50% drops by 2011

neverdespairgirl

Dithering_Dad wrote: »

I'd say that if a couple who both have careers in a profession, are very highly paid and have very secure employment would have sleepless nights if they are not careful with what they spend, then they're probably very risk adverse.

I put it badly.

What I mean is that we are fairly sensible with our cash, and choose not to spend more than we have. We are also in the fortunate position of having a lump sum as well.

In those circumstances, we are pretty risk-adverse because we don't want to go from a financial situation we don't worry about to one we do worry about.

neverdespairgirl

chucky wrote: »

sorry to bring this up and really not trying to be provocative but a few weeks ago you were arguing with me that I knew of a couple of friends that had purchased for peice of mind also for family stability so that they could have a property for X amount of years.

you were arguing that they should wait and get a property maybe at a cheaper price - isn't the peice of mind argument and the stability for the family the same thing?

Not provocative at all.

However, in my mind, the peace of mind is not being financially over-extended or losing equity hand-over-fist.

Yoshua

Anyone who bought at the peak on a two-year fixed rate mortgage two years ago is just about to find they have to refinance. It won't be cheap. And odds are it will mean that their cash flow turns negative. So will they stick or will they sell? In an environment where the 'value' of their 'investment' is falling by 10%-plus a year, I suspect they'll sell, or try to. The only way they will find a buyer is for cash, and not much at that because mortgages will be almost impossible and extortionate. This is a proper crash now – one caused by too much supply and not enough demand.

stevetodd

Yoshua wrote: »

Anyone who bought at the peak on a two-year fixed rate mortgage two years ago

But the peak was not 2 years ago it was last August

slipthru

Yoshua wrote: »

Anyone who bought at the peak on a two-year fixed rate mortgage two years ago is just about to find they have to refinance. It won't be cheap. And odds are it will mean that their cash flow turns negative. So will they stick or will they sell? In an environment where the 'value' of their 'investment' is falling by 10%-plus a year, I suspect they'll sell, or try to. The only way they will find a buyer is for cash, and not much at that because mortgages will be almost impossible and extortionate. This is a proper crash now – one caused by too much supply and not enough demand.

There will be those that stick surely, because they have not overstretched themselves and are financially secure. If i had a job i felt was secure and had money in the bank to cover any shortfall and bought a modest place with a mortgage i could easily afford in the last two years that is what i would do.

Yoshua

slipthru wrote: »

There will be those that stick surely, because they have not overstretched themselves and are financially secure. If i had a job i felt was secure and had money in the bank to cover any shortfall and bought a modest place with a mortgage i could easily afford in the last two years that is what i would do.

Of course some will stick it out and that's their choice. It wont be many though, only those who have already put tons of money into their property will be able to. The rest will sell taking a big loss or forced repossession.

But those that do stick it out paying their mortgage will be looking back in the future they may work out how much they have spent over the years on their mortgage. Then work out how much they could realistically get if they sold and wonder why they wasted 100s of thousands of hard earned money.

If they rented they wouldn't have had to worry about maintenance repairs etc, anything goes wrong just call the LL. And definitely they would be better off.

stevetodd

Yoshua wrote: »

Of course some will stick it out and that's their choice. It wont be many though, only those who have already put tons of money into their property will be able to. The rest will sell taking a big loss or forced repossession.

But those that do stick it out paying their mortgage will be looking back in the future they may work out how much they have spent over the years on their mortgage. Then work out how much they could realistically get if they sold and wonder why they wasted 100s of thousands of hard earned money.

If they rented they wouldn't have had to worry about maintenance repairs etc, anything goes wrong just call the LL. And definitely they would be better off.

But in your scenario you are saying they bought at the top of the market 2 years ago (and therefore suffered 2 years of price falls) but the top of the market was August 2007 so they actually had 10 months of increases before any falls

Yoshua

stevetodd wrote: »

But in your scenario you are saying they bought at the top of the market 2 years ago (and therefore suffered 2 years of price falls) but the top of the market was August 2007 so they actually had 10 months of increases before any falls

Why are you trying to start an argument all the time, Steve Todd?

I never said it was a definite top of the market exactly 2 years ago, not before not after as you are trying to say about August last year.

The truth is its very hard to say when the top was because each area is different. And why is it so important to you?

Would you just let it go, I cant see the relevance.

Can the rest of us talk about whats happening in the future something that is relevant.........

stevetodd

Yoshua wrote: »

Why are you trying to start an argument all the time, Steve Todd?

I never said it was a definite top of the market exactly 2 years ago, not before not after as you are trying to say about August last year.

The truth is its very hard to say when the top was because each area is different. And why is it so important to you?

Would you just let it go, I cant see the relevance.

Can the rest of us talk about whats happening in the future something that is relevant.........

I am not trying to start an arguement, I am merely pointing out a huge error in your scenario. It is very relevant because in your scenario someone would have suffered 2 years of house price falls, whereas in actuality they would have experenced 10 months of rises followed by 14 months of falls, that is a completely different picture to the one you are painting.

I think you need to understand the difference between debate and arguement, I am merely stating facts (or quoting from Halifax's monthly HPI, ok it's not perfect but in no way was 2 years ago the top of the market)

Yoshua

stevetodd wrote: »

I am not trying to start an arguement, I am merely pointing out a huge error in your scenario. It is very relevant because in your scenario someone would have suffered 2 years of house price falls, whereas in actuality they would have experenced 10 months of rises followed by 14 months of falls, that is a completely different picture to the one you are painting.

I think you need to understand the difference between debate and arguement, I am merely stating facts (or quoting from Halifax's monthly HPI, ok it's not perfect but in no way was 2 years ago the top of the market)

OK you were quoting from Halifax, well I was quoting from Moneyweek-

http://www.moneyweek.com/investments/property/why-house-prices-will-keep-falling-fast-13775.aspx
2nd to last paragraph.

I never made any scenario and I'm not trying to have a debate with you. I do see your point, but do you really think someone who bought a house about 2 years ago could have sold it for more 10 months later last August? The so called `profit` wouldn't even cover expenses.

If that's all you pick out to disagree with in my post does that mean you agree with the rest of it?