Get ready for the housing crash part II

kennyboy66 wrote: »

I'm no tin-hatter but if there was an office sweep on when the next peak will be reached, I would be praying for the ticket marked 2020.

But I bet you would not bet this would play out the same as the last either.

I have said a long period of stagnation for a long time, otherwise I would be on the "high inflation" band waggon.

I am not saying prices will be higher or lower come this time next year, I did that last year.
But also I would not compare either of the last two crashes to this one either.

If it was that simple the fashion, music TV would be the same for each crash also (infact their is most probably more evidence for that than the crashes are going to be the same)

I go along with what baileysbattlebus said.

baileysbattlebus wrote: »

The last crash played out differently in different parts of the country - we live near Reading and prices dropped off a cliff - in the north east where my sister lives the falls were much slower and lasted much longer.

Very true, there were also areas that fully recovered from the drops within a year.

http://forums.moneysavingexpert.com/showpost.html?p=18398993&postcount=72

the_ash_and_the_oak wrote: »

This is interesting. What were rates in 92 compared to 90 and 88? (not base rate - but ave mortgage rates)

Halifax mortage rates were about 11.5 to 12.0% in 1987/8 - I know they seem high now - but it was quite normal then - we first bought in 1982 and the rate was 12% - funnily enough the Halifax was our mortgage provider.

End of 89 14.5% until March 1990

March 1990 - Nov 1990 15.4%

Dec 1990 - Apr 1991 14.5%

May 1991 - 13.75 - then 12.95, 12.45, 11.95, 11.5

towards the end of 1992 they were back to normal 11.5% (which is when prices bottomed out for us). So for a year and half rates were what I would term high.

One of the problems was that a lot of people had elected to have mortgage rates changed annually - great when rates are falling - you pay the higher rate and then see a big drop the following year. Conversely, interest rates rising and your payment not, meant that the following year you not only had the new higher rate of interest to pay - but also all of the money that should have been paid and hadn't. And if you had the money to pay off any extra - you could pay it off - but it wouldn't come off your balance until the end of the year - the building society just hung onto it - in general rates were calculated annually and not daily as they are now.

By the time we moved in 1993 - rates were about 9% - it was like Xmas - we were paying less money for a much bigger house and a substantially bigger mortgage - couldn't believe it. And we had an interest rate that was calculated daily and not annually - life was grand!!!!

Also people say there was inflation and yes there was - unfortunately for a lot people like me - that didn't get reflected in pay - I had a 3% pay cut and then nothing for about 3 years. And I wasn't alone - manufactuing (where I worked) was collapsing about our ears -

"pay cut?"

"Yes please" & doffs cap.

You were just grateful to still have your job

I don't know who was getting inflationary pay rises but with factories closing like there was no tomorrow - it wasn't manufacturing.

It was tough, infact it was dire.

baileysbattlebus wrote: »

"pay cut?"

"Yes please" & doffs cap.

You were just grateful to still have your job

I don't know who was getting inflationary pay rises but with factories closing like there was no tomorrow - it wasn't manufacturing.

It was tough, infact it was dire.

That is a good point and one of the reasons it is different this time.

This is the first recession we have had that as happened to all services, in the past they were very manufacturing orinentated.

I wonder if the could have a bearing on house prices also so not seeing gluts of houses of the same type in the same areas.
But the pain fairy equally spread out over the country covering all housing types. Could be a possibilty I suppose.