Prices to bounce back ... in 2023

Realy

carolt wrote: »

As GDB2222 states, if house prices were allowed to return to real 2007 prices, we'd be facing the same financial Armageddon all over again. The article is clearly claiming there will be a return to nominal 2007 prices by 2023, following a sharp drop.

And who says wages are going to rise at 5% per annum in a recession? Look at today's unemployment figures for a clue.

So what do you do, realy, that makes you such an "expert"? I'd really love to know.

:rotfl: Can you point out the bit were it says a nominal return by 2023 as I can't see it?
But here is the bit in the article about wages.
"However, he also sees greater affordability, with the ratio of average house prices to average earnings declining as property prices fall, assuming that earnings rise at an average nominal rate of 5% a year. "
Just belive the bits you want Carol.:rotfl:
They could use a compleatly different HPI figure compared to wage inflation but it is still clearly adjusted figures as it mentions wage inflation!
PM me if you wan't to learn a bit more on accounting and reporting and how to adjust figures for inflation.;)

carolt

No, the article says "assuming that earnings rise at an average nominal rate of 5% a year". He isn't prophesying they will. Obviously, if wages rise less, then it will take even longer to get back to the 2007 nominal figure.

realy's point is still nonsense, whether they rise at 5% or not. It's just even greater nonsense if they don't.

carolt

So let's get this straight, realy - you genuinely believe we're going to see a return to real prices like 2007 again?

:rotfl::rotfl::rotfl::rotfl::rotfl:

I hope you use your great knowledge to stock up on lots of property then - you're going to make a killing, clearly!

And what is it you do again, then? Don't be shy. We'd love to know the source of your superior knowledge.

Realy

carolt wrote: »

No, the article says "assuming that earnings rise at an average nominal rate of 5% a year". He isn't prophesying they will. Obviously, if wages rise less, then it will take even longer to get back to the 2007 nominal figure.

realy's point is still nonsense, whether they rise at 5% or not. It's just even greater nonsense if they don't.

Oh so the article is correct just not that bit.:rotfl:
If they cant guess inflation, I don't fancy thier chances on house prices.:D

carolt

You're still missing the main point - the 2023 figure has to be nominal rather than real, or you're suggesting we're going to be back at the peak of another equally ludicrous bubble in 15 years time.

Please show me where exactly the article states the 2023 figures are based on real and not nominal figures.

I can't believe I'm even arguing this. Do you think bubbles like this come along every 15 years?

In Greenspan's own words - it's a once a century event.



Oh - and what is it you do again?

Realy

carolt wrote: »

So let's get this straight, realy - you genuinely believe we're going to see a return to real prices like 2007 again?

:rotfl::rotfl::rotfl::rotfl::rotfl:

I hope you use your great knowledge to stock up on lots of property then - you're going to make a killing, clearly!

And what is it you do again, then? Don't be shy. We'd love to know the source of your superior knowledge.

Carol different things inflate differently and they would have to use an inflationary figure to calculate things.
Try this
http://www.measuringworth.com/ukcompare/
You may then understand better.

But as you see in Zimbabwe something could go up 200% but if wage inflation is 2000% it as gone down in value in real terms.

I would try to explain it in more depth but you have your HPC filter on.:D .

Believe me carol I could add more laughing as you are making a bit of a fool of yourself on this.
Without the figures you don't know what they have done but they have accounted for some inflation as it clearly states as I say now for the 3rd time.

Dithering_Dad

Couple of points...

1. Carolt, why post a thread on a discussion forum and then mock anyone who disagrees with your point of view? You must have the MSE record for the useage of the :rotfl: smilie. If you are not interested in other people's views (unless they mirror yours) then don't post in a public frum, just PM like-minded people such as !!!!!!.

2. These 'experts' couldn't even predict the credit crunch occurring a few months before it happened, how come they can now predict what will be happening several decades away?

stevetodd

carolt wrote: »

You're still missing the main point - the 2023 figure has to be nominal rather than real, or you're suggesting we're going to be back at the peak of another equally ludicrous bubble in 15 years time.

Please show me where exactly the article states the 2023 figures are based on real and not nominal figures.

I can't believe I'm even arguing this. Do you think bubbles like this come along every 15 years?

In Greenspan's own words - it's a once a century event.



Oh - and what is it you do again?

What does what he does have to do with anything?

I think the point you are missing is that the article is ridicleous, even the most sensible bit:

"However, specialists giving evidence at a Treasury select committee yesterday gave a less gloomy outlook than that painted by Clare. David Miles, professor of finance at Imperial College London, told MPs that house prices would stabilise after a further 5-10% drop. He said a total 20% drop in prices should be the point at which the housing market rejuvenates"

Is probably wrong as this seems not severe enough IMO

Realy

carolt wrote: »

You're still missing the main point - the 2023 figure has to be nominal rather than real, or you're suggesting we're going to be back at the peak of another equally ludicrous bubble in 15 years time.

Please show me where exactly the article states the 2023 figures are based on real and not nominal figures.

Carol I asked you first where it says nominal? Are you now in politics?

I take it as adjusted figures as they use wage inflation in there calculations otherwise why mention wage inflation?


Think back to when you were a child and what you could buy with a penny farthing.:D It may help you see the light.
I will help you.

If my company turned over £1M this year
And I forcast that next year we would do £1.05M.
I forcast inflation to be 5%
Would my directors see that as a 5% increase in turnover over last year given inflation?
But a lot more variables would have to be taken in to account at the end of that year to work out if it was an inflationary increase or decrease over the last year because energy may of shot up 20% but the COGS may of decreased by 10% etc.

ad9898_3

I have no real idea when prices would get back to that level, however what I do think and it makes me shudder a little is this.. If the recession is shortish (say 1-2 years) and the banks feel confident again that their balance sheets are healthy, if they started lending 5x,6x,7x salaries again with 100% mortgages, many, many people would take them up, stupid, yes.... riduculous, certainly..... but don't over-estimate the intelligence of herd mentality.... its generally very low with extremely short memories.

This whole sorry affair could return by 2012