do in previous downturns of lesser magnitude.

I agree that high to hyper inflation is a very likely outcome here.

However if that is to be the case then you shoud invest in assets other than housing to begin with because other assets do not rely on borrowing to be maintained. Yes house prices could go up significantly if there is massive inflation, but in order to do so either wages or lending needs to increase significantly to allow for HPI to recommence.

Consequently its far more likely that in an inflationary scenario Commodities and Stocks might rocket whilst housing remains comparatively falling or stagnant until one of the two requirements above is met.

My personal belif is that we will are currently in a stagflation but that housing will remain falling for at least 18-24 months because with the rising level of redundancies wages will not increase and with the continuing banking and credit contractions lending will not increase. Meanwhile i don't expect our energy or imported goods to do anything other than increase in price from this point.

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I agree that high to hyper inflation is a very likely outcome here.

However if that is to be the case then you shoud invest in assets other than housing to begin with because other assets do not rely on borrowing to be maintained. Yes house prices could go up significantly if there is massive inflation, but in order to do so either wages or lending needs to increase significantly to allow for HPI to recommence.

Consequently its far more likely that in an inflationary scenario Commodities and Stocks might rocket whilst housing remains comparatively falling or stagnant until one of the two requirements above is met.

My personal belif is that we will are currently in a stagflation but that housing will remain falling for at least 18-24 months because with the rising level of redundancies wages will not increase and with the continuing banking and credit contractions lending will not increase. Meanwhile i don't expect our energy or imported goods to do anything other than increase in price from this point.

This is my first post after loitering on this site for about 18 months, I have read with interest the posts of other members, especially those that contain useful links to documents produced by institutions.

I would be interested to hear what assets pyewackitt believes will benefit from inflation?

My own strategy over the last 12 months has been to save as much cash as possible.

This is as I believe that, despite the current attempts to control the economy and lowering the BOE Base Rate, in the mid to long term we WILL see higher inflation and perhaps even hyper inflation. I believe cash investments will certainly perform far better than property as interest rates will increase dramatically. Despite getting just 6% in a savings account at present, this is better than losing 16% in property value.

On a personal note, I am disheartened by the glee and reveling in others down fall (due to collapsing property prices) by numerous contributors to this forum, who focus on their hopes that a future house purchase will cost them less in cash.

The phrase BE CAREFUL WHAT YOU WISH FOR comes to mind

Money generated in the housing market forms an integral part of the economy with millions of pounds of business being reliant on the change of ownership of UK housing,

Many businesses are now struggling and those very people wishing for the worst may find themselves being the one made redundant, so that cheap property is irrelevant!

Besides the Estate Agents, Solicitors, Valuers, Removal, building and decorating business directly involved in the property market we should not forget that when people move home they spend money on new goods such as carpeting, furnishings, new electrical goods, gardening etc etc

Also, like it or not, people profit from property, and the people making money from property also spend that money, that money moves around & keeps the economy moving, most importantly it keeps population in employment.

It is very sad and worrying to hear that factories in the worlds fastest growing economy are closing due to lack of orders from the West as we tighten out belts, we will also lose out in return as China's demand from the West for materials plus their desire for high quality UK goods and their investments over here will dwindle, commodities such as metal are falling already.

We can certainly expect fuel prices to increase further as the Oil cartel will ensure their income remains at their desired level by controlling supply, plus the Russian monopoly on our gas supplies will allow them to balance out economic instabilty felt by them as the Credit Crunch moves East

Edited by chkee
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I agree that high to hyper inflation is a very likely outcome here.

However if that is to be the case then you shoud invest in assets other than housing to begin with because other assets do not rely on borrowing to be maintained. Yes house prices could go up significantly if there is massive inflation, but in order to do so either wages or lending needs to increase significantly to allow for HPI to recommence.

Consequently its far more likely that in an inflationary scenario Commodities and Stocks might rocket whilst housing remains comparatively falling or stagnant until one of the two requirements above is met.

My personal belif is that we will are currently in a stagflation but that housing will remain falling for at least 18-24 months because with the rising level of redundancies wages will not increase and with the continuing banking and credit contractions lending will not increase. Meanwhile i don't expect our energy or imported goods to do anything other than increase in price from this point.

yes hyper inflation could happen,,but i doubt it....i just reckon on inflation out striping wages...out of work 3 m+ a lot of poles going home rents falling...

a lot of young people moving back with ther parents....V.A.T going up....then we will start to get deflation after the middle of next year..

uk wages coming down too european levels....interst rates in uk over 2% more then eu countries..

credit card bust is coming next year...

property coming down very fast after march...a lot of rich overseas property owners selling up...as the value of the pound keeps falling...

btls in total meltdown ........

yes a very happy new year for the btls....

eas closing down in mases...

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