2004...My Ar*e....Make Your Predictions...

Kez100

All I know is that we had a valuation in March 2002 and I thought 'no way'. Our house can't be worth that, no one could afford it.

I've no reason to think wages have changed that much in the last 6 years. So, I will plump for 2002. Or, in our case a 30-40% reduction.

So long as some sort of lending returns I cannot see it being much, much earlier. We bought in - essentially - 1995. It was the housing doldrums and it took a few years before prices went anywhere. Homes were affordable in the doldrums and that was on 1995 wage levels and significantly higher interest rates. Unemployment was high in both scenarios.

Now we have Government help to avoid reposession and low interest rates.I do agree the ability to raise money is a big difference but time will tell if that eases as risk eases.

In most of this country renting can be a bit of a misery. Short term contracts, in particular. Never really knowing how long you have to stay somewhere. Most want a home if it is affordable and so there is a glut of FTBs waiting for when we get to the right levels. There will also be those sat on cash waiting in the wings to put their cash into something tangible.

2002 definitely for me. 30-40% (except for new build which will be higher)

mystic_trev

mitchaa wrote: »

Not backing down to peer pressure, i'm glad to be different and will shout all day and night about my beliefs.

1 against 100, i really dont care. When this 1 turns out to be correct, and you 100 turn out to be wrong, i'll just sit here with a smug little grin:D

I can see the irony here. I'm the longest posting bear here. When I started banging on about over priced Property it was me (and a couple of others) against the Bulls. We were derided as Nutjobs, Loonies and just plain idiots.:rotfl: Prices will never go down,we were told, it's differents this time, it's a new paradigm. Lack of housing, supply and demand - it was all trotted out!

Now where are we? Stuck in the worst recession any of us have seen - and I've seen quite a few :rolleyes: The whole of the Banking system nearly collapsing, unemployment heading for nearly 3m and predicted repo's 75,000 this year - I expect it to be higher due to the amount of overgeared BTL punters going bust.

Well this looney quite expects to see prices undershooting the 'trend' and by quite a lot.

stephen163

mitchaa wrote: »

The latest Halifax figures achieved widespread media attention last week, primarily due to the headline ''fact'' that house prices were back at 2004 levels:rolleyes:

Look at REAL house prices not nominal. Then you will see we are already back at 2004 Q1 levels and the prospect of going back to early 2003 and even 2002 doesn't look so ridiculous. The long term trend shown in that famous picture is now set at 2003 Q2 levels and let's face it, who would bet against real prices falling below this trend in the coming months/years?

I guess you have to assume that given 33 years of data, the long term trend will remain constant or only change by small amounts.

Mary_Hartnell

There is still further to fall in real terms BUT I am afraid of galloping inflation as the GBP turns into a third world type currency.

We are probably at the stage where HALF the GDP of the country goes in one door of the government before coming out of another door to buy votes. I do not believe that the hands between the two doors have really woken up to the state of the real economy; probably too busy counting the days until their inflation proof pension.

I don't expect a big slicer of fellow moneysavers to agree, as directly or indirectly you are part of the government gravy train.

adr0ck

around £145K but may overshoot a bit to say £135K

thats my guesstimate

abaxas

Using that zoolpa thing (which is wildly inaccurate)

House next to me....

Last sale: £210,000 Sale date: 29th Jul 2005
Zoopla! Estimate £212,870

I beleive that zoopla thingy uses LR data, so is hence up to 6 months behind and does not include forced sales, repos or auction properties

mitchaa

mystic_trev wrote: »

Now where are we? Stuck in the worst recession any of us have seen - and I've seen quite a few :rolleyes: The whole of the Banking system nearly collapsing, unemployment heading for nearly 3m and predicted repo's 75,000 this year - I expect it to be higher due to the amount of overgeared BTL punters going bust.

.

Worst recession any of us have seen? Really??

Is anyone on here actually suffering? No, im being serious, anyone Where are the overwhelming numbers of homeless on the streets? Where are the mass lootings, increase in robberies, thefts, and overall crime rates? Where is the sheer anarchy that should be expected in such troublesome times?

