Sunday, Oct 15, 2006

House price? Always goes up... Does it?

ADVFN: Forecast sees housing prices falling

WASHINGTON Housing prices slumping after a five-year boom, are
projected to decline in more than 100 of the nation's metropolitan areas.

Posted by anytime @ 12:44 PM (552 views)
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5 Comments

1. bidin'matime said...

"Housing's downturn has turned even more dramatic with the rapid flight of the flipper from the market," the report said. "These investors have gone from sending home sales and prices shooting higher to driving sales and prices lower."

Exactly! As I keep saying, once the frenzied buying stops, that alone will result in price falls. Take the BTL's and must get on/up the ladder at all costs before it all gets too expensive brigade out of the market and what are you left with? Well, for one thing, a lot of empty apartments and small houses (those under construction at the time we reach that point) that, once completed, will represent a huge over-supply for the remaining buyers in the market. Basic economics of supply and demand then takes over and down come the prices. Its so simple, its sickening that the supposed experts dont, or appear not to, or maybe just refuse to, understand it.

Sunday, October 15, 2006 06:58PM Report Comment
 

2. indiablue19 said...

Yes, "supply and demand" causing a price fall or escalation doesn't necessarily equate with whether there is an overflow of stock, or not. It often merely means that people no longer want what you're selling. You may have the only gold-plated Maserati around and you may consider that it's worth the fortune you paid to own it, but if you need to sell and nobody wants to pay the price, it's worth nothing. Or to put it another more practical way, well constructed houses in places like Port St. Lucie, Florida were known as "scarce" and the prices going up and up and up. Even after all the hurricane activity a few years back, sales were brisk. A sale sign didn't last a day or more on the streets. But suddenly a new mood hit in Spring 2006, sentiment changed, and within a few weeks demand stopped, prices fell immediately, but beyond the price fall aspect, within a short time you couldn't sell one AT ALL -- not for love nor money. Signs sprouting everywhere and no movement in the market at all. No change in the available supply nor the product offered, but buyers had left the market. It's happening in various places all over the US now. People have lost their taste for extraordinary debt, tired of thinking about "trading up" or getting out of their rented condo, or "flipping" which was all the rage in Florida with a whole industry of "financial advisors" explaining how to do it and make millions. All dead discussion now, and the feeding frenzy is over.

Sunday, October 15, 2006 10:45PM Report Comment
 

3. inbreda said...

Only a small fall may encourage people to trade down in order to capitalise on their housing profits.

It's a snowball effect, and it WILL happen to the UK property market.

As soon as the VI spin is stopped.

Monday, October 16, 2006 10:25AM Report Comment
 

4. the bald man said...

Inbreda. Rightmove today are still spining the market!

Monday, October 16, 2006 10:49AM Report Comment
 

5. Rocket Robbie said...

I live in Dover where prices are high but a friend from work and his girlfriend have just brought together a three bed end on terrace in a respectable area. Neither my friend or his partner earn vast amounts of money yet they can easily afford their repayments and still have enought left to enjoy a social life. Even if the IR rise next month and next spring they will still be fine. I think people on this site must wise up and realise their are still first time buyers out their. I keep hearing people say people are borrowing 6 times their wages and this cant continue and these FTB dont remember the crash of the early 90's. Maybe they are wise enough to realise that if prices do drop as long as they hold their nerve then prices will go up again. If IR rise sharply and FTB struggle all they have to do is put their mortgage repayments to 30 or 35 years.

Monday, October 16, 2006 05:39PM Report Comment
 

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