What year will it drop to?

RichOneday_2

Fair value (the trend line) has always been in the 2.75 - 2.95 x Av Male Earnings (it might not be PC but if you don't say male earnings there's no point in comparing recent data with aged data).

The latest boom led commentators to believe things had changed and a new factor had entered the market - the trickle down effect of inherited property which really was quite a new phenomenon for the population as a whole.

However, as we now know, inherited wealth has actually fuelled the consumer spending boom with property being funded by ever increasing unsustainable debt. So now the back tracking is starting and maybe the trend line will once again act as the barometer.

brit1234

There is a lot of people still in denial out there thinking that this won't last much longer. However they don't realise now the crash has started it will develope a motion of its own.

I'm going out on a limb saying universal 50% falls by mid 2010 and no rises before 2013.

RichOneday_2

brit1234 wrote: »

There is a lot of people still in denial out there thinking that this won't last much longer. However they don't realise now the crash has started it will develope a motion of its own.

I'm going out on a limb saying universal 50% falls by mid 2010 and no rises before 2013.

You're not going out on a limb - have a look at the Spreadfair quotes for National Av House Prices which reflect the prices being wagered in the wholesale money markets. They are still expecting a downward trend to Q4 2011. I suspect your 2013 for rises could be the very earliest.

pickledpink

It's funny how wishful thinking can distort the mind. It's a bit like those people who spend £10 a week on the lottery - they're convinced they're going to win one day.:rotfl:

The only reason you same few posters keep twittering on about how fantastic it would be if property fell by 50% (which it won't) is because you want to put people off buying now in the hope YOU'LL benefit!!

You don't care if families who have bought in the last couple of years' find themselves homeless - just as long as you can get your own grubby paws on a property at a ridiculously low level.

You're like a bunch of vultures picking over dead carcasses. Quite repulsive actually.

The joke is, IF you were ever to buy and YOUR property fell you'd be the FIRST to moan,moan,moan.............................

Anyway, it ain't gonna happen! Most properties are not falling - they're not moving. It's all static out there. And d'you know why? Cos except for the s***holes, or the few where people have HAD to sell - no homeowner is going to put their property up for sale in this market! They're staying put!:p

pawpurrs

well I am trying to sell, but am under no illusions how difficult it is out there.
I do thin prices will fall, but not as much as 50%, I think perhaps it will be a slow decline to approx 2000 levels, not more than that. It doesnt really bother me, but what makes it difficult is uncertanity, if it would drop and be done with, everything could start moving again, and I believe that to be in everyones interest. Its scary out there with this Credit crunch.

wymondham

pickledpink wrote: »

The only reason you same few posters keep twittering on about how fantastic it would be if property fell by 50% (which it won't) is because you want to put people off buying now in the hope YOU'LL benefit!!

You don't care if families who have bought in the last couple of years' find themselves homeless - just as long as you can get your own grubby paws on a property at a ridiculously low level.

You're like a bunch of vultures picking over dead carcasses. Quite repulsive actually.

The joke is, IF you were ever to buy and YOUR property fell you'd be the FIRST to moan,moan,moan.............................

Anyway, it ain't gonna happen! Most properties are not falling - they're not moving. It's all static out there. And d'you know why? Cos except for the s***holes, or the few where people have HAD to sell - no homeowner is going to put their property up for sale in this market! They're staying put!:p

I usually disuad people from buying at the moment, and I have a house without a mortgage... ie I have no vested interest in what I'm recommending so your assumption above is untrue. I suppose really I should be talking prices up as that benefits me (theoretically anyway!!)

50% or so losses will be good for new buyers as it will make property affordable again - you seemed to miss this point entirely. Obviously with this type of drop lots will be in negative equity, but to be blunt, people who purchased in the last year or so should have known they were buying vastly overpriced property and expected/planned for this - it was well known at the time and should not have surprised those that did their research before buying. Don't get me wrong, it's not nice if someone loses their home, but people need to be responsible for themselves, I don't agree with 'i was not told' culture.

