Doom & Gloom

Trollfever

When "Green Shoots" start appearing in the Californian economy my gloom will start lifting.

But............................
things just go from bad to worse in the USA economy!


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dgl1001

Dans right on this one - people have got a vested interest and will try to convince everyone else to justify their position. Don't know what house prices will do but i do know of a house builder who will be increasing prices next month by 2% - so can't all be bad then

ad9898_3

mizzbiz wrote: »

The boom meant that FTB's could only afford 1 bedroom flats, so in fact, I think that the opposite view to your argument will be the case :-)

Absolutey correct, as I've said before my sisters were very young when they bought (one was a teenager) in the late '70's early '80's all bought 3 bed semis. This rubbish about FTB'rs shouldn't set their sights on anything above a 1 or 2 bed flat is ridiculous, and only pedaled since the start of this boom, if you are on the average wage you should be able to afford an average house. It's not rocket science.

To put some perspective on it, I was on 10k in '96 and still managed to buy a nice 2 bed semi, with a front and back garden , a drive and a garage in a nice area, for 36k. I wasn't even on anywhere near the average wage then. Where is the progress ?

ukcarper

I also think the fall in house prices is not a bad thing even though it will cost me money. House prices are obviously governed by the amount of money people can borrow and when banks started to lend people in excess of 6 times their salary all they actually achieved was to push house prices up to a unsustainable level. I am not defending rampant house price inflation and agree it will be much better when house prices reach a more sustainable level.

skap7309

dgl1001 wrote: »

Don't know what house prices will do but i do know of a house builder who will be increasing prices next month by 2% - so can't all be bad then

Halifax reports a 1.9% rise in HP then this builder raises by 2%. What a surprise. I can guarantee they did not follow the falls MoM? :rolleyes:

It is famously called the 'bull trap'. Look it up for more details.

Max_Headroom_3

ukcarper wrote: »

I hope all the doom and gloom mercahnts here are willing to live it a one bedroom flat for the rest of their lives because if house prices crash to the extreme they are wishing for no one will move unless they really have to and no new houses will be built.

Erm, I'm predicting (and have for some time) pretty serious price drops (not 80% but then I've not seen anyone else predict this). And I live in a three bedroomed house with no mortgage.

It's not all about "vested interests" and wishing/predicting what people want. It makes not a jot of difference to me if my house value halves or doubles.

What it is about is taking a common sense view. Recent (last years) house prices were completely unsustainable and based on lending that could not be supported (witness banks falling over, Northern Rock the best example).

They have to and will drop because Joe Public cannot afford the finance needed at the levels that were reached.

Furthermore, those levels were reached purely based on purchasers and lenders belief that prices would keep rising. That sentiment has been removed.

Welcome back to reality.

chucky

Max_Headroom wrote: »

Erm, I'm predicting (and have for some time) pretty serious price drops (not 80% but then I've not seen anyone else predict this). And I live in a three bedroomed house with no mortgage.

but there are lot's predicting 70%

and i agree with the rest of your post

Dan:_4

chucky wrote: »

but there are lot's predicting 70%

and i agree with the rest of your post

Yes. They call themselves the 70% Club. I call them nutters.

Thrugelmir

ukcarper wrote: »

I hope all the doom and gloom mercahnts here are willing to live it a one bedroom flat for the rest of their lives because if house prices crash to the extreme they are wishing for no one will move unless they really have to and no new houses will be built.
Of course this won't happen house prices will continue to fall but not to the extreme some people on here seem to be hopling for.

You need to choose words carefully. As doom suggests a state or feeling of total impending ruin and destruction. Which is patently untrue about the housing market. Unlike say spending money on holidays which is disrectionary. Housing is a requirement in one form or another for the entire population. House prices will determined by market forces.

Personally I have been affected negatively by the rising and then crashing housing market. As I had little choice to move when I did ( to a more expensive area) which has resulted in a fair chunk of my accumalated wealth disappearing now down the drain.

ukcarper

House peak £215,000 less 70% = £64,500 this is the same house I bought for £8,000 in 1972 when you had to put down a least 10% and were lucky to get 4x main income. Average income now I think is around about £28,000 therefore if we were in the same prudent days as 1972 which I think we should be the house would need to be 28k x 4 + 10% deposit approx. £124,000 drop of approx. 42%. This house is a 3 bed terrace.