50% drops by 2011

IveSeenTheLight

dopester wrote: »

Have you any idea what caused such dramatic HPI in Q3 2006 for Aberdeen?

Two recent-ish (September) articles for you ISTL... which you might like [and obviously I think they are whacko.]


:rotfl:


The Times: Scottish homes market view 2008: Aberdeen
Ahh - just that little unimportant variable eh.

How about this one?
http://property.timesonline.co.uk/tol/life_and_style/property/article4832124.ece

dopester

IveSeenTheLight wrote: »

How about this one?
http://property.timesonline.co.uk/tol/life_and_style/property/article4832124.ece

The headline figures may suggest prices have fallen back just a little from their peak, but as anyone trying to sell at the moment will tell you, the apparent stability of average prices masks a far more difficult truth: there are simply no buyers for some properties. The For Sale signs go up and the schedules are prepared, but there are precious few viewers, and fewer notes of interest or solid offers.

Scotland’s property market is not immune to the problems affecting our southern neighbour — or indeed much of the rest of the developed world — but before anyone gets too gloomy, a moment’s reflection is worthwhile: the vast majority of homeowners are sitting on such massive piles of equity that a minor correction in prices might feel bad but is of little real consequence.

I'd argue there is a frightening contradiction in that article. They are sitting on imaginary piles of equity. Earlier in to the article they admit there are precious few viewers, notes of interest or enthusiastic offers.

Money is real. Debt is real. Values are just agreements of worth in the market-place and can be subject to amazing changes both upwards and downwards.

The imaginary home "equity" might realistically not exist to the extent you believe, seeing as the market is slowing down all the time not hungry to rush to buy at current asking prices.

People seem to take for granted that financial values can be created endlessly seemingly out of nowhere and pile up to the moon. Turn the direction around and mention that financial values can disappear into nowhere, and they insist that it is not possible. "The money has to go somewhere...It just moves from stocks to bonds to money funds...It never goes away...For every buyer, there is a seller, so the money just changes hands." That is true of the money, just as it was all the way up, but it's not true of the values, which changed all the way up.

Asset prices rise not because of "buying" per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else - including those who own some of that asset and those who do not - need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer's, then the value of the asset falls, and it falls for everyone who owns it.

If a million other people own it, then their net worth goes down even though they did nothing. Two investors made it happen by transacting, and the rest of the investors made it happen by choosing not to disagree with their price. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.

http://www.elliottwave.com/deflation/

That said, I accept some of your theories.

RDB

Yoshua wrote: »

Do many others agree with this?

http://jp.youtube.com/watch?v=QzvuS22HnSY

Obviously many don't WANT to believe it so will try to justify somehow, but It makes sense to me.

I`m waiting for them to bottom out and finally get on the ladder, better start saving for 2011.

No I dont agree. I think more like 2010 they will be 50%down, even more difficult to find a buyer who can actually come up with the money by 2011.

By the way Mitchaa have you changed your mind about prices actually going up in 6 months time?:rotfl:

mitchaa

RDB wrote: »

No I dont agree. I think more like 2010 they will be 50%down, even more difficult to find a buyer who can actually come up with the money by 2011.

By the way Mitchaa have you changed your mind about prices actually going up in 6 months time?:rotfl:

Is this drivel still going:rolleyes:

You have misquoted me RDB, i did not say house prices were going to rise in 6 months time.

I said (IMO) that house prices will drop to a nationwide average of £145-150k, i never gave an actual timescale on this but i would estimate 9-12 months. I then said, i expect stagnation for a further 6 months and then increases thereafter,

So instead of 6 months like you are quoting me as saying, try 15-18 before houses start to rise again;)

Those of you predicting 50% nationwide drops have no credibility in my books. 50% nationwide would mean 70% in some areas and 30% in others. I.e its an average of the country. Where in the UK are prices going to drop 70% for example:rolleyes:

A lot of renters here who are trying to convince themselves that housing to buy is going to become cheap:rolleyes:, In the kindest way possible, you lot are off your heads.

