The real question is why house prices aren't falling faster?

GDB2222

The real question is why house prices aren't falling faster?

All the fundamentals are pointing to a vast bubble that's been pricked, but we are seeing a very slow deflation rather than a rapid pop. I'm sorry for the people still buying, although there's obviously a very delighted seller at the other end of every deal.

I guess that there's a vast number of potential sellers who don't have to sell and are still in denial about falling prices. Couple that with sellers who do have to sell but can't afford to reduce their prices.

Generally, where there is an expectation of falling prices, one would expect the market to react quite quickly, in fact almost instananeously. That's what happens in stock and commodity markets. I guess that houses must be different.

Thomas99

GDB2222 wrote: »

That's what happens in stock and commodity markets. I guess that houses must be different.

Liquid assets..."a liquid asset is cash or any type of negotiable asset that can be converted quickly and easily into cash".

wymondham

As soon as the schemes running that 'help' people onto the ladder dry up, then prices will drop like a stone....

jamescredmond

HP'ds didn't double in value overnight, so can't be expected to halve within the same timescale.

historically, prices are falling pretty rapidly. the 'bottom' (30%ish?) may be reached sooner rather than later.

when this happens I'm hope that those who post here who have been priced out recognise the 'bottom' and come back to tell us that their patience has paid off and they have purchased properties that, a few years earlier, were unobtainable.

I include my kids in this increasingly confident hope.

Chris2685

wymondham wrote: »

As soon as the schemes running that 'help' people onto the ladder dry up, then prices will drop like a stone....

From my experience, it seems they are drying up fast... If they do dry up, I sure hope you're right about prices dropping like a stone, and hopefully they will drop like a stone within the next couple of months if they do!!

pickledpink

It's actually those buyers who bought in the last couple of years', or those who took out secured loans against their property that may need to sell,

The rest, like for example those who bought as late as 2006 will just wait until the tide turns. Take the average couple in their 30's who have had a mortgage for the last 5 (maybe 10) years' - they would have a lot of equity in their home and with the rising price of inflation their mortgage repayments would be very, very manageable.

Most people just have no need to sell, and while the market is in a dip they won't. The slow bursting is proof that many people already made enough money out of their properties to sit tight!;)

This is why the really nice properties are not coming on the market; it's just the ones which were overpriced in the beginning; the ones which no-one really wants to buy due to their undesirability factor - or the ones where first time buyers bit off more than they could chew - and most FTBs' properties are right down there at the bottom of the ladder.

That aside I can see a further widening between the haves and have-nots - now that the banks are really tightening up on their lending criteria many ftb's are NEVER going to get their foot on the ladder.

Cannon_Fodder

It took between 4 and 6 years for prices to drop between 11 and 22% according to Halifax/Nationwide figures for the early 90's "crash"...

We've had around -10% in 1 year some sources say, so extrapolating we could hit between -40% and -60%...

Even the most raving HPCer would be happy with those numbers...

neverdespairgirl

pickledpink wrote: »

This is why the really nice properties are not coming on the market; it's just the ones which were overpriced in the beginning; the ones which no-one really wants to buy due to their undesirability factor - or the ones where first time buyers bit off more than they could chew - and most FTBs' properties are right down there at the bottom of the ladder.

Nonsense. There are some lovely places for sale.

sympatex

From my experience of browsing rightmove recently with property-bee (since Jan/Feb this year) i'd lend some weight to pickledpink's point. I've only seen 3 really nice ones and they didn't change in price and were sold pretty quickly. There are lovely places for sale but they will be sadly the last to reduce their price!

Gangstabird

Many people are still on low fixed rates so are not feeling the pinch via their mortgage yet. Also lots of people who want to sell but are not in a hurry are either sticking with the price they want or just not bothering to move and taking their houses off.

I don't think people can actually believe what's taking place, they think it's just a blip.

pickledpink

There's a few nice properties about - but not that many!!!

The few nice ones are mainly owned outright by the sellers (or they have massive equity) and they may want to upsize or downsize. The falling market makes no odds to them; if their property has dropped so has the property they'll be looking to buy. Makes no difference.

They may well be cash buyers with no need for a mortgage - putting them in a great position.

It's the FTB's who have a small deposit that will feel the brunt of this. They just WON'T get a mortgage unless they're squeaky clean; have a really secure job........and even then they'll have to be earning a packet as the banks are only going to lend 3 times your salary.

I think it's actually going to get HARDER for FTB's to get on the ladder. And if they do they'll be limited as to what they can buy.