50% drops by 2011

mr.broderick

Dithering_Dad wrote: »

I see what you're getting at here, but as the standard mortgage term is 25 years (actually more than this if you move house a few times), you will find that your home ownership will span 3 or 4 recessions or economic downturns.

Would you then say that people should never buy a house because they will suffer in a recession and may lose it?

In many respects starting a business or making a house purchase in a recession gives you a position of strenth rather than weakness - you know what the bad times are like and so instead of making merry in the good times, you remember the bad and salt money away.

I don't want to generalise too much but I must admit that I have found that a lot of the HPC people are very risk adverse, in fact overly so. Perhaps this is why many of them miss financial opportunities and then grumble of forums about their lack of 'luck', when in fact they should be addressing their lack of confidence?

Be careful DD the members will be accusing you and i of being the same.
Exactly what i have been saying here for ages.

carolt

How do you make it 3 or 4 recessions? If I'd bought 25 years ago, in 1983, I would have faced 1 recession only.

If I want to buy, I'd buy after the recession, not just before it starts. Ie once prices have fallen rather than before.

mr.broderick

carolt wrote: »

Quite. We all remember the very vocal mse'ers - now sadly no longer posting let alone vocal - who suggested a year ago that prices would never fall! Just because lots of people believed property prices could only go up didn't make it right.

A minority of posters at that time - and yes, I was one - believed prices would fall. I still think that.

Maybe I'll be proved wrong this time. But I doubt it. Time will tell.

Come on everyone knew prices would tumble. It was inevitable. Anyone who thought differently are either high on something or just plain jovial. Prices have fallen, they have just not fallen enough and quickly enough for most of the hpc'ers. I am glad to be honest.

andys15

Dithering_Dad wrote: »

I see what you're getting at here, but as the standard mortgage term is 25 years (actually more than this if you move house a few times), you will find that your home ownership will span 3 or 4 recessions or economic downturns.

Would you then say that people should never buy a house because they will suffer in a recession and may lose it?

In many respects starting a business or making a house purchase in a recession gives you a position of strenth rather than weakness - you know what the bad times are like and so instead of making merry in the good times, you remember the bad and salt money away.

I don't want to generalise too much but I must admit that I have found that a lot of the HPC people are very risk adverse, in fact overly so. Perhaps this is why many of them miss financial opportunities and then grumble of forums about their lack of 'luck', when in fact they should be addressing their lack of confidence?

I have just found myself nodding in agreement to your post, which is a strange sensation. Risk adverse, if the human race were the as risk adverse as some in here, we would still be in our caves(rented of course) hunting for bears with spears.

Dithering_Dad

carolt wrote: »

Quite. We all remember the very vocal mse'ers - now sadly no longer posting let alone vocal - who suggested a year ago that prices would never fall! Just because lots of people believed property prices could only go up didn't make it right.

A minority of posters at that time - and yes, I was one - believed prices would fall. I still think that.

Maybe I'll be proved wrong this time. But I doubt it. Time will tell.

But I wasn't one of them. I am actually in favour of lower house prices and generally support what most people (including yourself) have said about the lunacy of HPI. However, I think that if people start deluding themselves about 50% drops then they will miss out again and we all wouldn't want that. I'm hoping that I'm just helping to provide a balance in the HPC debate?

GDB2222

Dithering_Dad wrote: »

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%, <SNIP>
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...

I think that most people are aware of that point DD, but it makes so little difference to the general argument that it's not worth worrying about. (Have to change your name to Pedantic Dad?) Agreed: 1% a month falls for 12 months translate into an annual fall of 11.4%, not 12%. Let's move on.

PayDay

mr.broderick wrote: »

I am going to say this only once. Now is the time to break from the herd. I will remind the members of this comment in 12 months time. (Just got my new diary and put entry in for Oct 14th 2009, remind mse how great i am)

Not the works diary I hope old chap? Remember there is a recession coming and you may not be working there in October 2009.:D

carolt

Dithering_Dad wrote: »

But I wasn't one of them. I am actually in favour of lower house prices and generally support what most people (including yourself) have said about the lunacy of HPI. However, I think that if people start deluding themselves about 50% drops then they will miss out again and we all wouldn't want that. I'm hoping that I'm just helping to provide a balance in the HPC debate?

I think you genuinely believe that.

But given that other current thread shows 40% drops, why is 50% so ludicrous?

Not saying it will definitely happen - but it seems quite plausible. Lots of people claimed house prices wouldn't fall at all - and now we're seeing the biggest annualised falls on record.

Never say never.

All we need is another 2 or 3 years like we've had, which as recession and unemployment kicks in, seems quite feasible - and there are your falls.

andys15

carolt wrote: »

Quite. We all remember the very vocal mse'ers - now sadly no longer posting let alone vocal - who suggested a year ago that prices would never fall! Just because lots of people believed property prices could only go up didn't make it right.

A minority of posters at that time - and yes, I was one - believed prices would fall. I still think that.

Maybe I'll be proved wrong this time. But I doubt it. Time will tell.

Oh Carolt, its not that all the ones being vocal last year are no longing posting, they have all changed there ID and now jump on the house price crash bandwagon. Its the same situation in how they choose which football team they support. Everybody likes being right, and if they say something which they know everyone will want to hear, and they get there thanks, they are happy.

neverdespairgirl

Dithering_Dad wrote: »

I don't want to generalise too much but I must admit that I have found that a lot of the HPC people are very risk adverse, in fact overly so. Perhaps this is why many of them miss financial opportunities and then grumble of forums about their lack of 'luck', when in fact they should be addressing their lack of confidence?

I don't know if I qualify as one of the HPC crowd?

Assuming I do, I am pretty risk-adverse. I don't think, however, that it's a lack of confidence.

I just don't want to be worrying about money. Being careful with what we spend, etc, means that money isn't something I need to lose sleep over, and that's a priority for me.