If house prices fall another 37% ...

whathavewedone

Surely if the writer of this article STR he is to be taken about as seriously as Kirsty Alsopp?

He has a massive vested interest in talking the market down.

Look at the hoo haa over the possibility of moving this forum further down the board. Now that isn't going to inconvenience any of us but the people objecting most vociferously are the ones with vested interests in the market crashing far further.

If people on here who have STR/FTB looking to get a house as cheap as possible think that they have the power to lower prices still further it's pretty obvious that a journalist is going to make the most of his position.

Yes prices could fall 37%. We could all be wiped out by the plague or noughties equivalent. 80% of the country could be bombed by terrorists. The world could end. Only a fool would rule these things out. Blah. ANYTHING'S POSSIBLE. Whether it's likely or not is another matter. M

Mortgage approvals are up - reported in the Torygraph and dismissed by the bears as a "blip". Some article gets written by some guy whose sold to rent and it's gospel.

Kenny4315

Jim_B wrote: »

Assume that the "correct" price is 100.

100 to 135 - 35% too high.
135 to 58.05 - 57% drop.

That's from 35 over to 42.95 under. If they can go 35 over, I reckon they could go 42.95 under, given the right circumstances such as increased unemployment, increasing tax burden and all the rest of the things we may well have to look forwards to.

Hey, if Kenny's allowed to just repeat himself, so am I!

What are your figures telling me here ??

A 35% drop from 135 is 87.75. If 100 were the price after a 35% fall the initial price would be 153.84.

StevieJ

Graham_Devon wrote: »

I remember a year or so back, even 9 months back, people stating house prices could only fall roughly 10% by roughly this time, as it would not be allowed to fall further because of the election and people would be snapping up houses as they would be at a bargain price. Hasn't happened.

In fact, house prices have fallen over 20% from peak in a very very short period of time.

I said they would fall by 20% and bottom in the spring of 2009, some may say optimistic, not for me to comment, to paraphrase the baddie in a famous poitical series

Kenny4315

Graham_Devon wrote: »

Why would it bankrupt most individuals in the country, when prices rose 200%+, 300%+ being the norm in 10 years? 50% have no mortgages, and a hell of a big chunk of the other 50% with mortgages will be sitting on a LOT of equity.

It would only bankrupt those who can't afford to pay the mortgage and BTL's.

Edit: Anyone know in the last crash what percentage it was from peak to trough?

It's all been spent .... cars, home improvements, holidays, etc.

Graham_Devon

Kenny4315 wrote: »

It's all been spent .... cars, home improvements, holidays, etc.

And?

If they don't HAVE to move, they won't become bankrupt.

Jim_B_3

Kenny4315 wrote: »

What are your figures telling me here ??

I'm telling you that a 57% drop from 135 is 58.05

The point is that if we can go 35 over the "correct" price, going 40 or so under doesn't seem so impossible.

Graham_Devon

StevieJ wrote: »

I said they would fall by 20% and bottom in the spring of 2009, some may say optimistic, not for me to comment, to paraphrase the baddie in a famous poitical series

I said 50%

Well, 45-55% I actually said, but got lambasted as it gave to much margin! So going for the middle.

I never have given a date for the bottom though, I just can't predict it comfortably as I never know what Brown will do next!

Though it's passed your prediction

StevieJ

penguine wrote: »

Ah, the supply and demand argument. Nice to see that old chestnut hasn't gone away yet.

:rotfl: Tell you what let us throw in affordability, the base rate in 1995 was 6.75%, so mortgage rates would have been 2% higher. BR rate in 2009 is

Wookster

Kenny4315 wrote: »

It's not really bold ruling out a 57% drop it's obvious. :money: It would bankrupt most individuals in the country which Mr Clown can't afford to do.

Falling house prices alone don't bankrupt people. Losing jobs and being unable to service debt repayments do.

It is the foolish notion that house price rises are wealth that has caused this problem.

Graham_Devon

StevieJ wrote: »

:rotfl: Tell you what let us throw in affordability, the base rate in 1995 was 6.75%, so mortgage rates would have been 2% higher. BR rate in 2009 is

Hey, don't run before you can walk. You are comparing a done and dusted crash with one still in process and cherry picking