Monday, April 23, 2007

Cheapest town’s homes top £100k

Cheapest town's homes top £100k

Every town in the UK has an average house price above £100,000 for the first time ever, according to Halifax. Prices still rising people!!! Crash? Nah.

Posted by david20040_0 @ 02:12 PM (730 views)
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8 thoughts on “Cheapest town’s homes top £100k

  • You can quote previous rises as evidence for there not being a crash in the future. Infact it makes it more likely.

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  • “Prices still rising people!!! Crash? Nah.”

    As someone recently said, the argument that the market won’t crash because it hasn’t happened yet is a nonsense. It is like saying I am not going to die because I haven’t died yet. On the contrary, the longer the boom goes on and the more inflated house prices get, the more likely a crash is. Just like the longer I live and the worse my health gets, the more likely I am to die. Quite how anyone can misconstrue “still holding on” as “never going to happen” is beyond me!

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  • Cheekie Charlie says:

    It seems the occupation needed for a first time buyer now needs to be of professional status to afford a home on a sink estate. You would have to pay me 100K to live in some of the large swaves of our cities which are occupied by our chav friends. Obviously people are paying 100k too much to live in these cheap towns.
    David its all a mirage either the property market will crash or the pound in your pocket will be worth nothing!

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  • The basic principle of assets. Buy it if you think some other sucker will buy it from you for more. To those recent first time buyers, you are those last suckers.

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  • David20040_0 says:

    So how come it hasn’t happened yet when 99% of towns are unaffordable for key workers, if it hasn’t happened yet when will it happen?

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  • David,

    At the risk of repeating myself:
    How come you haven’t died yet? If you haven’t died yet, when will you die? (….never?)

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  • Objectiveobserver says:

    david20040_0 the point is clear and yet david20040_0 you’re clearly missing it.

    Just because “it hasn’t happened yet…” doesn’t mean it’s not going to happen.

    The sun will one day turn into a Supernova, it happens to other stars when the conditions are right and it will happen to ours.

    Just because that hasn’t happened yet doesn’t mean it won’t happen.

    I’m sure if we could all predicit the precise moment a correction in prices will occur we’d all be multi-millionaires as we would have all correctly predicited the lottery numbers several times over.

    All the key factors point to a large correction probably most likely within the next 12-24 months, look at inflation, look at the US market, look at unemployment, look at interest rates, look at affordability, look at the level of personal debt in the country… look at the direction all these indicators are heading… all these are factors pointing to a massive correction – most likely within the next 12-24 months.

    But hey david, why not just bury your head in the sand and believe that house values only every go up… just like they did before all the other crashes, but this one is different isn’t it – because it hasn’t happened yet. *rolls eyes*

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  • David…the way it works is that people have paid more and more because they’ve been able to borrow more and more: more dual income households, lower interest rates, higher income multiples being allowed by the mortgage lenders. However, the longer a boom goes on, the more people think, “this will last forever, I don’t want to miss the boat, I will pay that extra £10k now rather than not be able to afford an extra £20k in 6 months, even though I can’t really afford even the £10k!” In other words, people over extend themselves – prices don’t just go as high as people can afford, they go HIGHER than people can afford. The market over-shoots. This over-shooting can go on a while, because whilst house prices are still going up, people feel the equity they are “gaining” is providing a cushion, so they are willing to take a lot of risk. But eventually there are too many people who have paid more than they should/could, so forced sales and repossessions go up, market sentiment changes, those who are just investors feel that prices have peaked and so they sell, and so prices start coming down instead – the same human factors that made the market over-shoot upwards then tend to make it overshoot down too (which is why this “soft-landing” never happens, even though it sounds so plausible when the “experts” talk about it).

    What I’m saying is that prices shooting up eventually cause prices to shoot down in and of themselves, but factor in something like increasing interest rates, increasing unemployment, or credit-tightening, and the end is brought about even more quickly.

    I know that you’ve become disillusioned because so many predicted a crash a few years ago and it didn’t happen, but if I predicted it was going to be sunny tomorrow, got your hopes up, and then it rained, would you then decide it was never going to be sunny again? It doesn’t work that way of course. The problem with last time is that the BoE whimped out and dropped interest rates, which allowed the market to puff itself up a bit more because everyone then thought the party was still swinging. If they do the same thing now, we still might not see a crash for a while, but it looks very unlikely that even they would try it a second time given current economic conditions – take heart.

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