Average house drops to £85k which most of you are predicting here, i'll have 2 maybe 3 then and so will anyone else that can comfortably afford a £250k mortgage at the moment.

As far as i can see, banks have not restricted lending multiples.

The point here is.... I have proven i have made equity in my home in this house price ''crash'' and not 1 of you have had the decency to apologise for your outbursts.

Says a lot about a person when they dont even have the balls to admit when they are wrong especially when proof in black and white is laid in front of them:rolleyes:

Shall i start a thread about Aberdeen(shire) HPI, all i need is the 7 1/4's of 2007/08 as evidence here. That way, it will ruffle more feathers than it has already done so as no-one believes that people are still up in the last 18mths.

Yes i am gloating and so what, im proving to you there are exceptions:p

mitchaa

novazombie wrote: »

Mitcha`s future signature

Aberdeenshire Average Property Price
(Source Nationwide)
Q1 2009...up to 20% down
Q4 2009... another huge % DROP
Q4 2010... Oh no I cant sell my house.
Q2 2011... I`ve spent so much on my house its not fair its worth only 50% now
Yes i have lost a lot of money in this HPC :mad:

And Q3 2011, Mitchaa buys next door to the left and next door to the right.

3x 4 bed detached homes...Yes please:rotfl:

Please update my signature when you see Aberdeenshire properties dropping firstly below £139k and then secondly by a further 50% down to £69,500:rotfl:

mitchaa

Additionally my £145-£150k prediction comes on the basis that....

Average household income is £38k pa

3.5x £38k = £133k lending power + 10% deposit

£150k being easily affordable.

People need to get out of the mindset that 1 x average income of £25k should warrant an average sized/priced home.

If house prices drop to £85-90k which most of you are predicting here, then the Average Joe family will be able to buy an average 3 bed semi detached home and probably a 2bed flat on top of that.

That is not going to happen and the reason as to why i think these predictions are ludicrous.

Housing is not cheap, never has been cheap and never will be cheap.

None of you guys/girls come up with any explanations to back up your wild theories, you just state them and think they hold water.

Prove to me differently and i'll happily eat my hat;)

chucky

RDB wrote: »

I agree with the OP 50% falls by 2011. London, Aberdeen everywhere.

i think you're sounding very desperate if you this will happen across the UK.

regardless of what happens the bigger cities will always have cash - domestic or foreign cash investors.

repo's and new builds other properties will drop in price - if you're expecting others to drop, you're probably not very realistic.

the over-priced silly priced flats defo will drop but 50%?!

mitchaa

chucky wrote: »

i think you're sounding very desperate if you this will happen across the UK.

regardless of what happens the bigger cities will always have cash - domestic or foreign cash investors.

repo's and new builds other properties will drop in price - if you're expecting others to drop, you're probably not very realistic.

the over-priced silly priced flats defo will drop but 50%?!

Yup pretty much agree with that:T

baby_boomer

Evening Standard - 50%+ drops in 2008, never mind 2011

"......Mr Conroy, 43, from Chelsea, and his partner Caroline Faulkner bought the tiny 120 sq ft flat [in Pimlico] for £175,000 in August last year. They had it valued soon after and were told it could sell for £225,000. But a year later its value had fallen to as little as £80,000.

Mr Conroy said: "It's like being hit in the stomach. It's the biggest drop I've heard of, and I scan all the property news. A £95,000 drop - that's 50%...."

## - Sorry to disappoint you mate, it's more like 54%+ :eek:


## - What could he do for a living, with judgement and Maths as poor as that ?

"The full-time property investor , who owns a string of buy-to-let flats, said he would rent it out. But if he cannot attract enough rent to cover the mortgage he will be in a serious financial trap....."

## - I can't wait to see the auction price.

chucky

seen this strory a while back in July - let's take into account an amatuer BTL who bought an extremely small studio flat that needed development which he obviously didn't factor into his buying price.

he then thinks he can sell this for lots of cash and make a profit.
taking one guy who has made a terrible decision and saying this happens across the UK isn't accurate.

## - Sorry to disappoint you mate but this happens in good markets and bad markets :eek: