House Prices up 4.2% in 3 months Nationwide

chucky

Lotus-eater wrote: »

No I can't and I go on what I remember. To me that's more relevant. Most of the people I talk to seem to have even forgotten that one. Joe says that I may be socialising with morons, which may be true, or may not be The fact that people think differently to the way you think, you don't seem to like or believe.

If you believe that prices will continue up from now, that's your choice, I just happen to think otherwise.

no i don't think prices will go up from now - that's not my point. please tell me where i would have said that here.

my point is why do people compare to the 90s recession and not previous ones when it is the least relevent to today's scenarios.

the previous recessions were more comparable and similar.

so post 90s recession long stagnation of prices. post other recessions quicker HPI than 90s recession - it's convenient to compare the 90s recession because it suits an opinion rather than what could happen.

mp2

chucky wrote: »

in 1973 or even 1980 (before 1989 obviously) house prices would have been valued higher that they'd ever been before because they had always increased afterwards.

it's like saying i'm going to choose 2007 comparing it to 2009 because 2007 is when they've been higher than before in nominal calculations.

ok see the graph on the top right, this shows the real "value" of houses over the past 3 decades based on the value of money at Q1 2008.

e.g house prices in 1980 would be 80k in todays money, prices in 1989 would be 115k in todays money.

as you can see real terms values today are still higher than what they were at any previous peak at any time in the history of house values.

long term, the "real" value of houses should be maybe 90k, based on historical values.

the only reason why they shouldnt be 90k is if you think that there is a fundamantal shift in how much a house is worth compared to any previous history.

Lotus-eater

chucky wrote: »

no i don't think prices will go up from now - that's not my point. please tell me where i would have said that here.

my point is why do people compare to the 90s recession and not previous ones when it is the least relevent to today's scenarios.

the previous recessions were more comparable and similar.

so post 90s recession long stagnation of prices. post other recessions quicker HPI than 90s recession - it's convenient to compare the 90s recession because it suits an opinion rather than what could happen.

You were disagreeing with me, by saying there could be a shorter recovery than the last recession, therefore presumably you disagree with me that prices overall will continue to fall. After all that was my point.

Which previous recession was more similar to this one? I would be happy to sit down and discuss that after this one has finished. Till then it's anyone's guess. I think the previous one is pretty relevant as its the most modern. I don't mind that you disagree with me, in fact it's healthy.

IveSeenTheLight

mp2 wrote: »

but taking history into account, the real long term values of houses should be closer to 90k in todays money.

Taking history into account, you would be looking for a return to one income families with predominantly people not buying property till they settled down and got married.

Times have changed.

mp2

IveSeenTheLight wrote: »

Taking history into account, you would be looking for a return to one income families with predominantly people not buying property till they settled down and got married.

Times have changed.

well if youre saying houses are worth more because times have changed then thats up to you i.e there is a fundamental shift in the market.

it maybe worth more, but that much more?

what i would say is that in 1989 the % of women in work was only slightly lower than it is today.

also does the market fundamentally shift in the space of 5 years? or did something else drive it....

chucky

Lotus-eater wrote: »

You were disagreeing with me, by saying there could be a shorter recovery than the last recession, therefore presumably you disagree with me that prices overall will continue to fall. After all that was my point.

yes by comparing which recession and how the UK has come out of each recession.

Lotus-eater wrote: »

Which previous recession was more similar to this one? I would be happy to sit down and discuss that after this one has finished. Till then it's anyone's guess. I think the previous one in pretty relevant as its the most modern. I don't mind that you disagree with me, in fact it's healthy.

i would say that 1973-1975 was very similar to the causes that caused the current recession. post 1975 assets soared in price - i think 1975 is the biggest rise in the FTSE for one year and HPI went quite high too.

not saying this will happen but it dispells the comparing to the 90s recession a bit - have a read

The Secondary Banking Crisis of 1973–75 was a dramatic crash in property prices in Great Britain which caused dozens of small ("secondary") lending banks to be threatened with bankruptcy.

These secondary banks, like the larger institutions, had been lending based on the then recently rising housing prices in the late 1960s and early 1970s, and borrowing heavily to hold the loan assets. The rise in housing prices was seen as the last hurrah of the British Post-War boom. A sudden downturn in housing market prices coupled with hikes in interest rates and the jump in Oil prices caused by the 1973 Yom Kippur war left these smaller institutions holding many loans secured by property with lower value than than the loans. The Bank of England bailed out around thirty of these smaller banks, and intervened to assist some thirty others. While none of these banks were left unable to pay depositors, the Bank of England lost an estimated £100 million.[1] The downturn was exacerbated by the global 1973–1974 stock market crash, which hit England already in the midst of the housing price crash.

http://en.wikipedia.org/wiki/Secondary_banking_crisis

System

I think the culture (if that's the word) has changed as well. People are simply prepared to (relatively) pay more nowadays.

Lotus-eater

Joeskeppi wrote: »

I think the culture (if that's the word) has changed as well. People are simply prepared to (relatively) pay more nowadays.

That's correct, which is exactly what happened in the last boom and in the bust afterwards... they weren't.

I'm not saying this will happen, but I await developments with interest.

mp2

Joeskeppi wrote: »

I think the culture (if that's the word) has changed as well. People are simply prepared to (relatively) pay more nowadays.

indeed, the culture did change, although you could say that the culture can change back very quickly. are people now starting to realise theyre over paying for average housing.

a recession can quickly change peoples view of money, and how much something is worth.

MrDT

Joeskeppi wrote: »

I think the culture (if that's the word) has changed as well. People are simply prepared to (relatively) pay more nowadays.

The culture/mindset is changing. People were willing to pay more for a 'sure thing' that would net them a tidy profit. Mindset changes when people realise that "prices can go down as well as up".