Am I missing something...

kriss_boy

I dont get why people care sooo much about the potential housing market crash.

Up here in Scotland things have slowed down but prices havent taken a massive hit. Sure many houses are sitting unsold but that doesnt mean the sellers are about to suddenly accept 25% less than they once wanted.

Me and my girlfriend bought our beat up 1 bed semi for 84K in Feb.. having watched many identical done up ones sell for the mid 90s. We've only spend a couple of grand on it and done all the work ourselves, so Id say its now worth the same as the very ones that once sold for 93/94K.

But whats the worst that can happen? We sell it in a couple of years for what we paid? Or heaven forbid at a loss of a couple of grand? Big deal.

If thats the case then a 3 or 4 bedroom house that was once too dear will suddenly be affordable on our incomes.

I really dont see what this is a massive deal. Its all relative. Who is effected in all this? The idiots who all paid 80K for a crappy 1 bed ground floor flat in a rough area?

I refused to get caught up in bidding wars will all those nutters paying 75K for a delapitated flat.

My semi can be extended cheaply to make a profit or recoup any potential loses should the housing market really crash.

Zelie

In a nutshell: Negative equity.

Whilst it's laudable to buy a property in keeping with your means it is also worthwhile considering what might happen if a person loses their job, has a partner move out/die etc. Changing life circs can mean that people are obliged to sell up and those are the people who can't afford to leave a house sitting empty for years on end with no income being generated from it. Even if they are not living in it they still have to pay the mortgage. And that can get pricey if they are in negative equity - often far easier to drop the price and be shot of it.

lincroft1710

If house prices fall like they did in the early/mid 90s, then you can multiply your "a couple of grand" by ten! Prices of 1 bed properties (both flats and terrace/cluster homes) took the longest time to recover.

Housebuilders are laying off workers, no doubt estate agents will be next. If mortgage rates increase, then possible repo situation for those who overstretched their finances and they lose out big time as they're in negative equity.

*Louise*

kriss_boy wrote: »

I dont get why people care sooo much about the potential housing market crash.

Up here in Scotland things have slowed down but prices havent taken a massive hit. Sure many houses are sitting unsold but that doesnt mean the sellers are about to suddenly accept 25% less than they once wanted.

That's very true reagrding the position here in Scotland. But prices are lower up here in the first insance compared to prices down south (Unless you're looking in the centre of Edinburgh/Glasgow). Therefore, the lowering of prices isn't having such an effect on us as elsewhere in the country.

We can't afford to be smug about it though, the fact that it is still harder to get a mortgage, and very rare to get a 100% one, will cause us problems here soon enough, and will have more of an effect on prices eventually.

People who can sit tight and wait it out through any neg equity phase will be ok - but the ones who HAVE to sell, for whatever personal circumstances are the ones who will lose out.

Awful for them...good for buyers though.

It's 'swings and roundabouts'.

lostinrates

kriss_boy wrote: »

I dont get why people care sooo much about the potential housing market crash.

Up here in Scotland

84K in Feb.. having watched many identical done up ones sell for the mind 90s. .

Because sadly, down here in the south of England parking spaces can cost more than that in london! although London wages are higher than average, london property proces are disproportionatly higher than average.

so, many, many, many people cannot get on the property ladder, and any have but by getting over their heads in debt. a five percent drop off the price of your 84K flat when sold is perhaps repayable, certainly over sometime, but a 5% drop on a property much more expensive that on realisation could put people in debt for a long, long time.

Captain_Mainwaring_2

kriss_boy wrote: »

I dont get why people care sooo much about the potential housing market crash.

Up here in Scotland things have slowed down but prices havent taken a massive hit. Sure many houses are sitting unsold but that doesnt mean the sellers are about to suddenly accept 25% less than they once wanted.

Me and my girlfriend bought our beat up 1 bed semi for 84K in Feb.. having watched many identical done up ones sell for the mid 90s. We've only spend a couple of grand on it and done all the work ourselves, so Id say its now worth the same as the very ones that once sold for 93/94K.

But whats the worst that can happen? We sell it in a couple of years for what we paid? Or heaven forbid at a loss of a couple of grand? Big deal.

If thats the case then a 3 or 4 bedroom house that was once too dear will suddenly be affordable on our incomes.

I really dont see what this is a massive deal. Its all relative. Who is effected in all this? The idiots who all paid 80K for a crappy 1 bed ground floor flat in a rough area?

I refused to get caught up in bidding wars will all those nutters paying 75K for a delapitated flat.

My semi can be extended cheaply to make a profit or recoup any potential loses should the housing market really crash.

Firstly C75K is hardly the top end of the market. For many people that is the minimum deposit.

Secondly - you would say your house is worth whatever, and I would say that my ***** is a bloater, it is worth whatever you get when you sell it.

You need to understand that people are already starting to lose a great deal more than you original purchase price ,

Bf109

Originally Posted by kriss_boy
I dont get why people care sooo much about the potential housing market crash.

OK. Average price is london is £350,000.

If prices drop by 10% then I save £35,000.

If they drop by 20% I save £70,000.

These are actually quite large sums of money and certainly ARE worth getting excited about.

Another way of looking at it is that larger/better properties keep falling into our price maxima - while for others not so well off as us, they now have a hope of being able to buy their own house, sometime in the not so distant future. (It might come as a shock to you but £90k will likely buy you a 25% share of a new-build studio in the worst parts of stabby gang-land london).

dwsjarcmcd

You should care because this is not just about house prices, it's about the whole economy going into meltdown potetially. Jobs are already being lost in many sectors, not just in housing and finance and I'm sorry to say that I fear job losses will be widespread.
In which case a couple of grand loss on your house will be the least of your worries!

MRSTITTLEMOUSE

dwsjarcmcd wrote: »

You should care because this is not just about house prices, it's about the whole economy going into meltdown potetially. Jobs are already being lost in many sectors, not just in housing and finance and I'm sorry to say that I fear job losses will be widespread.
In which case a couple of grand loss on your house will be the least of your worries!

Builders are paying off workers big time in all area's,it'll be manufacturing next.
I think they should show that series on the tv again.Boys from the Black Stuff,remember Yosser Hughes and his "gissa job" and "I can do that",having lived through a recession with three kids and a husband made redundant and unable to find a job for three years(because there was no work to get)I remember it well.House prices are just a symptom of a very nasty disease and one that can't be ignored.

Bf109

MRSTITTLEMOUSE wrote: »

House prices are just a symptom of a very nasty disease and one that can't be ignored.

In this case, they are not so much a symptom as a cause.

Bf109

I think the other thing to note is that the few thousand jobs cut by big builders is going to be masking tens of thousands of job cuts in contactors/sub-contactors with knock on effects on suppliers and from there, the whole economy.

A building sector collapse is really quite serious indeed.