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

sabretoothtigger

The graphs at the start of this thread apply to more speculative markets then housing. BTL maybe

People have to live somewhere and unlike the usa people here cannot easily walk away from their debt so I do think those charts apply to stocks and other more liquid but less practical investments then the place that keeps the rain off your head

Capitulation makes sense if people lose their job and also over paid for the house in the first place, does that constitute a large enough part of the market to apply speculative sentiment predictions in general

Here is a decent article discussing sentiment vs risk and rewarding investments

One reliable sentiment indicator, the weekly survey of the American Association of Individual Investors, had by far the highest “bearish” reading yet, with 70 per cent of respondents describing themselves as bearish.

Even in the immediate weeks after the collapse of Lehman Brothers, six months ago, this figure peaked at 61 per cent.

Meanwhile, “good” news is ignored. Commodity prices are rising, which might imply an early revival in economic activity. Oil was up 50 per cent from its December low at one point yesterday. Yet no one is seizing on this as an excuse to be optimistic about shares.

Extreme negativity does not mean that the market is about to bounce. But it does suggest that the market is well into the “revulsion” phase, when it finds a bottom at which all the worst possible outcomes have been priced into shares.

If the world economy somehow outperforms that most gloomy prediction, it might then even be possible to make some money.

http://www.ft.com/cms/s/0/6027c8f6-0cd6-11de-a555-0000779fd2ac.html

RDB

[FONT=Verdana, Arial, Helvetica, sans-serif]from the fleet street news letter[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT]
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[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]TIMEBOMB #4: Steer clear of the housing market before it gets cut in half – and place a small portion of your capital in THIS instead...[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]We expect house prices to halve and take nigh on a decade doing it.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]I don’t say this to scare you. I’m deadly serious. From peak to bottom UK residential and commercial property could easily fall an eyewatering 50% before they even begin to recover.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Of course politicians, the media and house sellers like to talk down any idea that this could be on the cards. Why? Because that’s what people want to hear! When people’s houses are worth more they feel richer... they’re more likely to spend their money... and vote the “right way” in the polls. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]According to one of the UK’s leading estate agencies, Savills, house prices in the UK are set to recover and RISE by 2010... and the National Housing Federation agrees, saying the average house price will reach £274,700 over the next five years.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]But be warned. We're CONVINCED they are wrong! [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]The mainstream always love to be optimistic about house prices. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT]

Cleaver

RDB wrote: »

[FONT=Verdana, Arial, Helvetica, sans-serif]from the fleet street news letter[/FONT]




[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]TIMEBOMB #4: Steer clear of the housing market before it gets cut in half – and place a small portion of your capital in THIS instead...[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]We expect house prices to halve and take nigh on a decade doing it.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]I don’t say this to scare you. I’m deadly serious. From peak to bottom UK residential and commercial property could easily fall an eyewatering 50% before they even begin to recover.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Of course politicians, the media and house sellers like to talk down any idea that this could be on the cards. Why? Because that’s what people want to hear! When people’s houses are worth more they feel richer... they’re more likely to spend their money... and vote the “right way” in the polls. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]According to one of the UK’s leading estate agencies, Savills, house prices in the UK are set to recover and RISE by 2010... and the National Housing Federation agrees, saying the average house price will reach £274,700 over the next five years.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]But be warned. We're CONVINCED they are wrong! [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]The mainstream always love to be optimistic about house prices. [/FONT]

This is just from a spam website that want to you to subscribe to their newsletter for hundreds of pounds a year. It's just a scam. I'm all for debate on articles, but that's a bit lazy.

Actually, a bit from their small print is good:

[FONT=Verdana, Arial, Helvetica, sans-serif]The Fleet Street Letter is issued by Fleet Street Publications Ltd. Registered office 7th Floor, Sea Containers House, Upper Ground, London SE1 9JD.[/FONT]

You'd think that a company called Fleet Street Publications publicising a product called The Fleet Street Letter would have offices in... well, Fleet Street. Rather than in Southwark. Ah well.

dervish

RDB wrote: »

[FONT=Verdana, Arial, Helvetica, sans-serif]from the fleet street news letter[/FONT]




