50% drops by 2011

Lotus-eater

mr.broderick wrote: »

We are nearing the point where the clever money goes back in.

Its only as good as the deal you are going to get. If landlords (with plenty of credit/cash) can't get the percentage they need to make a profit, they won't buy... unless they are uninformed LL's thinking the whole thing will take off again, are there any of those left?
I can answer my own question, yes there are, because I was speaking to one on Friday, he thinks the whole thing will start picking up and we will be where we are now in March 09 and then carry on as normal. ie the property market goes up as it did before.

I think he's wrong.

stevetodd

mr.broderick wrote: »

We are nearing the point where the clever money goes back in.
I would advise all potential ftb'ers to stay in rented though for the next 12 months. B.O.E rates will be 3% come march with mortgage rates closer to that figure. 2 houses in our road have been up for sale forever at peak 2007 prices, both with same agent reduced by 10k have both sold within the last 2 weeks, they have been on the market since we moved in here. Point of note we bought this house 30k less than they have sold for now. Having said that ours has been gutted by us. Going to be an interesting next 6 months, i for one have started scouring rightmove again, looking for an investment bargain....

Too early, I think we have 2 years of falling prices with another 20-25% off from current values which is why I will be buying between Nov 2009 and March 2010 (unless something comes up which I must have of course). But I do think this is going to be a good opportunity, but right now I think it's important to sit still and not jump in too early.

mr.broderick

stevetodd wrote: »

Too early, I think we have 2 years of falling prices with another 20-25% off from current values which is why I will be buying between Nov 2009 and March 2010 (unless something comes up which I must have of course)

Just can't see it. Good luck ste.

mr.broderick

Lotus-eater wrote: »

Its only as good as the deal you are going to get. If landlords (with plenty of credit/cash) can't get the percentage they need to make a profit, they won't buy... unless they are uninformed LL's thinking the whole thing will take off again, are there any of those left?
I can answer my own question, yes there are, because I was speaking to one on Friday, he thinks the whole thing will start picking up and we will be where we are now in March 09 and then carry on as normal. ie the property market goes up as it did before.

I think he's wrong.

Time will tell. I expected it all to be worse than this at this point. I negotiated really hard on this house as i anticipated big falls this last year. It hasn't really happened like that and this house now is looking like a good buy. I still have 30k which it can fall and i will still be level. It is all about the deal you get at the time, like i say, it is always a good time to buy.

Dithering_Dad

carolt wrote: »

Ha ha ha! DD is such a joker!

Because of course the housing market did so well in the late 80's/early 90's after the stock market's Black Monday in 1987. Like I wish I'd bought a house in 1988 or 1989! Great timing.

And surely DD can't be unaware that the annualised falls are going to start looking 'better' as soon as you get more than a year away from when prices were still rising?
Month-on-month drops are not falling, they're at best stabilising. But at the rate of 1.3-1.9% a month, that's still a very tidy annualised fall for anyone standing back and waiting before buying.

I'll buy when the maths makes sense for me.

At the moment, with house prices falling and mortgage rates still very high, renting makes far more sense for me - and the vast majority of would-be FTB's.

I'd love to believe we've heard the last of the bad economic news - but I think the oncoming recession - and associated unemployment - is not likely to be good news for anyone, let alone for house prices, however some may wish it so.

No need to make this personal Carol, you could have made your point (as I did) without all the hysterics and 'joker' nonsense. I thought we were past all that, as individuals and on the forum as a whole?

Anyway, it's refreshing to see that even a very enthusiastic HPCer like Carol will go as far as admitting that house price falls are 'stabalising'. However there are some basic arithmetical mistakes that are often made within this forum. Allow me to provide an example...

If we had 12 months of HPC with falls of 1% per month, the HPC crowd would calculate this as a 12% annual drop and remark that if someone owned a £100k house, after 12 months the house would be worth £12k less at £88k.

This is incorrect. After the first month the house would have reduced by 1%, which is a £1000 drop and so it would be worth £99k. After the second month the house would lose a FURTHER 1% of its value (99K x 1% = £990).

so to extrapolate... a 1% month on month loss would result in:
Month 1 = £1000 loss, house worth £99,000
Month 2 = £990 loss, house worth £98,010
Month 3 = £980 loss, house worth £97030
Month 4 = £970 loss.....

As can be seen, the losses are actually DECREASING as time goes by. In order to maintain the amount of losses, the month on month percentage would have to increase each month...

