Property prices will have stabilised by this time next year. Yes or NO?

monkeymaster

Generali wrote: »

I think it depends whether you're talking real or nominal house prices.

I think nominal house prices last fell on average across the US in the 1930s.

Local markets will behave differently. The 'US housing market' is a bit like talking about 'the European housing market'. It makes much more sense at a lower level although the whole can tell you something.

I can't see the point of quoting anything other than inflation adjusted prices as nominal prices are pretty much meaningless.

Year 1: House costs 100k, average salary is 20k, loaf of bread costs 50p
Year 2: House costs 101k, average salary is 100k, loaf of bread costs a fiver

But house prices have gone up by 1k!! I'm sure the Daily Express would still use that as their headline though

setmefree2

Statistics, statistics. The point I was trying to make was that in the US there was no real reason to assume prices would fall anything like as far as they have as it had never happened to them.

In the UK we had experienced massive price falls in the early 1990's so we all knew they could - would fall again.

I'm only trying to explain what happened. I have no particular point to make. It's pointless saying there was massive house price falls in the US in the early 1990's and "they should have known better" when that is patently not true.




P.S Thanks Generali, you saved me time looking for a graph, but if I find the one I was looking at, I'll be back ;-)

Dan:_4

Prices will be stable this time next year. We will have very low interest rates and some great mortgage deals available as banks start to compete for business again. FTB's would have had ample time to save a nice depoist and will flood the market in an attempt to pick up a bargain. Investors will also be back, I know of 3 landlords, with hard cash, waiting in the wings to grab a bargain in the next few months. As interest rates decrease, confidence will slowly return, already started infact. If I was planning to buy, I would start hunting out a baragin now. The only advice I can offer anyone at this stage is don't get greedy by waiting to long...

monkeymaster

setmefree2 wrote: »

Statistics, statistics. The point I was trying to make was that in the US there was no real reason to assume prices would fall anything like as far as they have as it had never happened to them.

In the UK we had experienced massive price falls in the early 1990's so we all knew they could - would fall again.

I'm only trying to explain what happened. I have no particular point to make. It's pointless saying there was massive price falls in the US in the 1990's and they should have known better when that is patently not true.

You can see the huge bubble developing from the late 90's though - surely that's good reason to assume that in the context of historical prices in the US, something wasn't quite right.

http://books.google.co.uk/books?id=BxEW4_v8qdkC&pg=PA57&lpg=PA57&dq=us+real+house+price+index&source=web&ots=RDWmZ3YQ-j&sig=LrBTNrSHKjtIUmAWBfDun8UjTdg&hl=en&sa=X&oi=book_result&resnum=4&ct=result

"In real terms home prices in 2005 were 67% above their 1950-1995 average"

I was just pointing out that in fact there have been falls - around 10% in the US in the early 90's, not as impressive as ours I'll grant you

monkeymaster

Dan: wrote: »

Prices will be stable this time next year. We will have very low interest rates and some great mortgage deals available as banks start to compete for business again. FTB's would have had ample time to save a nice depoist and will flood the market in an attempt to pick up a bargain. Investors will also be back, I know of 3 landlords, with hard cash, waiting in the wings to grab a bargain in the next few months. As interest rates decrease, confidence will slowly return, already started infact. If I was planning to buy, I would start hunting out a baragin now. The only advice I can offer anyone at this stage is don't get greedy by waiting to long...

You're deluded. One of the biggest asset bubbles in history, an unprecedented financial crisis with banks being bailed out left, right and centre and you expect it to be over in the blink of an eye. We're going to be living with the consequences of this for years. Our (and other countries) public borrowing has ballooned - all this debt has got to be paid back at some point and that will be in the form of higher taxes. So even if things don't get any worse (which is no given) then we're still yet to really see what has happened feed through into the real economy - we're only just going into recession! Unemployment and reposessions will be on the increase for the forseeable future and that will in turn put further downward pressure on house prices.

As for interest rates, yes they are falling but mortgage rates aren't so it's going to make no difference to confidence - what will make a difference is unemployment, reposessions and continued falling house prices being reported in the media. In the US where interest rates are now 1% mortgage rates have hardly moved.

setmefree2

Monkeymaster be gentle with him - you need to brush up on your "bedside manner" old bean;)

mewbie_2

monkeymaster wrote: »

sensible stuff

I thanked you, but am a bit annoyed because you are crashing my Obama high with this doom and gloom stuff. I was enjoying feeling positive with thoughts of hope and change, and perhaps things not being quite so bad after all.

WTF?_2

Dan: wrote: »

Prices will be stable this time next year. We will have very low interest rates and some great mortgage deals available as banks start to compete for business again. FTB's would have had ample time to save a nice depoist and will flood the market in an attempt to pick up a bargain. Investors will also be back, I know of 3 landlords, with hard cash, waiting in the wings to grab a bargain in the next few months. As interest rates decrease, confidence will slowly return, already started infact. If I was planning to buy, I would start hunting out a baragin now. The only advice I can offer anyone at this stage is don't get greedy by waiting to long...

God loves an optimist :money:

Dan:_4

I will accept your apologies in 12 months time.

StevieJ

Dan: wrote: »

I will accept your apologies in 12 months time.

You wont get any.