Why house prices are certain to fall

The_White_Horse

macaque wrote: »

White Horse

As club president I am pleased tell you that your post wins this month's Rubber Cow Pat Award for the most peverse rationale for buying a house. If you can also furnish with a breakdown of how your theory works you could be a contender for the annual golden bolox prize

The Right Honourable Simian Macaque ADHD
President of the 70% club

my point is perfectly clear.

If you have a house worth 200k and a mortgage of 100k that means you have 100k equity.

that means, if you move, you can take the 100k with you as a deposit.

if the house you want to move to was 400k and is now 300k, and you have zero deposit, you may not be able to move. as you would need a 300k mortgage with zero deposit.

if it was 400k and you had 100k to put down, then you would need a 300k mortgage with a 25% deposit. much more likely.

its not brain surgery.

i don't see how you can't understand something so simple.

that is not the rationale for moving. that is something people need to consider if they need to move - for example, if they intend to have children in the near furture.

Cleaver

The_White_Horse wrote: »

a three bed house that is worth 300k should really be worth no more than 150k. However, they will not fall to this level for one reason, and one reason only. People are spazzes.

It's rare that you read a post that's completely stupid and irrational but actually makes quite a succinct and correct point.

I don't agree that a 'a three bed house that is worth 300k should really be worth no more than 150k'. A three bed house is 'worth' the market value, depending on what someone is willing to pay.

I do however fully agree that they won't fall to that level because 'people are spazzes'. I probably would have waffled on for a paragraph or two about human behaviour and tipping points being the reason for prices not falling past a certain level, but 'people are spazzes' does seem to sum it up in a neat and tidy way.

Yakubu22

Cleaver wrote: »

It's rare that you read a post that's completely stupid and irrational but actually makes quite a succinct and correct point.

... but 'people are spazzes' does seem to sum it up in a neat and tidy way.

My sentiments exactly! Sometimes being blunt is best.

System

The_White_Horse wrote: »

my point is perfectly clear.

<snip>

I made a similar statement a while back and got labelled "sad and pathetic".

HPI paying my desposit for me for my next "upgrade" works for me.

JonnyBravo

geoffky wrote: »

JOE the king of the one liner.....again.. and four fools

I'll make it five.

If geoffrey doesn't like it then it must be good.

Stroll on geoffrey.

:rolleyes:

LydiaJ

IveSeenTheLight wrote: »

The formula is grossly wrong.

A more simpler set of formula are: -

Supply > Demand = House Prices Dropping
or
Supply < Demand = House Prices Rising.

NOTE: My definition of demand is the desire and the ability to purchase the product, not I want I want I want (but can't afford)

I don't think the OP (or anyone else) would disagree with your formulae. They win a prize for stating the blindingly obvious. The debate is about what factors affect demand (and to some extent also supply) - some of which were mentioned in the OP's formula.

To use your own terminology, since "the desire and ability to purchase the product" is a highly complex and unpredictable variable, then no formula with "demand" is ever going to be "simple" except insofar as it's brief to write down.

mewbie_2

LydiaJ wrote: »

I don't think the OP (or anyone else) would disagree with your formulae. They win a prize for stating the blindingly obvious. The debate is about what factors affect demand (and to some extent also supply) - some of which were mentioned in the OP's formula.

To use your own terminology, since "the desire and ability to purchase the product" is a highly complex and unpredictable variable, then no formula with "demand" is ever going to be "simple" except insofar as it's brief to write down.

Phew. Makes my head spin just reading all that. Luckily I don't need a formula to know an overpriced turd hole when I see one. It's a sort of inbuilt radar.

new_home_owner_3

geoffky wrote: »

You sir are in for one of a big shock...and if you can not see it coming how are you going to protect yourself.?.. i don't mind a bit of optimism but you do not see whats in front of you and to me that is very dangerous..

I have tried to plan ahead, ive just got a good five year fixed, deal and even better i got a cracking 5 year fixed deal at the begining of the year, which i have just got consent to let on.

Im just going to see what happens, geoffky do you really think houses are going to fall as much as what some of the dreamers on here think, i think not but thats my opinion.

Ive still got over 30% equity in my btl property, and ive just put 40% deposit towards my next purchase, touch wood it will all go trhough smoothly in the next few weeks.

If the house falls come then fair enough, what goes down always go back up, im looking at the bigger picture and in about 10 years away, most graphs prove house double every 10 years.

The last peak was 1989 and house prices stagnated and dropped about 7- 8000 pounds, the reason houses lowered was because of high interest rates i just can not see it happening this time.

http://labs.timesonline.co.uk/blog/2009/01/27/what-property-price-bubble/

mewbie_2

new_home_owner wrote: »

most graphs prove house double every 10 years.

Yeah. Like wages?

How's that work then?

Don't bother replying, I wont read it.

new_home_owner_3

mewbie wrote: »

Yeah. Like wages?

How's that work then?

Don't bother replying, I wont read it.

Im sure you can work that out for yourself, you dont seem to be that thick, or are you?