As far as your reference to house prices after the 'Black Monday' crash in 1987, here are the average house price figures from 1987 to 1989:


1987 Q4 £92,568
1988 Q1 £93,651
1988 Q2 £99,236
1988 Q3 £108,692
1988 Q4 £112,187
1989 Q1 £114,793
1989 Q2 £116,674
1989 Q3 £116,567

As we can see, despite the BlackMonday crash in October 1987, house prices continued to rise (and there was a big jump in Q3 1988) so I'm not sure what your point was in reference to this event?

mr.broderick

Dithering_Dad wrote: »

No need to make this personal Carol, you could have made your point (as I did) without all the hysterics and 'joker' nonsense. I thought we were past all that, as individuals and on the forum as a whole?

Anyway, it's refreshing to see that even a very enthusiastic HPCer like Carol will so as far as admitting that house price falls are 'stabalising'. However there are some basic arithmetical mistakes that are often made within this forum. Allow me to provide an example...

If we had 12 months of HPC with falls of 1% per month, the HPC crowd would calculate this as a 12% annual drop and remark that if someone owned a £100k house, after 12 months the house would be worth £12k less at £88k.

This is incorrect. After the first month the house would have reduced by 1%, which is a £1000 drop and so it would be worth £99k. After the second month the house would lose a FURTHER 1% of its value (99K x 1% = £990).

so to extrapolate... a 1% month on month loss would result in:
Month 1 = £1000 loss, house worth £99,000
Month 2 = £990 loss, house worth £98,010
Month 3 = £980 loss, house worth £97030
Month 4 = £970 loss.....

As can be seen, the losses are actually DECREASING as time goes by. In order to maintain the amount of losses, the month on month percentage would have to increase each month...

As far as your reference to house prices after the 'Black Monday' crash in 1987, here are the average house price figures from 1987 to 1990:


1987 Q4 £92,568
1988 Q1 £93,651
1988 Q2 £99,236
1988 Q3 £108,692
1988 Q4 £112,187
1989 Q1 £114,793
1989 Q2 £116,674
1989 Q3 £116,5671989 Q4 £111,958

Carol has always taken it all personally. It is a siege mentality that she has.
It is fed by the fact she is nearly 50 and still in rented, i actually genuinely feel for her.

MrDT

mr.broderick wrote: »

So much pent up demand, the english can't help themselves, frightened of missing out again. 2 Houses in our road been up for sale for nearly a year ,both just gone sold subject to contract, not sure at what price but i would guess near asking, both just been reduced by 10k, both with same agent.

Why do you guess near asking?

I viewed a house a few months back at an asking price of 80k, it sold about three months later, I assumed it would have gone for near asking price as at the time it was the lowest priced house in a remotely acceptable area. Land registry shows it sold for 65k. My guess was wrong...

Lots of houses round here go from 'for sale' to 'sold subject to contract' bvack to 'for sale'. After a few fluctuations like this, you then see them removed from market unsold.

ManAtHome

The major change over the last month has been umpty-billions of quids pumped into the system by central banks. This doesn't make the previous 1,400 billions of consumer debt vanish (and I wouldn't even guess at what real govt debt now stands at). But maybe it'll be "all over by xmas"... again.

ruggedtoast

Dithering_Dad wrote: »

Sorry LE, but I thought it was such an important point that seemed to be escaping people. As one reaches the bottom of a downturn, one finds that the month-on-month drops start to decrease. Have a look at the figures, the month-on-month drops are decreasing, i.e. we're reaching the bottom of the downturn.

We've just had the worst economic news for a generation, the stock market crashed and houses continued to drop. Stocks are now rising on sentiment that they've bottomed out. The stock market always leads the housing market in trends because it represents the economy and house prices follow the economy. Therefore, once the economy begins to recover the housing market will follow.

After peaking in the late 80s, property prices didnt start to recover until the mid 90s. If youre going to draw erroneous parallels with previous market conditions you may as well get your fact straight.

And just for your information house prices started falling almost 12 months ago, whereas the stock market didnt take a tumble until comparatively recently.

I know things are happening very fast and its hard to keep up, but try and pay attention.

Otherwise you'll have to keep on being wrong and people will have to keep on putting you straight.

mr.broderick

MrDT wrote: »

Why do you guess near asking?

I viewed a house a few months back at an asking price of 80k, it sold about three months later, I assumed it would have gone for near asking price as at the time it was the lowest priced house in a remotely acceptable area. Land registry shows it sold for 65k. My guess was wrong...

Lots of houses round here go from 'for sale' to 'sold subject to contract' bvack to 'for sale'. After a few fluctuations like this, you then see them removed from market unsold.

Yes I noticed a few go from sold back to for sale early this year as buyers anticipated more drops/mortgages pulled etc. We are nearing what i call the stable period where people actually believe houses have reached a value point. What i mean by this is even if they drop another 5-10% they are still affordable at the current level and will more than likely increase from the now buy point in the next couple of years (hope this makes sense guys)