50% drops by 2011

hethmar

No one will sell then though as there would be many millions in neg equity.

GDB2222

Yoshua wrote: »

This changes everything we have all been saying, is it true what Dithering Dad is saying- its only for 2 years?

Hmm, have to go back to work for a week, then start claiming again for another 2 years. :-)

There's probably a monthly limit on the amount they will pay - I thought there was, but I'm not a benefits expert.

I'm sure that if the 2 year limit looks like it will cause lots of repos it will simply be removed.

RDB

This is an ‘emergency’; everybody says so. All very well to take the high road when the weather is fine. But when storms come, people look for shelter wherever they can find it.

How bad will the storm get? This from Nouriel Roubini, Professor of Economics at the NYU Stern School of Business: ““The crisis was caused by the largest leveraged asset bubble and credit bubble in the history of humanity where excessive leveraging and bubbles were not limited to housing in the U.S. but also to housing in many other countries and excessive borrowing by financial institutions and some segments of the corporate sector and of the public sector in many and different economies: a housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, a hedge funds bubble are all now bursting at once in the biggest real sector and financial sector deleveraging since the Great Depression.

“At this point the recession train has left the station; the financial and banking crisis train has left the station. The delusion that the U.S. and advanced economies contraction would be short and shallow – a V-shaped six month recession – has been replaced by the certainty that this will be a long and protracted U-shaped recession that may last at least two years in the U.S. and close to two years in most of the rest of the world. And given the rising risk of a global systemic financial meltdown, the probability that the outcome could become a decade long L-shaped recession – like the one experienced by Japan after the bursting of its real estate and equity bubble – cannot be ruled out.

“At this point the risk of an imminent stock market crash – like the one-day collapse of 20% plus in U.S. stock prices in 1987 – cannot be ruled out as the financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and the investors have totally lost faith in the ability of policy authorities to control this meltdown.

“A vicious circle of deleveraging, asset collapses, margin calls, and cascading falls in asset prices well below falling fundamentals, and panic is now underway.”

And, looking in our old book, Financial Reckoning Day, written with Addison Wiggin, we find this remarkable forecast:

“If the US were to repeat the Japanese experience, stocks would be expected to return to their 1995 trend line, with the Dow below 4,000 in the year 2012, at the very moment when America’s baby boomers will most need their money.”

Get out your galoshes, dear reader...

from
http://www.fleetstreetinvest.co.uk/daily-reckoning/bill-bonner-essays/iceland-economy-melt-down-96185.html

brit1234

I can't see that many people wanting to buy if prices are still falling fast even if the funds come available.

Even buy to let won't be able to use their deminising equity to buy due to higher remorgage costs on their other properties due to the LTV.

Maybe their are some cash buyers out there, but they must of been prudent to get that money so I don't think they will buy unless they have to.

Still prices fall at there fastest rate ever, averaging out to be 20% a year at the moment. I also think the events of this month will show a massive drop in Decembers figures.

Yes we are well on to the way of 50%+ drops now. As others have said and been reported widely in the media that there has been 40, 50,60% drops in some areas on certain flats. Just think what will happen in Ashford when the Wilsons go bust, there will be a thousand properties floding the market all of one type in a small area. Could we see a 60% drop in Ashford next year?

Yoshua

It's what I suspected, the Wilsons are going bankrupt. For maths teachers (those who can't, teach) they really are poor at adding up!

Their demise probably won't help 900 families in Kent whos houses will all be repossessed. The Wilsons can never pay all the debt they will owe which ever bank was stupid enough to give them the money. And after all that they'll have to pay a massive CGT bill out of nothing or indeed first.

Kent is just one example, London has loads of companies like the Wilsons. Mass repossessions.

Maybe Japans 80% drop is not so far off.

dopester

StevieJ wrote: »

Should be some top rental yields for the pro buy to letters

Not if wages fall - or taxes shoot up (which I hope doesn't happen... income earners, especially the educated and genuine business minded contributors to society, shouldn't be punished as they create the economic values needed for recovery).

dopester

RDB wrote: »

The delusion that the U.S. and advanced economies contraction would be short and shallow – a V-shaped six month recession – has been replaced by the certainty that this will be a long and protracted U-shaped recession that may last at least two years in the U.S. and close to two years in most of the rest of the world.

L-shaped deflationary depression more like.

dopester

hethmar wrote: »

Yes, I think quite a lot of us have overlooked the provisions the government is making to avoid repos. Hopefully that will keep families in their homes. I do wonder if aswell as nationalising banks, we may find councils owning a lot of houses at the end of this period.

What kind of society does this lead to? Anyone who has bought a house and can't keep up repayments is bailed out to stay in their homes.....

...leaving others who actually want to buy, either with their own full/partial fund that represents sound money, or needing to borrow monies that banks are rationing because house prices are so high there isn't enough money to go around.

And distorted further by banks supposedly going to be lending out taxpayers money for to buy the over-valued property from other sellers/distressed sellers at high values.

It is market rigging for such properties not to go back to the market to find their value. A distorted market. It is crazy.

wharty

Well you aint buying my house for 50% less even if thats what its worth.
They can drop as much as you like but the people that dont need to sell wont sell at that price, simple. Your best hope is for a repo or somebody to die. Why do people think that just because homes MAY be worth 50% less in the future compared to now, that they will sell for that price?

I am british and stubborn, and have by no means overstretched my finances.
Bring the crash on i couldnt give a monkeys.:p

dopester

wharty wrote: »

Well you aint buying my house for 50% less even if thats what its worth.
They can drop as much as you like but the people that dont need to sell wont sell at that price, simple.

You don't have to sell at 50% less than peak. Just wait till one or two of your near neighbours sells at 30%, 40%, 50% below peak - or in your village or town.

Your house will automatically have its market worth reduced similarly. Sorry.. there is no escape from the crash miladdo.