50% drops by 2011

Dithering_Dad

House price drops are already slowing down.

hethmar

Kong wrote: »

Interesting video and all that but don’t forget Jonathan Davis the ‘expert’ in the video has been banging on about house prices crashing for years and he thought he would be clever and make a quick buck by selling his house to rent (STR) back in 2002 and then buying back after the crash. Well that back fired didn’t it - not taking any advice from you thanks mate!! He and his chums at Capital Economics were talking about a 30% crash from 2002 levels http://news.bbc.co.uk/1/hi/business/2577069.stm .

I am sure that prices will continue to fall but by 50%? Not from where I am standing but I am not an ‘expert’ so what do I know.

I remember several people thinking how clever they were selling up when these predictions hit the papers in 2002.

By 2004 and they had spent a lot of their sales profit on renting places and were desperately trying to claw a way back onto the property ladder but obviously at much increased prices.

going2die_rich

Since I have seen flats for £60k last year. I guess if thats true, they'd be going for £30k each... doesn't sound very feasible to me. I'd buy 2 outright by the time it's 2011 if it was... rent them out as a vicious landlord whose aim is to bleed tenants dry... what a dream that would be

Doubt it will happen though, too much wishful thinking. I think their will be one or two exceptions, where new flats have shot up in their thousands so in desperation some people will have little choice but to slash it right down.

Max_Headroom_3

stevetodd wrote: »

The spread betting prices are merely financial firm's opinions of how far the market will fall considering all the factors you mentioned.

There were an awful lot of financial firms predicting prices would continue to rise only 12 months ago! Being a financial firm doesn't make them correct.

GDB2222

stevetodd wrote: »

You don't need to look further than the spread betting prices for the best information as you can actually trade on these prices now, buying or selling so the market makers would lose a fortune if they get it wrong badly. Of course yes it might turn out different to the mid spread price but what I am saying is this is the best info and they are indicating approximately 37% drop from summer 2007 for london prices.

Actually, I think the Tradition HPI futures may be a slightly better indication, as it's a more professional market, but that may just be my prejudice as I do not know who is involved in the spread-bet market.

Although the banks have been rescued, at least for the time being, the economic outlook generally has worsened over the last month. I think it is inevitable that we are going to have a pretty deep recession - as bad as we have had in the last 50 years, but not Great Depression style. I have not seen any updates on the spread-bets, and I would be interested to know if these have trended downwards over the last month?

stevetodd

Max_Headroom wrote: »

There were an awful lot of financial firms predicting prices would continue to rise only 12 months ago! Being a financial firm doesn't make them correct.

Do you think maybe that's why I said:

"Of course yes it might turn out different to the mid spread price"

in my post?

Also are you sure about that? I suspect that the financial spreads market would have been predicting a fall back in Oct 2007:
http://blogs.ft.com/undercover/2007/11/department-of-uhtml/


EDIT: I couldn't find anything dated OCT 2007 but here is a link that leads to the city prdicting a 7% fall back in Nov 2007

stevetodd

GDB2222 wrote: »

Actually, I think the Tradition HPI futures may be a slightly better indication, as it's a more professional market, but that may just be my prejudice as I do not know who is involved in the spread-bet market.

Although the banks have been rescued, at least for the time being, the economic outlook generally has worsened over the last month. I think it is inevitable that we are going to have a pretty deep recession - as bad as we have had in the last 50 years, but not Great Depression style. I have not seen any updates on the spread-bets, and I would be interested to know if these have trended downwards over the last month?

I think the spread quotes may be slightly worse as if it goes wrong by a large degree it is probably more likley that they would fall further rather than fall much less.

Do you have link for these HPI futures (to be honest I am not sure what they are, so please forgive me if my first paragraph turns out to be rubbish if these are an alternative betting market also, although if it was a fixed price market that would still make my comment valid)

GDB2222

stevetodd wrote: »

I think the spread quotes may be slightly worse as if it goes wrong by a large degree it is probably more likley that they would fall further rather than fall much less.

Do you have link for these HPI futures (to be honest I am not sure what they are, so please forgive me if my first paragraph turns out to be rubbish if these are an alternative betting market also, although if it was a fixed price market that would still make my comment valid)

Link here:
http://www.tfsbrokers.com/pdf/RISK&MANAGE/2008/Oct-08.pdf

I think the newsletter looks as though it was put together by a school-boy, but don't be put off.

Dithering_Dad

House price drops are already slowing down

stevetodd

GDB2222 wrote: »

Link here:
http://www.tfsbrokers.com/pdf/RISK&MANAGE/2008/Oct-08.pdf

I think the newsletter looks as though it was put together by a school-boy, but don't be put off.

Thanks for that, I can see where the difference is I was quoting from summer 2007 prices (ie top of the market) whereas the prices here in that small table are showing from Aug 2008 which obviously starts from a point that prices have already fallen