Wake up...... IT'S OVER

davidb881

mp2 wrote: »

no, it doesnt have to be no lending, just normal lending. normal lending = normal house prices.

if the average person wanted to borrow £50,000 for a house today banks would be happy to lend. if the average person wants to borrow £200,000 for a house banks are reluctant to lend.

do you see what the variable is here? its not whether banks will lend but how much.

the how much part is affected by either earnings or house prices. were not earning a whole lot more as a nation, the only thing that must happen is that prices must come down. to "normal" levels. ie 3.5 times earnings.

I agree, it would be fantastic.
If only a normal amount of houses had been built in the last 20 years then demand would not have out stripped supply.
You see… We can not go back. You are suggesting 10 years of growth be wiped of the property market. Millions and millions would be in negative equity. It will not be allowed to happen. It would completely destroy our economy.

mp2

davidb881 wrote: »

I agree, it would be fantastic.
If only a normal amount of houses had been built in the last 20 years then demand would not have out stripped supply.
You see… We can not go back. You are suggesting 10 years of growth be wiped of the property market. Millions and millions would be in negative equity. It will not be allowed to happen. It would completely destroy our economy.

we dont get to choose. the market is what it is. in japan house prices have fallen for 18 years in a row after their housing bubble in 1991. interest rates in japan have been at zero for almost 2 decades. it makes no difference. has the amount of land in japan gone up? has their population gone down?

the housing market was a bubble which has now gone. all the mortgage products created that drove the bubble i.e mortgage backed securities, cdo's are all gone. no one is making them anymore.

the companies that did make them - lehman brothers, bear stearns, morgan stanley, jp morgan, goldman sachs are all gone gone gone, (bankrupt)

what we have left is no more loose lending, only normal lending. all resulting in normal house prices.

we still havent reached that "normal" point i.e equilibrium (which in real terms should be a national average of around 90k) but that is where it is heading. nothing can stop that now.

mr.broderick

PasturesNew wrote: »

At the moment, cash buyers are finding their savings aren't generating an income and a lot decided "s0d it, we'll buy a house then, save all this rent money".

But it's a bulltrap.

When the market runs out of these cash buyers (soon) ... what then?

I will leave and i will take mewbie,cleaver and sockpuppet with me. You all then will be sad.

davidb881

mp2 wrote: »

we dont get to choose. the market is what it is. in japan house prices have fallen for 18 years in a row after their housing bubble in 1991. interest rates in japan have been at zero for almost 2 decades. its makes no difference. has the amount of land i japan gone up? has their population gone down?

the housing market was a bubble which has nwo gone. all the mortage products created to support the bubble i.e mortgage backed securities, cdo's are all gone. no one is making them anymore.

the companies that made them - lehman brothers, bear stearns, morgan stanley, jp morgan, goldman sachs are all gone gone gone, (bankrupt)

what we have left is no more loose lending, only normal lending. all resulting in normal house prices.

we still havent reached that "normal" point i.e equilibrium but that is where it is heading. nothing can stop that now.

OK. I am listening. How much? How Long?

If I am selling and trying to buy now, does it matter to me? Should I sell and rent?

davidb881

davidb881 wrote: »

OK. I am listening. How much? How Long?

If I am selling and trying to buy now, does it matter to me? Should I sell and rent?

O.. and by the way. if you do not have debt. you can still get 5 times earnings.

mp2

davidb881 wrote: »

O.. and by the way. if you do not have debt. you can still get 5 times earnings.

thats the thing. you can, but if the average man on the street cant then it doesnt matter, average prices must still drop.

average house prices today are 147k (down from 197k at the peak in just 12 months). in real terms average house prices should be around 90k. when it reaches this point you can roughly say prices are normal.
it could still undershoot this equilibrium if we are in a deep recession but thats what you would call normal.

now if youre buying a house and you want a realistic price of individual house prices the best measure is based against historical prices.

i.e when house prices reach 1999-2000 levels thats probably around normal prices, so have a look at houseprices.co.uk and see what prices the house you want was fetching in 1999-2000 to see its true value.

baileysbattlebus

davidb881 wrote: »

I agree, it would be fantastic.
If only a normal amount of houses had been built in the last 20 years then demand would not have out stripped supply.
You see… We can not go back. You are suggesting 10 years of growth be wiped of the property market. Millions and millions would be in negative equity. It will not be allowed to happen. It would completely destroy our economy.

There's no stopping it.
It has happened before - in the last crash our lost house lost nearly 40% of it's perceived value. At the bottom of the crash our house was worth what we paid for it 7 years previously.

Millions were in negative equity, thousands got repossessed, but it didn't destroy the ecomony.

For those in negative equity if they couldn't raise the money to pay off the shortfall they stayed where they were until prices caught up with their mortgage, which they did eventually.

First time buyers were able miss out the first phase of housing - around here it was 1 bed flats and go for something bigger.

And yes, houses have started selling here too, I don't know what they are going for though. Quite a lot of sold signs around - but the spring is historically a good time for selling property. I know it's not quite spring yet.

A housing market crash will not be the end of life as we know it. Other things could be, but not the housing market.

gauly

davidb881 wrote: »

What’s going on? The stress I am going through it unbearable. Anyone with an opinion tells you it’s a buyers market. That’s rubbish, if more people could get a mortgage there would be a stampede.
The media have done it again. I am afraid a massive over reaction has taken place and too much has been wiped of the market. I can tell you for a fact that investors are lapping it up. O joy, the rich getting richer.

I've noticed the same thing too. I'm thinking of moving so I picked out a dozen houses that might be of interest to show my OH. A week later over half say "Under offer" or "Sold subject to contract"!! The thing is, as you say "if more people could get a mortgage there would be a stampede", but they can't can they? There is no more money than there was last month so I suspect most of these properties will reappear in a few weeks time when people find they can't get a mortgage. It's still weird though.

Ron2256

davidb881 wrote: »

O.. and by the way. if you do not have debt. you can still get 5 times earnings.

Yes you can. And that's a brilliant idea, especially at a time when interest rate is at an all time low.
I suggest you head to the bank on monday and get a huge mortgage, preferably interest only of course and a loan on top to buy a new car + new furniture.

mewbie_2

davidb881 wrote: »

OK. I am listening. How much? How Long?

If I am selling and trying to buy now, does it matter to me? Should I sell and rent?

Not sure how to put this without sounding a bit rude. Um. I don't give a stuff what you do mate.