Saturday, January 24, 2009

Haven’t heard from the Comedy Club in a while

Why You Have Missed the Boat If You Wait to Buy Property When the House Price Indices Are Going up

It's quite common to hear property buyers and investors say they're waiting until house prices fall further before they buy. Our view is for a 0-10% fall in prices over 2009. For the professional investor or savvy homebuyer doing deals with sellers, the best prices you'll get are when sentiment is at its worst when people believe the world is terrible and there is no solution. Right now we have quite possibly just passed the worst possible moment in the property market when it comes to achieving the best possible prices. We are seeing signs that the distressed property market is beginning to turn up. People in the know start to buy first before very obvious indicators say that the time is right. Act like a professional investor with a mind of your own, not just listening to the herd.

Posted by little professor @ 05:03 PM (2276 views)
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20 thoughts on “Haven’t heard from the Comedy Club in a while

  • little professor says:

    Comedy Club Flashback to this time last year:

    Despite recent market negativity, Chief Executive of Assetz, Stuart Law, highlights some of the key factors working against claims of a housing crisis in 2008:

    “There is a lot of speculation suggesting that a crisis in the property market is looming, and although much of this is based on unfounded claims and conjecture, the continued mutterings are running the risk of turning into a self-fulfilling prophecy. The danger is that people are now beginning to believe such spurious claims, offering a further knock to consumer and investor confidence.

    “While there is no denying that the rate of house price growth will continue to slow in 2008, this is the result of a widely anticipated period of stabilisation, and is not the beginning of a housing market crash, as is being touted within the industry.”

    Stuart Law is urging professional property investors to study the facts, not the fiction, about the outlook for the UK property market in 2008.

    We expect good opportunities to arise over the next few months, as vendors needing to move and developers looking to achieve sales quickly with buyer incentives, continues to provide excellent prices.there is a massive undersupply of property in the UK. The talk of oversupply has referred mainly to rented flats in city centres. However, it is now becoming clear that this was a relatively small oversupply and agents in many cities and towns are reporting strong rental demand surges and a rapid reduction in rental accommodation available. Even city centre flats are recovering and rental demand is so far boding well for strong rental growth in the future.

    Professional investors in any market act against the crowd. This is the opportunity to think like a professional investor and buy at a time of market pessimism.

    Stuart Law, Chief Executive of Assetz, offers his outlook for the UK property market in 2008:

    Average house price growth in 2008: 5%
    Interest rates will fall to 5% by December 2008
    Rents will rise 10% in 2008

    While we are currently experiencing a lot of negative sentiment in the property market, this is actually no reason to set the alarm bells ringing. If people look at the fundamentals it is actually very hard to find out what all the fuss is about.

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  • If people look at the FUNDAMENTALS it is actually very hard to find out what all the fuss is about.

    crunchy- ROTFLaughing! It’s a bit like missing the Titanic. I will wait for the next one. Thank you.

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  • I think I once supposed that you might be Stuart Law lurking here in disguise, little professor.

    I can’t see Mr Law being that clever quite frankly.

    I remember he spoke at some property exhibition in late 2007 and drew quite a few raised eyebrows from the assembled media when he started spouting this rubbish to them with a straight face. I think at that point, no-one was taking him seriously any more.

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  • The only way house prices are only going to fall 0 – 10% in 2009 or even start rising in the next 3 years is if the BoE prints so much new money and floods the UK with it that we get hyperinflation. Would Brown and the BoE really risk hyperinflation just to prop up property prices at the expense of the currency and everyones savings? Well…………..

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  • “The distressed sellers market as a whole had its worst pressure from around last September until around January this year.”

    What does he mean by “around January”? We’re still in January so we must still be in the period of “worst pressure”. I can’t see it getting any better now that the redundancies have started!

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  • “We are seeing those professional property investors into the market, usually with very large cheque books not hundred percent borrowing. What better indicator that these people are savvy and confident that they are making the right decision.”

    OK. There may be some well heeled landlords looking to buy heavily discounted properties for investment – and I mean very heavily discounted. What relevance does this have for typical FTBers? None at all.

    Law is a permabull and would presumably be happy to see the market turn in favour of BTLers again. Most likely, he will fleece some unwary wannabe landlords. Let’s ignore him and his big cheesy grin.

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  • Another recent masterpiece from Mr Law:

    http://news.assetz.co.uk/articles/4593.html
    “The right time to buy”, 21st January 2009:

    “When is the right time to buy a property? For the last few years before the credit crunch, it seemed like anytime would be good. Indeed, the literature produced by some firms – a number of whom are no longer trading – suggested that it was impossible to go wrong with property, as supply-side shortages meant that prices would always go up.”

    I could find no hint of irony or tongue in cheek humour in the article. It appears that he really didn’t consider that the above perfectly describes himself.

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  • How is this guy still in business? Surely can’t be long now before he goes bust.

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  • Where can I see this guy perform live?

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  • The British Brickie says:

    Deal with the facts,so here are the facts ,the type of house i want to buy in Hampshire is now only £165k,in 18 months i saved 50-60 grand FACT!!!!!

