House prices falling by c. 2% a month - so falls of 50% over 2 years quite feasible

Gorgeous_George

The falls are large but in very few sales.

Just as when houses were valued on average around £200K it is not real money. If everyone sold (when the average was £200K) they would not have achieved the average because the market would have been flooded with sellers.

Equally, if everyone who is waiting to buy tried to do so this wekkend, they would not get them at the current average price as there would be more buyers than sellers.

As time passes, pent up demand for housing will increase and when those famous grass shoots do show, it will be too late.

But I think there's plenty of time yet and the credit crunch is yet to chew. It's the chewing that will hurt.

GG

geoffky

Just think people were calling me mad and saying it will never happen five months ago and looks like it will be a average call.....how the mood has changed in the last two weeks astounds me.

justpurchased

carolt wrote: »

How intriguingly convoluted. Is that humour then?

No thanks, I'd rather not try it, it looks rather dull.

Your right, it's not for you.:rotfl:

Heyman_2

carolt wrote: »

Do you think so? Which brand?

Well OBVIOUSLY it's not going to be any of the supermarket brands, they never give you ANYTHING. Clearly it's going to be Kelloggs, I don't even know any other brand of cornflakes.

I hear there's a 'crunch' (sic) of sorts going on in the cereal market at the moment, by the end of next year, every cereal brand on the market is going to have dropped by EXACTLY 50%! Dunno what that'll do to the housing giveaway scheduled for late 2011.

ryandj

This is more interesting - with the current high levels of inflation, how much less are houses worth in real terms?

By the time houses get to 50% of their value, I imagine the people who are sitting waiting to snap up bargains will start snapping up bargains, and then we will see a new cycle of growth. As in the 70,80 and 90's. Possibly. Who knows though!?

By the way, regarding predictions of house price falls, don't believe any of them! No one knows exactly what is going to happen! Compare the expert predictions given a year ago to those given now, and to what has actually happened and most of them will be wrong! Its almost impossible to predict, apart from that they will go down a bit more!

carolt

Gorgeous_George wrote: »

The falls are large but in very few sales.

Just as when houses were valued on average around £200K it is not real money. If everyone sold (when the average was £200K) they would not have achieved the average because the market would have been flooded with sellers.

Equally, if everyone who is waiting to buy tried to do so this wekkend, they would not get them at the current average price as there would be more buyers than sellers.

As time passes, pent up demand for housing will increase and when those famous grass shoots do show, it will be too late.

But I think there's plenty of time yet and the credit crunch is yet to chew. It's the chewing that will hurt.

GG

But after big falls, even if everyone wanted to buy they wouldn't be able to, as the banks would be too scarred/scared to lend out huge wodges to everyone. The 100% + mortgages didn't hit town till several years into the boom.

snoopy78

Heyman wrote: »

Yes that's right, EVERY SINGLE house in Britain is going to drop in price by 50% by the end of next year and in a couple of years after that they're going to be giving them away with boxes of cornflakes.

Took less than two years for that to happen in the US, in fact it has got so bad that if you was to give a free house away with a box of cornflakes then you'd end up devaluing the box of cornflakes.

carolt

Ah, I know what I said wrong in my first post.

What I meant of course, was :

'House prices only ever go up.
It's a home not an investment.
You can't go wrong with bricks and mortar.
It's my pension, innit?
Well, they're not making any new land, are they?'

etc etc ad infinitum.......

zzzzzzzzzzzzzzzzzzzzzzzzzz

Heyman_2

To be boring for a second -

The housing market will continue to decline until the banks loosen up their lending criteria (i.e. LTVs) and start offering more products. It really is as simple as that.

Interest rates are actually - at the moment - a red herring.

By cutting out all the 95%+ LTV deals, restricting the 90% deals and positioning the best deals at 60% LTV, the banks have priced out a huge proportion of FTBs and most remortgages on properties purchased within the last few years, all of which account for the largest percentage of market activity.

The final piece in the meltdown puzzle that a lot of people are gleefully waiting for is for the BofE to start raising interest rates - perhaps to a couple of points higher than they are now. This will send repossessions through the roof as people cannot afford their payments and cannot remortgage due to negative equity, and as such flood the market with housing and then we really WILL have a crash.

Heyman_2

carolt wrote: »

Ah, I know what I said wrong in my first post.

What I meant of course, was :

'House prices only ever go up.
It's a home not an investment.
You can't go wrong with bricks and mortar.
It's my pension, innit?
Well, they're not making any new land, are they?'

etc etc ad infinitum.......

zzzzzzzzzzzzzzzzzzzzzzzzzz

That's the spirit Carol! But surely you mean it's an investment and not a home?