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House Price Increase Or Crash


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So now would probably be a good time to buy then? Bottom of the market and all that?

whats the point on buyin if house prices keep fallin?

house prices gonna keep fallin for couple more years yet, your better of rentin then buyin then when house prices start to rise in a few years time thats the best place to buy, also gives you few years to save higher on a deposit, thats if you still have your job!!!

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Just a straw poll. Do you guys think the value of house prices will rise or fall over the next couple of months?

OK, this post sounds like a troll to me. As others have said, what sort of answer do you expect to get on this forum?However, just in case you're serious:

You must know most people here will say that prices are falling and going to keep on falling, and that all you need to ask is how far, how fast and how long.

So, I'm assuming that your doubts (if genuine) arrive from what you say in second post:

I am just after some opinions. I have seen a property I am interested in but some people are saying about certain folk talking down the housing market. What do you think, rise or fall.. say next 3 months?

Now "talking down the market" means saying things that will cause the market to fall. In this instance, it means an imaginary scenario like this:

House prices are set to go down by about 5% because of a contraction in credit. Then people in the media and places like this start saying, "House prices will have to fall by 10% or even 15%!" So potential buyers look at all this and couples say to each other, "There's no point in buying now when we can get 5% off last year's price. Those people in the newspapers say prices will fall 10%, so why don't we say that we won't buy unless we can get 10% off." After a while, and if enough people take the same attitude, then house prices will fall by 10%. And then "the people in media and on the internet" start talking about a 15% drop. The rest you can imagine.

The point being that, according to this theory, if "certain folk" had kept their mouths shut, house prices would not have fallen as far. End of imaginary scenario.

This, however, has nothing to do with your problem. I suspect what you mean is that you have heard that "certain folk" are exaggerating the fall in house prices. If you look at the last sentence you will see that what we are dealing with here is rumour and opinion, informed or otherwise.

Some things are fairly clear, however.

1) There are some people out there who simply do not believe that the house price crash is happening or will happen - or at any rate not to "people like us/you." To that point, all you can do is your own research, for the sort of house you want in the area where you want to live. There are always a few flat-earthers around. Most people are going to discover that the hpc (house price crash) is happening, though at different rates in different sectors of the market.

2) There are a few people who genuinely believe that what is going to happen to house prices has largely already happened. In other words that we have "reached the bottom," or somewhere near. They will tell you that now is a good time to buy. To these people, I would say that they too are, by general consensus, wrong - house prices have further to fall yet. BUT, if you happen to be in one or two special sectors of the market, AND if your life has reached the point where you fell the need to buy a house AND if you are prepared to do some hard bargaining, AND you are financially secure, then you MAY be in a position where buying makes sense for you. Only you know how much of this applies to you.

3) There are Estate Agents, and the occasional misled or deluded seller, who say that come spring the market is going to rise again, and if you don't buy now, you'll miss the boat. They quote government attempts to get credit moving again, and a few statistics. Every time I find myself anywhere near believing this I ask myself, "Is the UK economy as a whole going to get better between now and April, or even between now and next summer?" The answer is always a resounding NO. When unemployment is rising, sterling is falling and everyone is expecting hard times - that is NOT the time when house prices start to rise. Add in the horrible mess in the financial world, and a lot of people carrying a huge load of debt, and I think you have a clincher.

Any "spring bounce" is going to be at best what, in the City, is known as a "dead cat bounce" - a little hiccough in a long downward trend. And all of this does not include the obvious point that they are trying to manipulate a prospective buyer into parting with larger sums of money, and sooner, than is in the buyer's interest - they are working for the seller.

So, there seems, at the moment, to be a fairly general acceptance - across the commentaries in the press - that the price of house, on average, are likely to fall by 30% before they go up. This is NOT necessarily the consensus on this forum, where many people argue for a bigger fall. It is also a very rough figure, which will not apply to all places, all sorts of property and all individual vendors.

So now would probably be a good time to buy then? Bottom of the market and all that?

It also means that since that figure has not been reached, across the board, then the bottom of the market has not yet arrived, and will probably not arrive before then last quarter of 2009 at the very earliest. There is a case for saying that there's another very steep, but short fall to come, and then prices will bottom out. I don't think that it will be that dramatic - a long slow decline is more likely IMO. But if house prices start dropping by 5% a month, then we may hit bottom faster, but you will know about it anyway!

If someone is trying to persuade you to buy now, then don't listen to their impressions of what the market will do - go and do your own research - even if that research simply consists in visiting websites other than this one (perhaps including some of the newspapers) and finding out what is being said more generally.

If there are persuasive (and foolish) estate agents out there telling gullible clients that they can start adding an extra £10K to the price "because prices always go up in the spring," then you can put your hands in your pocket and wait for them to discover that they won't get a sale that way. The only really likely buyers who will respond are those rich men from other parts of the world, who are impressed by the amount of sterling you can now buy with a dollar or a euro. And I don't think you are in the multi-million pound market, by the sound of it.

I have given this question a good deal of careful attention, in case either (1) you query is genuine and not just a windup, or (2) someone who is in need of a general summary ends up reading this thread. I hope it is of some use to someone.

db

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