Tuesday, November 13, 2007

“All poor news on the ‘eastern’ front. Poor enquiries, poor stocks, poor prospects.”

Housing market faces big slowdown

"Even in London, surveyors have lost their gung-ho attitude after the global credit squeeze" "now the first signs are emerging that home owners are rushing to try to sell before the market tumbles. New stock on estate agents books leapt 8.8 per cent in October at the same time as newly agreed sales were lower that at any time since April 1999"... two thoughts: (1) you will see that RICS is going to discontinue this survey soon, and (2) ah ahahh ahahha hahhah ahhaah hahahha

Posted by confused76 @ 12:12 PM (1279 views)
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16 thoughts on ““All poor news on the ‘eastern’ front. Poor enquiries, poor stocks, poor prospects.”

  • Bobusedtobeabuilder says:

    shaudenfreuder …..

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  • Bobusedtobeabuilder says:

    shaudenfreuder

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  • “the jump in the stock of properties on estate agents’ books would represent a new negative turn in the prospects for house prices if it persisted”.

    Looking at the articles over the last few weeks I think we’ve finally reached a tipping point. At the moment we’re at the stage where some owners (probably investors) are putting their houses on the market because they’ve finally woken up to the warning signs.
    But at the moment they’re still not prepared to lower the prices, after all they are greedy sods living in cloud cuckoo land, hence the “people don’t need to sell” comments flying around.
    However, we then end up with a sort of game of chicken; do you hold on and hope things recover or do decide the risk is too great and lower your price a bit to try and shift it. As things are unlikely to recover now, hopefully the latter strategy will prevail eventually leading to an exponential decay in asking prices as panic sets in.

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  • should that not read “Schadenfreude”

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  • Wrong!

    Shadenfreunder is a person who laughs at somebody else misfortunes

    I am laughing at my luck: I will be able to by a place for me and my family, FINALLY!

    Ahh ahhahhh ahhahhhahh ahhahhahha

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  • Should have bought a place years ago, even if they drop 15% – 20% you’ll still be kicking yourself that you didn’t buy years ago!

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  • aha aha aha C76 – but where oh where are you gonna get in? -10% -20% -30%? And then what happens if you miss on the A wave and thing shisten I have missed out oonly to be a panic buyer on the upside – thinking oh im looking for (say) 40% its gone down to 35% but i’ve missed the 35% and now its only -25% (sorry this is the trader in me talking I fully accept that in all probablity due to liquidity they aint gonna all liquidate at once and you will have your opportunity). But having said that I am intrigued – are we going for the Japan style 90% (89% Fib number) or are we a little less bullish about being a bear after all? I believe there will be a largish A wave, a retracement (bear trap) and then a real plunge. This whole scenario isnt gonna be 5 mins either! Whats yr view? BTW posted on Gold down to $800 buying opp?

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  • techieman
    all nice what you say, but truth is: I do not care

    I am not a property speculator, so I do not care if house prices move up down or sidewise

    I want to buy a place for 3.5x my salary, which now can afford me just a one bedroom, too small – we have two children

    -10%, -20%? A wave? I do not care…

    from 6.5x to 3.5x salary is what I care about

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  • as per your other question. IMHO, this is going to be a replay of the early 90s.
    nominal prices will go down 10-15% and bottom out in 2010-2011
    real prices will go down 40% (taking the house price / salary ratio down to the historical average of 3.5x) by 2012-13
    Good time to buy is after 2011
    There will be opportunities for real bargains at auctions.

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  • I still see this downturn turning into a full-on crash as opposed to a slump – an accelerating fall followed by a sharp rebound – so I expect a brief opportunity to buy at outrageously low prices (but don’t expect to get a mortgage at that point, as the lenders will be effectively bankrupt by then, with no funds to lend)

    I am personally ready to make cash buys when the price hits a low of around -75%

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  • May have dropped 10-15% nationally in the early 90s, but my experience of selling and then buying in london (sw19) in 1989 was as follows.

    Selling
    2 bed terrace, on market for 105k at start of 1989. dropped to 84k by early autumn 1989 to get a sale. -20%

    Buying
    3 bed semi, had been on the market for 165k at start of 1989. bought for 123k, moved in Nov 1989. -25%

    Seem to recall the biggest gains became the biggest falls, and pretty quickly.

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  • interesting ….. but c76 and uncle Tom. The answer is of course who knows how far it will go (or actually when it will start). if this is the end then i would expect a pretty dramatic crash because the 1989 – 93ish wasnt that bad and was infact just a correction. We now have to have an overshoot to the downside …so i tend to go along with Uncle Tom. i.e. this is the end of a long wave of prosperity (if not now then it will be even worse) the long wave includes the 89-93 correction so we are yet to have this bull run “properly” corrected. However one further question – are we assuming that salaries will increase to get to your 3.5x – if this is “the end” then surely salaries will deflate along with everything else?!?! This is my conclusion of your point C76 because you mention “real terms”.

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  • planning4acrash says:

    Fillipin eck Tom, you really have become a Bear!!

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  • crash bandicoot says:

    C76, you need to take the interest rates into account too. Back in the 90’s all of the repo’s came from mortgages of 3.5x and smaller. You can still go bust at that level if things get too bad.

    My take on the size of the crash is at least 50% in absolute terms. That is where house prices would be if they had risen in line with wages. OK that is from the ~1996 trough but we will be in the 2010 trough then. This is also somewhere near to making the average house 3.5x the average salary. This is where we are headed folks – get used to it.

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  • P4C

    I’ve been predicting this for years – but the problem is the timing – this bubble has dodged so many bullets!

    My only worry about wading in at -75% is that I might pay too much!

    Look at property prices historically, adjusting for wage inflation, and then factor in a major crisis, both with the economy and the credit markets.

    -75% doesn’t seem so extrreme!

    Remember – after the 1929 Wall St crash, the greatest money was lost by those people who called the bottom too soon…

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  • I posted something last night (ex password from home) but not come up yet. Yep i’m with Uncle Tom – BUT that might be 3.5x anyway – if its a killer K- winter and a slump deflationary environment then are wages / salaries really gonna keep increasing. Generally this site is full of people predicting (or saying we are in the begginings of) a HPC, but – if this is part of a general downwave do we all really think incomes wont be affected?!?!? Agree Uncle Tom – “picking bottoms gives you dirty fingers” [sorry if you are reading this eating your b/fast].

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