Monday, May 15, 2006

Who is fearing a crash?

Independent Online: Housing bubble fears grow as prices hit record high

Despite the title, the article doesn't say who is fearing a crash. It reports house prices are rising fast, currently at 5.9% with the potential to reach 8% this year. This is either a sign of the UK house price bubble's last gasp or that the general population has hit House-Price-Crash fatigue - too many warnings yet still no crash. Sales are up 40% since last March (Land Registry) and demand is up 25% (YourMove). Could the "House-Price-Crash fatigue" group be right?

Posted by talking rot @ 12:43 PM (627 views)
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1. denzil said...

It's an interesting point regarding HousePriceFatigue. I'm not even sure that house prices really cross the general publics mind that much really. People get on with their lives and the approach of those today is live today and think about tomorrow another day. Not considering tomorrow instantly means "crash" is irrelevent as is servicing long-term debt in fact that mentality makes crash much more likely because enough stupidity is around to keep the bubble inflated. In many ways tech stock bubble was so much the same. People invested in the "brave new World" of technology with scant regard for how most of those stocks would ever return some value. There were lots of clever investor's, I'll add myself to that list who could see it for what it was, a bubble whose foundations were underpinned with no foundation whatsoever.
Anyway to cut to the chase those that have been sitting on the fence my go ahead and buy because of crash fatigue and simply wishing to get on with their lives but regardless of them it comes down to the same old point. The fundamentals of the housing have gone so far its own arse it will be crawling back out its mouth soon and the cold light of day may shock it.
Things go in cycles, in my adult working life I have seen property being on relative terms expensive->cheap->expensive->cheap->expensive->..... Please fill in the dots.

Monday, May 15, 2006 01:15PM Report Comment

2. Inbreda said...

All the VI's have been talking the market up to avoid a crash. Presumably they hoped to hold out until the point when natural confidence returns to the market. Perhaps this is evidence that they have amazingly achieved their soft landing?

No way I'm buying though.

Monday, May 15, 2006 01:59PM Report Comment

3. uncle chris said...

I'm sorry .... despite all the talk of prices going up, I just don't see it in my area (welsh borders). The net advertised stock in local estate agents has continued to increase since the new year and there are more properties under 80,000 than there were last year. Many 'under offer' houses have still have boards outside (obviously stuck in a chain), and a quick look at the land registry shows fewer completions this year than last - and in one case a property sold for less than it did at the beginning of 2003. Whatever they say about 'advertised prices booming', 'selling prices' are dropping, with perhaps the exception of London and the SE. In saying that, there are few jobs in the welsh borders for the 300,000 polish army of workers, so less overseas competition for housing.

Monday, May 15, 2006 05:43PM Report Comment

4. denzil said...

>>'m sorry .... despite all the talk of prices going up, I just don't see it in my area (welsh borders).

Same in Somerset Chris. I have a preferred choice of area I would like to live in and just lately I'm being contacted by agents stating that vendors have dropped the price 5% would I be interested. I normally tell
the EA that if they drop by another 20% I'll take a look.

Monday, May 15, 2006 07:12PM Report Comment

5. Magnifico said...

Fact of the matter is, we all are still waiting with the nagging feeling that maybe life is passing us by.
Someone who bought a 2 bed house in Surbiton, Surrey a year ago would have attracted endless jibes on this site. Unfortunately now it looks as if he would have been right, as on selling it he would have made a small fortune ( Note I mean selling it as it was, without improvements).
Has anybody noticed how the House Prices Graph is looking more and more like the one endorsed by Krusty on the Housepricecrash video by Chris Parkers?
Hard to swallow but true.

Monday, May 15, 2006 07:21PM Report Comment

6. Geneer said...

VI's also seem to be talking the market down. Presumably to put off the inevitably interest rate rise for as long as possible.

Monday, May 15, 2006 07:22PM Report Comment

7. talking rot said...

Denzil, Chris

We're looking in North Yorkshire. While there is no sign of prices coming down, no houses are being sold. My better half claims most of the For Sale signs have taken root and puts the blame firmly upon "that London crowd" for refusing to sell. Frustrations and sentiments aside, I do wonder how the holiday / weekend will react should prices fall, interest rates go up, council tax increase. Will they sell like BTLers?

Monday, May 15, 2006 08:25PM Report Comment

8. bidin'matime said...

The notion that all the bears have got it wrong is just another classic and necessary element of a bubble. The pool of bears gets gradually smaller until absolutely no one else will buy. As a result, prices continue to rise (proving the bears to be wrong), until that point - then guess what happens.

If someone is prepared to gamble on the 'greater fool' principle, ie that someone else will be daft enough to pay them more before the bubble bursts, then so be it, but most people buy a house for the long-term, so are unlikely to get out now before it all goes t*ts up. If it was daft to buy in Surbiton a year ago, then it has to be down-right stupid to do so now.

Monday, May 15, 2006 10:23PM Report Comment

9. tyrellcorporation said...

I get drawn to the dark-side almost daily now as I'm renting a two bed flat with my missus and one year old boy - but then my brother in law shakes some economic sense into me and I'm fine gain...for a while.

Everything is pinned on a major Dollar slump at the moment eh!

Surely this would be a good time for the Iranian leader to turn the oil taps off too!

Tuesday, May 16, 2006 03:42AM Report Comment

10. European-bear said...

When the last bear leaves the room, the crash is nigh.....
What can't keep going on for ever doesn't......
And dead cat bounce comes to mind as well....
Also compare the land registry figures between final quater of 2005 and first quater of 2006 (NOT the year to year figures) and be surprised at how this does not point to the same booming market we are all hearing about this spring from other sources.....
And finally with talk of renewed price rises now happening, perhaps this is pesuading more BTLs to buy (as only through expected capital gains is there any chance of a profit) and adding a bit of upward pressure......
But the further up it goes, the deeper the trough will be... in the dots....very very expensive....very very cheap.....!!!!!

Tuesday, May 16, 2006 07:29AM Report Comment

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