If things were getting bad, the above would rocket 10fold.

All our commodities have plummeted, your fuel bill, your shopping bill and even your mortgage has went in your favour since this 'recession' started, so who is actually suffering here?

Unemployment at 3m, we are not even at 2m Unemplyment has risen from it's usual long term 1.65m upto 1.82m, an increase of only 170k, nationwide this is a minescule amount.

Is the media painting a picture? Yes, it is. Are people falling for it? Yes, they are.

Ask yourself, have you been affected by this world ending recession? I personally do not know of a single soul who has, and from being on here, it seems it is only a sheer minority.

Long live this recession i say, i really mean that, as personally ive never been so well off in my life. Secure job, decent income, and my expenditure is buying me twice what it was buying me 6mths ago.

Dithering_Dad

mitchaa wrote: »

Average house price of less than £77k, i'll have 3 or 4 then:p

Might buy them altogether, join them up and have a 15 bed mansion for under £300k:rotfl:

Out of interest, if house prices did fall that far... (not that they will, but humour me)

Where would you get the money from to buy 3 or 4 houses at £77k? (i.e. £77k x 4 = £308,000) ??

Kenny4315

I reckon prices at the moment are at 2009 level, next year they'll be at 2010 levels and so on. The world has moved on it is not the same of in previous years so there is no point in saying it has moved back to a previous year position, wages are different, debt levels are different, world economics are different, main falls by July/Aug total fall from peak between 30% and 35%

Laughing_man

mitchaa wrote: »

So according to the red trend line, house prices should be at around £145k in 2008. The red line will continue to rise in 2009, 2010 etc so there will be that familiar undershoot when prices bottom at £140k

2010 the red line will be showing £160k or thereabouts, houses will be at £140k. Undershoot will be evident as the graph progresses.

NEXT!!!

Trend will not rise during a period of falling prices, thats not how it is calculated. Its a function of price rises over the whole sample, so big rises drag the line up and falls drag the line down- As you can see it doesn't correlate that well with actual prices anywhere on the graph and at the moment is still badly skewed by the recent boom.

Laughingman...If you have read any of my previous postings i have explained myself thoroughly as to why we will not stay at the bottom for long. How many 32yr old doctors do you know still living at home with their parents? Seems to be quite normal in todays age, was it normal back in the crash of the 90's?

What about our attitude towards housing and the greed culture that we now live in? BTL investments and property development have increased 10 fold over the last 15yrs or so. There are people itching to buy, we are in a culture where owning our homes is seen as a must. As soon as the bottom has been realised, what do you think will happen? People will flood the market and prices will begin to rise, it will be much quicker this time. Expect 2007 house prices back again in late 2011.

No I haven't read any of your posts, I am familiar with the idea of pent up demand and a supply shortage in u.k housing.

The simple fact is that the lending which underpinned this demand basically destroyed the banking system. This lending is not coming back anytime soon and without it there simply won't be demand enough to support prices at anywhere near 2007 levels. I am skeptical about a supply shortage too, as it should really have been in reflected in rising rents as well as sale prices, but wasn't.

In fact you contradicted yourself: If a 32 y.o Dr. cannot afford to buy then prices are abnormally high, this argues that sustainable prices should be much lower- at a level where purchase can be funded from income and not gains made through HPI- and not that prices are set to increase parabolically into the distant future. Otherwise who are you going to sell your valuable house to?

BTL hasn't really worked out that well and effectively died last year when all the deals were withdrawn. Citing the boom time expansion of speculative property investment as a support during the crash is, well, just wrong. The lending and appetite for property risk will return in the future, but not until investors expect prices to rise again, which will only be after they have stoppped falling. In other words this demand only pushes on the way up and evaporates completely in the downturn. Eventually bottom feeders get good returns which attracts new entrants which pushes up demand and prices.

This is why previous examples of price booms and busts form long shallow bowls punctuated by sharp peaks and not 'V' shaped valleys or a smooth line following trend. In order for you to get real prices back to '07 by '11 there would have to be some dramatic fundamental change in the housing market or wider economy that just isn't materialising.