Here's what the experts say - further falls in house prices of 10-65% to come

carolt

http://www.telegraph.co.uk/finance/economics/houseprices/5033209/Do-not-pass-go---or-expect-house-prices-to-rise-soon.html

For anone interested, the up to 65% prediction was from Michael Saunders, chief UK economist, Citigroup.

Anyway, read and enjoy. Lots of good bear food there.

Wookster

I have to laugh when I read comments like this:

According to my calculations, house prices are now pretty much at fair value. If you look at the rental yield from UK property, it is equivalent to the price-earnings ratio for the equity market.

I now know which fund to avoid like the plague. This chap is clearly talking out of his backside.

carolt

To be fair, the same guy goes on to say he expects:

"a further 15pc fall from where we are now, albeit with a slower rate of decline than previously. So I would expect prices to fall until 2011."

So hardly bullish.

Kenny4315

So it looks like the experts are predicting ... a fall from peak of about 30 to 40%, so my 35% prediction is bang in the middle. Unless the government force down prices via regulation, which they won't given an election is round the corner.

'on most metrics house prices, which have fallen by around 20pc on most bases since peaking in late 2007, are now close to fair value. And yet every major economist expects prices to fall by a further 10pc or 20pc in the coming months'

Kenny4315

I like this bit the best ...

'You could argue that changes in demographics could prevent it, or immigration, or the ageing of the population,:beer: but :beer: :beer: :beer: none compelling enough to suggest there won't be another boom.' :beer: :beer: :beer:

Looks like buying again shortly as we get to the bottom will again reap so long term rewards.

blunt_crayon

this may sound really dim but can somebody explain the bear/bull analogy to me??

Reaper

EDIT: Ignore me. I was confusing AIG and Citigroup. Not even slightly alike.

penguine

blunt_crayon wrote: »

this may sound really dim but can somebody explain the bear/bull analogy to me??

It's a Wall Street term dating back to the 18th century. Apparently.

http://www.qwoter.com/college/Investing-Essentials/Bull_vs_Bear_Markets.html

Reaper

blunt_crayon wrote: »

this may sound really dim but can somebody explain the bear/bull analogy to me??

Bears expect the market to do down, bulls expect it to go up. The origins are not clear but here is what Wikipeda has to say on the subject:

The precise origin of the phrases "bull market" and "bear market" are obscure. The Oxford English Dictionary cites an 1891 use of the term "bull market".
The most common etymology points to London bearskin "jobbers" (market makers),I][URL="http://en.wikipedia.org/wiki/Wikipedia:Citation_needed"]citation needed[/URL][/I who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l'ours avant de l’avoir tu! ("don't sell the bearskin before you've killed the bear")—an admonition against over-optimism.I][URL="http://en.wikipedia.org/wiki/Wikipedia:Citation_needed"]citation needed[/URL][/I By the time of the South Sea Bubble of 1721, the bear was also associated with short selling; jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit.
Another plausible origin is from the word "bulla" which means bill, or contract. When a market is rising, holders of contracts for future delivery of a commodity see the value of their contract increase. However in a falling market, the counterparties—the "bearers" of the commodity to be delivered, win because they have locked in a future delivery price that is higher than the current price.I][URL="http://en.wikipedia.org/wiki/Wikipedia:Citation_needed"]citation needed[/URL][/I
Some analogies that have been used as mnemonic devices:

• Bull is short for 'bully', in its now mostly obsolete meaning of 'excellent'.
• It relates to the common use of these animals in blood sport, i.e bear-baiting and bull-baiting.
• It refers to the way that the animals attack: a bull attacks upwards with its horns, while a bear swipes downwards with its paws.
• It relates to the speed of the animals: bulls usually charge at very high speed whereas bears normally are thought of as lazy and cautious movers -- a misconception because a bear, under the right conditions, can outrun a horse. [12]
• They were originally used in reference to two old merchant banking families, the Barings and the Bulstrodes.
• Bears hibernate, while bulls do not.
• The word "bull" plays off the market's returns being "full" whereas "bear" alludes to the market's returns being "bare".

blunt_crayon

OK, thanks!

carolt wrote: »

Lots of good bear food there.

So we're not talking about feeding the economists to the bears then. Thought it was a little off subject.

carolt

I like it!

Munch munch.

JUST JOKING.