I did read the other day people do more research into buying a car than a house!

I can't justify recommending something to people who are overstretching themselves, in debt and guarenteed to loose money they can i'll afford with negative equity. If however you still wish to promote this then that is fine.

I look forward to your posts picklepink as they cheer my day up as you provoke reactions to your outrageous sweeping statements. I don't agree with pretty much anything you say, but they are entertaining to say the least :rotfl:

I am curious though, can you clear up for me your current housing position picklepink ... do you own/rent/have mortgage etc..?? I 'm interest to see where your views come from.

anyway I digress ... i'm looking forward to what occurs with stamp duty. If the predicted falls occur, then income from this will be slashed as more go under the radar... Do you think they will re-adjust it??

space_rider

The house I bought in Dec 06 at 145,000 was valued for remortgage purposes for 115,000. Quite a big drop in 18 months.

The last house I owned I bought in 1997 for 32,000 and sold for 85,000 Nov 06. I can remember the talk that house prices were going down not long after I bought but it didn`t worry me as I wasn`t planning on moving for quite some time. Unfortunately for me but fortunately for some prices are down again. Whilst I`m not saying great they are going down, I do believe they needed to go down because it was hard for people to go up the ladder or to even get on the ladder so I still think this is better than how things were heading. I waited years to move as didn`t want to commit to a bigger mortgage. Now with hindsight, now would have been a better time to buy this house, but I may have struggled to get a mortgage now because of tighter lending restrictions which is also a good thing. My only saving grace was that I did have a decent size equity so not in a negative situation but if it does continue to decrease then one day I may be.

This house is on a new estate and the first owner bought for 185,500 so this house has really dropped in price. I live in the East Midlands which started dropping before the credit crunch.

amcluesent

Reversion to trend of 3.5 income multiple, but first there will be an overshoot on the way down, perhaps to 2.8 multiple, due to the effect of 'margin calls' on LTV ratios.



The austerity years of 2009-2013 will mean no recovery until 2014, required since the Tories will then be going to the country for their second term

There are some factors that will help, land price increase due to the need grow our own food again and inflation making fiat currencies lose purchasing power.

Of course a significant war in Europe or mohammedans exploding nuclear weapons in London would be exogeneous factors not accounted for.

mewbie_2

Thank you Spacerider for an interesting anecdotal. I hope everything goes OK for you.

A lot of VI's are blaming the market drops on the credit crunch, I think that is a small factor. Biggest price bubble in history might have more significance.

My view on which year we go back to? Well I thought they were toppy* in 2002/3.

*toppy - estate agent speak for absolute madly inflated price, slightly more comforting than absolute madly.. etc.

Pobby

I certainly don`t think people are ``staying put`` out of choice. Chatting to a buddy in Reading last night who said that there were plenty of for sale signs up but little shifting.

It`s fair enough to say that folk needn`t drop prices and hang on to the illusion that someone would offer mid 2007 values. Well OK but if you actually want to sell you need to drop a fair amount.

I certainly see problems from the btl market. I know of landlords who are subsidising their tennants rent. One friend, in the Dublin market, is subsidising to the tune of 750 euro per month!

I guess most of us here, bear or bull, are not thinking that there will be any hpi for a long time so it`s going to cost these landlords a pretty penny waiting for any real fiscal benefit to be forth coming from their investments.

Where I am . I personally know 2 btl landlords who are desperately trying to pull out of an off plan new build. They are pretty experienced and had a ball over the last 9 years but didn`t call the top in time.

Most properties right now have rubbish yields.There are some great yields still out there but you need to look at the auctions and most are few and far between.

Recent auction results have been pretty dire. Even an old bear like me has been surprised at how few are making the reserve. Maybe there are quite a lot of us out there who feel that a 40 to 50% fall is a real posibility.