Nationwide -1.7% MoM. -12.4% YoY

dopester

!!!!!!? wrote: »

House prices crashing - and this is crash territory no mistake - and we're not even in recession conditions yet with the economy still coasting along with almost a decade's upward momentum behind it ..... very, very, ominous.

It has been a full on crash already, although the press and VIs try and play that down. It still has a very long way to go, for an economy that has been built to run so closely to continuous house price inflation, and the City institutions suffering for their greed.

Sellers are still living in the old world with their asking prices.

However, leading City economists said that the housing market has never witnessed an annual fall of more than 10 per cent except for in 1931 – a year when Britain was hit by the aftermath of the Wall Street crash and sterling collapsed.

David Owen, chief European economist at investment bank Dresdner Kleinwort, said: “It is a major collapse. The last correction in house prices was around 20 per cent from peak to trough.

"What we are seeing in terms of declines at the moment – those sorts of falls are absolutely unprecedented, certainly in living memory, and you would have to go back to the 1930s to find anything similar.

According to the credit rating agency Standards & Poor’s, the number of people in negative equity has now climbed to over 200,000 – a near trebling of the 70,000 it estimated at the end of July.

Michael Saunders, chief UK economist, at the world’s largest bank Citigroup, pointed out that this year’s house price crash has happened far quicker and hit people more severely than the declines seen during the early 1990s.

“In the early 1990s, the peak-trough decline in house prices was 13.1 per cent, and this occurred over 74 months, from May 1989 to July 1995.

"Now, house prices are down 12.7 per cent already, in just 12 months.

Jonathan Cornell, at mortgage brokers Hamptons, said: “Because there are so few property transactions happening at the moment, it’s getting very hard for valuers to put a value on any property.

"If the most recent house sold in a certain street was four months ago, well that was another world back then.”

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/2795677/House-prices-are-falling-at-fastest-rate-since-the-Great-Depression.html

dopester

Realy wrote: »

If all that was true it would not be just a housing meltdown we are all in the poo. You might as well get the £50 notes out for toilet paper.

I'm not so sure.

Even with a house price crash that many find hard to imagine (-50% or -70%), I still think we'd be ok; that the system could handle the readjustment.

Not all home-owners are burden by heavy debt, although most like the high values attached to their properties. Property is only shelter after all.

Paul_N_4

Realy wrote: »

If all that was true it would not be just a housing meltdown we are all in the poo. You might as well get the £50 notes out for toilet paper.

As for not being in recession conditions are you having a laugh!

I think people thought it would have been a lot worse being 1 year in.
Yes prices have dropped (is that not just correction) but forced sales are no where near what people thought they would be.

And still house prices have dropped off a cliff. What's in store for us when unemployment and the real recession come along?

Realy

dopester wrote: »

I'm not so sure.

Even with a house price crash that many find hard to imagine (-50% or -70%), I still think we'd be ok; that the system could handle the readjustment.

Not all home-owners are burden by heavy debt, although most like the high values attached to their properties. Property is only shelter after all.

I agee with most of your point (that is why I said in !!!!!! case we would be all in the poo as we would be looking at hyperinflation etc)

But 50-70% drops would cripple the economy as nearly everyone would default.
50 % would be 1983 adjusted (they should have finished their mortgage)
70% would be before 1976 records (adjusted).

And I just can't see it we would have no financial system at all.

skap7309

TDS wrote: »

Glad to see my home town making a top 5 appearance. Well done.

Yes, my closest also (Cambridge). Local news this morning reporting East Anglia one of worst (best) regions for price drops. Good times :beer:

Realy

Paul_N wrote: »

And still house prices have dropped off a cliff. What's in store for us when unemployment and the real recession come along?

But rampant HPI causes a cushion for people to sell. Most sales at the moment are STRs cashing in or people who have to sell I would say.
All could well have (providing they are not a FTB in the last 2Y) plenty of "equity" to lower prices for a quick sale.
During the last crash how many repos were there before they it 12% lower?
And how much of that was based on high mortgage rates and inflation?

Not saying this is true but you would have to look at possible reasons why prices fall quickly (quicker than ever before).

Edit, on your last point I think in recession you will look at slower falls and less properties on the market as people try to hold on to their houses rather than cashing in (now). You will see an increase in defaults (obviously) and that will then be the driving factor of the market but at the moment I would say the main driving force of drops (and you may think it as strange) is greed.

WTF?_2

Realy wrote: »

If all that was true it would not be just a housing meltdown we are all in the poo. You might as well get the £50 notes out for toilet paper.

As for not being in recession conditions are you having a laugh!

No, I'm quite serious. Have you ever lived through a recession? What we have experienced in the last year is nothing even close to it.

I think people thought it would have been a lot worse being 1 year in.
Yes prices have dropped (is that not just correction) but forced sales are no where near what people thought they would be.

Circa 12% falls in a year with high employment levels, low interest rates and an economy not yet in full recession. If that's your idea of not doing so bad, boy are you in for one HUGE shock in the next 12 months

Realy

!!!!!!? wrote: »

No, I'm quite serious. Have you ever lived through a recession? What we have experienced in the last year is nothing even close to it.



Circa 12% falls in a year with high employment levels, low interest rates and an economy not yet in recession. If that's your idea of not doing so bad, boy are you in for one HUGE shock in the next 12 months

1: Yes

2: look at my last post not HPI crowd but 12% falls without the usual factors has to have a reason behind it. (Try lateral thinking as wanting somthing can narow your view)

PS if you are not serious you really think we are not in recession conditions? Have you lived through a recession? All the pointers are already in place.:rolleyes:

dopester

Realy wrote: »

I would say the main driving force of drops (and you may think it as strange) is greed.

There may be an increase in STR-wannabees to lock in their gains at current valuations it is true. That is part of the greed as you call it?

I think it is a reaction to multiple serious circumstances of the economy, but way way too late, or if they saw it coming earlier, too reluctant to aggressively cut their prices earlier to escape with a decent "profit" (for those who could) for the new circumstances of the market.

With shares, you can sell if you are worried, and complete the deal within minutes of deciding, and cash-in. Not so with houses and apartments is it? Illiquid. Many are strapped in and will see the house price inflation of recent years imagined wealth/equity slashed.

And of course others have those who want to trade, those who have to sell for employment reasons, and all the BTL merchants trying to offload multiple properties, with unemployment and recession/depression and deflation on the way.

WTF?_2

Realy wrote: »

1: Yes

2: look at my last post not HPI croud but 12% falls without the usual factors has to have a reason behind it

:rolleyes: PS if you are not quiet serious you really think we are not in recession conditions? Have you lived through a recession all the pointers are already in place.

The recession is coming, the first waves of the approaching hurricane are lapping the beaches, but is nothing like full on yet. We are in the very early stages of an economic crisis (falling growth over the last few quarters and zero growth last quarter) but employment is still high (only began falling a few months back) and interest rates are remarkably low, especially given inflation.

We are of course in a full on financial system crisis but that's not the same thing as the economic recession. Although it will exacerbate the coming economic disaster and in turn be worsened by it.


Really - if you think the conditions you see right now, today, are anything like what we saw even the middling-bad recession of the early 90s you must have a seriously defective memory. Don't worry - once the actual recession hits you'll notice it all right.