Get ready for Capitulation....Fear is here, people will start to accept lower prices

mbga9pgf

whathavewedone wrote: »

Yes I know this is different, much worse, yada, yada but it will come and go like all the others.

Want to comment on market controls of HPI in that analysis?

whathavewedone

You are right Stevetodd. In 1997 my boyfriend at the time was buying his first flat. Prices had only really started to go up but he was terrified that he was buying at the top of the market. I remember him saying that he didn't care about making money but he didn't want to end up in negative equity.

Similarly in 2000 people were telling me to buy and I said I was waiting for a hpc. People said I'd be waiting a long time and they were right. I bought in 2003 in the end which was fine but it would have been better if I had bought in 2000.

The thing is when things are/have been on a downward spiral the majority of people expect that trend to continue indefinitely or at the very least worry that it might.

The opposite is true when things are and have been on an upward spiral for a while.

You can't ridicule people who said that house prices would only ever go up on the one hand and say that house prices will never go up again in real terms on the other.

The economy always goes in cycles. We have had an inordinately large boom followed by a very nasty bust. That doesn't mean we won't see smaller booms and busts in our lifetimes. I'm 38 and I expect to see at least one more boom and bust. So long as I stay of the fags that is...

stevetodd

mbga9pgf wrote: »

Sorry steve, I need to make myself clear. In the medium term they are only going one way. I am expecting a recovery, of course I recognise the market is cyclical. I dont think they will peak again even at today's inflation adjusted prices, or at least not for another 20+ years. I think we are only approaching what I term as neutral affordability, IE not expensive, not cheap. Once market controls are introduced, I reckon we will see far fewer years that hpi outstrips wage inflation. Certainly whilst the banks are trying to pay back their dues to government they wont be excessively lending, and as we know, without excessive lending, we wont have excessive HPI.:T

It might suprise you that I agree that it is unlikley prices will hit 2007 levels again when factoring in inflation, as I believe lenders will not lend the salary multipliers that they previously did for a very long time.

Although now that CGT is now only 18% so they don't have to actually reach the 2007 level to be in the same position or perhaps in an even stronger position

mbga9pgf

Whathave... It will go up. I didnt say that it wouldnt.I said the real peak would never be reached again, certainly not in my lifetime. The question is, do you see this as a bad thing? If I buy a house, dont make a penny from it, I wouldnt care two hoots. This has more to do with getting the house that other generations have had the benefit of being able to enjoy. Nothing more, nothing less.

stevetodd

fatpig wrote: »

You're too pessimistic. I think a 25-30% plunge by Xmas is far more likely.

Could we bet on this? we could ask Martin to hold the stakes, I would trust him would you? I am happy to bet that they will not reach the lower (25%) level of your range by xmas.

Martin if you ae readiing this would you do it? If so I would be happy to donate 10% of wnnings to a charity of your choice.

How much would you be willing to bet?

whathavewedone

Okay I've just seen your last two posts.

I agree that due to the size of the last boom and consequent bust that we are not likely to see a boom of noughties proportions for a very long time - nor should we, quite frankly.

Nevertheless I do think we will see a boom of some sort within the next 20 years - in fact my money would be on the next bust happening around then - purely on the basis that historically the economy works on 18 year cycles.

In terms of house prices there will be an undershoot and this will attract investors as well as ftbs to the market. I don't think the general population will learn many lessons.

stevetodd

whathavewedone wrote: »

Okay I've just seen your last two posts.

I agree that due to the size of the last boom and consequent bust that we are not likely to see a boom of noughties proportions for a very long time - nor should we, quite frankly.

Nevertheless I do think we will see a boom of some sort within the next 20 years - in fact my money would be on the next bust happening around then - purely on the basis that historically the economy works on 18 year cycles.

In terms of house prices there will be an undershoot and this will attract investors as well as ftbs to the market. I don't think the general population will learn many lessons.

Hey please stop saying things like this or people will think you are my sockpuppet as its more or less exactly what I think too

besonders1

I couldn't see house prices returning to 2007 levels otherwise there would be too many repossessions. I do agree that once we hit the bottom (I suspect this may be a mid way position such early 2000 prices), they will stay low at this level for a few years then rise back up to 2004 levels again and then drop in cycles. I could also see less choice for the next 6 months or so until "fed up" decide to cut their loses and just sell up anyway.

thriftybabe

mbga9pgf wrote: »

Some of the largest bulls on record are capitulating, not only on here, but over on sites like singingpig and globalhousepricecrash.com. The reality that the property excesses of the past 10 years, more likely 20 years are long gone will hit market prices like a sledgehammer.

It wont be long before sellers realize this recession (depression) is here for a very, very long time and prices will NEVER fully recover to the excesses of peak 2007. We are about to see some of the biggest falls of the crash over the next few months, as a result of people 'getting real' as they are starting to on the stock market, fear takes over and the race starts to the bottom. All those that really want to sell but took their houses off the market waiting for the 'recovery' will be back, volumes increasing massively will be the first step.

Owners will not completely luck out however. Falling capital values will allow them to jump 2 or more rungs up from where they could, further inspiring them to drop prices further, as large deposits are a must. Without a sale, they arent going anywhere. The only people who will luck out will be those old fuddy duddies waiting to die and are expecting First time buyers to fund their retirement. They are going to be massively dissapointed.

I reckon we will be another 20% down by next christmas. Wait and see! :rotfl:

:T:T:T

Have seen it on my own street. Owner said September last year that they would not accept anything under £420k. Now on offers over £360k!

StevieJ

dervish wrote: »

incisive analysis, I agree.

Hey mbga9pgf, Dervish agrees with you :eek: My money is Steve now