[FONT=Verdana, Arial, Helvetica, sans-serif][/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]TIMEBOMB #4: Steer clear of the housing market before it gets cut in half – and place a small portion of your capital in THIS instead...[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]We expect house prices to halve and take nigh on a decade doing it.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]I don’t say this to scare you. I’m deadly serious. From peak to bottom UK residential and commercial property could easily fall an eyewatering 50% before they even begin to recover.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Of course politicians, the media and house sellers like to talk down any idea that this could be on the cards. Why? Because that’s what people want to hear! When people’s houses are worth more they feel richer... they’re more likely to spend their money... and vote the “right way” in the polls. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]According to one of the UK’s leading estate agencies, Savills, house prices in the UK are set to recover and RISE by 2010... and the National Housing Federation agrees, saying the average house price will reach £274,700 over the next five years.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]But be warned. We're CONVINCED they are wrong! [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]The mainstream always love to be optimistic about house prices. [/FONT]

very astute, I would say.

sabretoothtigger

Devaluation by inflation over time is more likely then people in the majority wanting to move house all of sudden at any cost, isnt it too late to take the money and run? Better to sit and wait I'd assume (if I was a house owner which Im not)

The ironic thing is that its better to buy a bigger house when prices fall dramatically rather then downsize. I read its because the amount you lose on your own sale is less then the amount of increased value you gain in the bigger house

econo_2

Just a picture from an actual case rather than all the charts and daily sky falling in predictions. My mother has had her 'middle England' type house on the market for over a year. In that time she has had about 3 viewings. In the last 2 weeks she has had 7 and 2 offers, the last of which is only 10,000 shy of her revised asking price. This is exactly relative % wise to houses she has looked at which have also been revised down with the falls. So, she will have lost nothing.

She has spoken to a couple of people who have both said they are sick of the daily negativity, not waiting on the sidelines any longer and have lives to lead.

Something is obviously happening in regard people wanting to move and it's not all as the original post reports .

bubblesmoney

http://www.bloomberg.com/apps/news?pid=20601102&sid=aRC3cA7fthE0&refer=uk

U.K. Home Sales Slip to Record Low as Prices Decline, RICS Says

March 10 (Bloomberg)

dgl1001

I attended an interesting presentation yesterday by the governments planning and housing advisory committee, about housing demand and supply. In simple terms they said:

• we need to be building about 240k homes per annum just to redress the balance to make property more affordable for everyone, from now on
• We need need to be building closer to 300k dwelling per annum to redress the backlog from the last 10 years
• The lack of supply means that household formation will be delayed until people are older (meaning that people will live in cramped conditions
• we are on target to build about 100k dwellings this year with the lack of building adding to more pent up demand
• Its unlikely that we will be able to build anything like to volumes of housing we need to be doing in the future
• Governemt are every concerned that society will be divided between the wealthly home owners and the less well off non homeowners
• Shortage of open market housing will lead to longer council housing waiting lists - the demand for which cannot be met
• Despite the fall in house prices, properties are becoming less affordable (due to lack of finance) which is adding pressure to council waiting lists
• because of the lack of suitable housing and the current slump in building, they expect house prices to recover within 5 years. They made alot about this point, namely that this down turn in building is going to cause big problems a fews down the line

I thought it was interesting stuff. clearly with such a shortage of housing, property must be a good med to long term investment.

besonders1

Plenty of houses for sale just lack of fantastic offers.

bubblesmoney

dgl1001 wrote: »

I attended an interesting presentation yesterday by the governments planning and housing advisory committee, about housing demand and supply. In simple terms they said:

• we need to be building about 240k homes per annum just to redress the balance to make property more affordable for everyone, from now on
• We need need to be building closer to 300k dwelling per annum to redress the backlog from the last 10 years
• The lack of supply means that household formation will be delayed until people are older (meaning that people will live in cramped conditions
• we are on target to build about 100k dwellings this year with the lack of building adding to more pent up demand
• Its unlikely that we will be able to build anything like to volumes of housing we need to be doing in the future
• Governemt are every concerned that society will be divided between the wealthly home owners and the less well off non homeowners
• Shortage of open market housing will lead to longer council housing waiting lists - the demand for which cannot be met
• Despite the fall in house prices, properties are becoming less affordable (due to lack of finance) which is adding pressure to council waiting lists
• because of the lack of suitable housing and the current slump in building, they expect house prices to recover within 5 years. They made alot about this point, namely that this down turn in building is going to cause big problems a fews down the line

I thought it was interesting stuff. clearly with such a shortage of housing, property must be a good med to long term investment.

shortage?
i wonder why a million flats / houses are empty.
i cant understand this business of the right hand trying to prop up the property prices while the left hand is cribbing about needing more affordable housing.