Boom, Boom, Boom, Bust, Bust, Bust

Turnbull2000

Realy wrote: »

The main reason I could think is that 50% from now would not be possible is that it would be back to 1983 prices so most would be in NE who had purchased in the last 25 years and had not paid off thier mortgage.
Even from peak it would be 1988 prices so anyone who had purchased in the last 20 years.
That would be bye, bye every bank & business and job in the UK.
(based on adjusted nationwide figures)

I think you've got your numbers seriously wrong. Ignoring the obvious fact that many of those would have paid off a large portion of their mortgage, nominal prices in 1983 and 1988 £30,000 and £50,000. No threat of negative equity there.

Realy

Turnbull2000 wrote: »

I think you've got your numbers seriously wrong. Ignoring the obvious fact that many of those would have paid off a large portion of their mortgage, nominal prices in 1983 and 1988 £30,000 and £50,000. No threat of negative equity there.

Sorry I said adjusted, and most. So what is the obvious facts about 50% falls then?

globalds

Do you know how the Boomers were all "The sky's the Limit "..If the Market can take it then it's worth it".
This thread is going the same way in reverse ..
The effect of house price falls is the opposite of a snow ball going down a slope..The more prices drop ...The more people start being the solution and not the problem ..
The next few months are probably going to see some amazing statistics on house price drops ...But to re-connect this with reality ...There has been such a slow down in sales that the quantity is now so small that singles sales can affect the figures .
I don't doubt prices are falling ..And by quite a large percentage .
What I am including in my view is that these are transitional times and any one who used these figures to try and make long term trend predictions would be like a person using the time spent manoeuvring in a car park to calculate the average time of a 90 mile journey .

Woby_Tide

blisk wrote: »

Probably will be more, house prices have fallen off a cliff.

sadly some posters haven't done the same

Turnbull2000

Realy wrote: »

Sorry I said adjusted, and most. So what is the obvious facts about 50% falls then?

Well, it would take house prices back to more typical levels for a start. All it takes is a 30% crash in prices (nearly half-way there already), and roughly 4 years of salary growth. Not that far-fetched.

StevieJ

blisk wrote: »

Probably will be more, house prices have fallen off a cliff.

I reckon Your that horsey man with multiple personalities (this is your bear one).

StevieJ

Turnbull2000 wrote: »

Then care to explain why 50% drops are not possible? The bears have put their (often valid) arguments forward numerous time. Why don't you try the same. It's not that hard. Or is it just "supply and demand innit"?? :rolleyes:

Simple, if prices were to drop anywhere near 50% the queue of buyers (including Pro Buy to Let) would bounce them straight back, especially with interest rates of 3% soon to come (Libor not far behind when the market settles down).

GDB2222

StevieJ wrote: »

Simple, if prices were to drop anywhere near 50% the queue of buyers (including Pro Buy to Let) would bounce them straight back, especially with interest rates of 3% soon to come (Libor not far behind when the market settles down).

The question is where these buyers would get their finance from? There are a limited number of people able to buy houses out of cash. Most will need some loans, and will the banks be in a position to lend? In any case, it's a fallacy to think that the availability of cheap finance makes houses cheap - particularly if the rate is not fixed for the lifetime of the loan. It's that fallacy that produced the bubble in the first place.

House prices in this country have for decades hovered around the range where the average house was 3 times average earnings. That gradually crept up to around 3.5 times, sometimes higher, sometimes lower.

At the height of the bubble, the average price was over 6 times average earnings, fuelled by BTL and the availability of loans even at those multiples of earnings.

To get back to the long-term average multiple, prices have to fall by over 40% peak to trough. However, the average wouldn't be the average unless prices went below it some of the time. So, a 50% drop from the peak is quite possible.

If wage inflation takes off, house prices may not drop as much, but at the moment we seem to be heading for a recession, so I don't see massive wage increases coming.

Turnbull2000

StevieJ wrote: »

Simple, if prices were to drop anywhere near 50% the queue of buyers (including Pro Buy to Let) would bounce them straight back, especially with interest rates of 3% soon to come (Libor not far behind when the market settles down).

So hold on, if this were to happen, then why haven't price always been at this level? Oh that's right, because the banks wouldn't lend enough money....

skap7309

mrstinchcombe wrote: »

A few months or even weeks ago we used to have some decent house price threads and discussions. There would be some sensible views from both sides and very few trolls. Either way at least there was some substance and anecdotal evidence.

Now tho these boards have turned into a farce. There are ridiculous views to the extreme of a sudden unexpected rise in house prices that will go on forever (albeit mainly from one person through a few aliases). There are also ridiculous views of houses costing nothing because house prices will become unrealisticall low. Obviously evidence shows HPs falling but both these extremes through a minority of people turn every discussion into a load of nonsense.

When will it all end?

I was to post a similar thread and it seems to be the thoughts of a lot of people, this subject. There is no real discussion happening anymore and i find myself logging on, seeing the silly headline threads and leaving again.
Never used to do that.
The sooner (ahem), certain people leave the better and it would be nice to see them kicked off but technically they are not breaking any rules.