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  • Good post LP as the comedy club has been lacking direction of late, but as we know Stuatz never let’s the team down. IMO he’s as deluded as ever – the residential and commercial property markets are very likely to decline quite dramatically in 2009. In the previous “crash” or “correction” prices began to decline as unemployment began to kick in whilst this time around the prices were in reverse before unemployment has really taken hold. The indications are that this recession (which is now official) will likely be deeper and longer than that of the 90’s couple this with a major banking crisis and I just cant see how prices are going to rise any time soon. I am warming a little however to techieman’s theory of a Spring dead cat bounce.

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  • Hmm…… This is an interesting point though. If you follow the herd you will do okay especially if you keep an eye out on the leaders and when they start to buy, you get in quick. If your at the back of the herd and buy eventually, it will be too late as home owners will know the buyers are back and will sit tight for the right price.
    Estate agents around the country have low stock levels as many home owners have given up trying to sell or have given their unsold homes to the letting agents. House builders have slowed or completely stopped building new homes so the number of properties available is at it’s lowest levels in years.
    Interest rates are quite low at the moment for people with a 10 -20% deposit and if the lending criteria is relaxed to let more buyers onto the housing ladder, coupled with some positive news on the economy, buyers could start to jump onto the housing ladder again. When this starts to happen, and it only takes the media to report “house sales are up this month” once, the increase demand and shortage of stock, could bounce property prices up quite quickly.
    Confidence is the biggest problem right now. People fear losing their jobs so they don’t spend much of whatever money they have, which means the companies and shops out their don’t make much money and have to shed jobs. Catch 22. The problem gets worse.
    Something needs to happen to stop the spiral of decline.
    With less and less properties coming onto the market and buyers poised to buy waiting for confirmation that we have hit rock bottom, it won’t take much to start spinning back up the other way.
    I work in the rental market next to an estate agent. Last week I discovered that buyers are bidding against each other on the repos, with 2 or 3 buyers over bidding each other! There are still buyers out there looking for bargains!

    The rental market is becoming tough at the moment by the way, with loads of rental properties and not enough tenants! 😮

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  • I didn’t hear the comedian advising people to sell when the “herd” mentality was buy buy buy.

    There’s a glass cage with his name on it in the Museum of Financial Crises.

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  • The bloke’s dreaming. House Prices have got the same coming this year as last,if not more. Probably some good deals for professionals around but that’s about all.

    Jack c…..Missed your post earlier re pension funds. Thanks for the info……. Got out of the cash fund and into far east at low, then back into cash 02/01/09….. So good result recovering earlier years losses plus.So no loss 2008….Will continue in this manner and hopefully recover all losses since day 1 (1989).

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  • Jack c – I woul be more than happy to be wrong about this DCB in spring. I just wanted to make that clear. i hae no pride in THAT position!). But IF that were right then i would be interested to see the spin “i told you so” [email protected] come out of the mouths of the bulls.

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  • “Probably some good deals for professionals but thats about it”

    Yes, the rest of us are too thick to take advantage of market conditions. Best leave it to ‘the professionals’.

    Prices will fall by at least 10% this year but long-term interest rates will also rise. With the gov printing money, you can’t consider anything other than a fixed rate. Right now you can get a rate of 4.89% fixed for 10 years. If rates are higher at the end of the year it will be more expensive to buy a house even if prices are lower. You have to take interest rates and prices into account when determing the optimum time to buy.

    Also, although the worst of the recession is ahead of us – it could be that the effect of the recession has already been priced in. House prices could level off out even while unemployment is still rising.

    I’m assuming anyone buying will want a long-term fix.

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  • new user 2007 says:

    Is he calling the bottom of the market YET AGAIN?:) The “clever money” that listened to him has now returned to the market every month since October 2007.

    Sigh:)

    He relies on idiots for his business…they lack the mental capacity to realise what he has said in the past (and how much they would already have lost if they had acted upon that)…the same people who talked about how much their property is worth, when it is going up, BUT then talk about how they are in it for the long term and so these are all paper losses, when prices are falling.

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  • wait for dixons group to go bust and then see how many houses come onto the market!!!!!!!!!!!!

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  • lucky Jim – i dont think HPs are a leading indicator for an economy (i could be wrong on that), and therefore cant agree with your premise. IF however other countries dont use the Ex Rate to increase their competitiveness / inflate to combat the deflation then i could see a floor that overseas peeps put in (lets see the next few months figures). However i dont believe that ( i think they will try to sell their currencies). So when the pound starts to recover then i think we will see some more falls…. with a lag….When and I suppose IF will that be.

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  • new user 2007 says:

    Lucky Jim:

    Using any theory…credit cycles (we have a long way to go before deleveraging completes), human behaviour (we are not past the denial phase, never mind entering the panic phase), supply and demand (draw a vertical supply curve and have the demand curve fall because of the credit and unemployment shock) and the general worsening of the economy that has only really just started (forced selling), and I doubt we are about to see any boost to the market.

    Mr ASSetz’s continuous (and proved to be wrong) line that we need to get in already is rubbish for the simple reason that if one looks at the prices indices they fall from a boom and then stabilise over many quarters, not a few months. His basic premise that we will therefore all miss the boat if we blink is therefore a nonsense.

    The optimum time to buy will be when banks have the money to give out loans (we will not get the additional overseas funds for years even if we nationalise). It was always about silly multiples and low deposits. So until we all yet again start believing that this time it is different the banks will not give easy credit.

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