Get ready for the housing crash part II

pawpurrs

I am ready............crash where are youuuuuuuuuuuuuuuuuuuu???

kennyboy66_2

Really2 wrote: »

To be fair that is another bad bit of journalism the "real bottom" may have been 6 years after. Nominal is a lot sooner than that (I think around 18 months).

But Agree we could be bouncing around the bottom for 6 years, but that would be a reason to buy now at a low IR and overpay not wait until rates go up. So it contradicts it's self a bit.

The "nominal" bottom in the last HPC was 6 years after the peak according to Halifax.

Peak May 89 £70247
Low July 96 £60965

You would have to think that this "crash" has to be worse / longer at some stage.

Really2

kennyboy66 wrote: »

The "nominal" bottom in the last HPC was 6 years after the peak according to Halifax.

Peak May 89 £70247
Low July 96 £60965

You would have to think that this "crash" has to be worse / longer at some stage.

Nationwide was under 4 years but they were with £2K (3.5% ish) of that price within 2.5 years.
So it did bumble around the bottom for a long time.
http://www.mortgageguideuk.co.uk/housing/uk-house-price-index.html

What about the one before that.

Also Would the depth of the fall not the length be more relevant. We were going to have a "soft landing" that could of been a 20 year crash.

lemonjelly

kennyboy66 wrote: »

The "nominal" bottom in the last HPC was 6 years after the peak according to Halifax.

Peak May 89 £70247
Low July 96 £60965

You would have to think that this "crash" has to be worse / longer at some stage.

This corresponds with my thoughts that it all appears to have got better all too quick. Makes me wonder if what we're hearing is true, or only part of the story...

Lotus-eater

kennyboy66 wrote: »

You would have to think that this "crash" has to be worse / longer at some stage.

I'm finding it very hard to believe it's all over, but as a chink of light, I myself was starting to wonder if I was wrong this morning and prices were going to continue to rise or do the popular (on here) stagnate, which presumably means rise with inflation, usually this means two things.
1. I've changed my mind at the moment when the market will crash again.
2. Most of the public are thinking the same thing.

Therefore perfect bear trap me thinks.

Quite whether it's going to happen I don't know, so do your own research.

Generali

Heyman wrote: »

The comments underneath are more interesting than the article.

The Fool is an excellent site because of the people that write comments like that, not because of the paid writers.

Their forums are excellent, if a bit scary.

kennyboy66_2

Really2 wrote: »

Nationwide was under 4 years but they were with £2K (3.5% ish) of that price within 2.5 years.



What about the one before that.

Also Would the depth of the fall not the length be more relevant. We were going to have a "soft landing" that could of been a 20 year crash.

And it was a full 9 years before prices hit their previous peaks, this in an enviorment were inflation was higher and the boom was probably a bit less.

Previous house cycles are so affected by inflation at the time, that nominal values are a bit meaningless.

I'm no tin-hatter but if there was an office sweep on when the next peak will be reached, I would be praying for the ticket marked 2020.

baileysbattlebus

Really2 wrote: »

Nationwide was under 4 years but they were with £2K (3.5% ish) of that price within 2.5 years.
So it did bumble around the bottom for a long time.
http://www.mortgageguideuk.co.uk/housing/uk-house-price-index.html

What about the one before that.

Also Would the depth of the fall not the length be more relevant. We were going to have a "soft landing" that could of been a 20 year crash.

The last crash played out differently in different parts of the country - we live near Reading and prices dropped off a cliff - in the north east where my sister lives the falls were much slower and lasted much longer.

Here prices bottomed in 1992 at £69k from a peak of a £100k in late 1989- they bumbled along for about 3 years around £70/71k until early 1996 when they started to rise. As a number of you know we sold & bought in the last crash - as it happened more or less at the bottom - peak for our house was about £135k in 1989 - a fairly new house and lots of them being bought and sold - we sold in 1993 for £80k. On the other hand we were able to buy a house that would have been out of reach at the peak.

In the the north east they peaked at about £48k in 1989 - but fell fairly slowly to a bottom of around £42k in 1995 - they also started to rise in 1996

Then you have areas like the north west where the peak wasn't unitl 1992 and prices stagnated for a couple of years, fell a a bit in 1995 then started to rise in 1996

I think everywhere was different - the south east and London were hammered - I don't think anywhere else was hit to same degree.

In London & the south east part of the last boom was caused by Chancellor Lawson and the announcement in the 1988 budget (April) that Miras for joint unmarried buyers - who each were able to claim a full amount - would be abolished in the August - if you were married you got it between you. It caused a buying frenzy here - I can remember it - and can remember people at work pairing up to buy houses. It was absolutely mad.

I think this crash will be the same in respect of prices falling- different in different areas - some places may fall very little - others by quite a lot, though fairly big falls seem to be more wide spread than the last time.

And the crashes aren't really comparable - the causes are different - the reasons for the recessions are different.

I have no idea how this will play out in the end - during the last crash there wasn't a credit shortage, but interest rates were so high people couldn't afford to buy, not necessarily because they couldn't afford the prices, they couldn't afford the repayments.

lemonjelly

baileysbattlebus wrote: »

The last crash played out differently in different parts of the country - we live near Reading and prices dropped off a cliff - in the north east where my sister lives the falls were much slower and lasted much longer.

Here prices bottomed in 1992 at £69k from a peak of a £100k in late 1989- they bumbled along for about 3 years around £70/71k until early 1996 when they started to rise. As a number of you know we sold & bought in the last crash - as it happened more or less at the bottom - peak for our house was about £135k in 1989 - a fairly new house and lots of them being bought and sold - we sold in 1993 for £80k. On the other hand we were able to buy a house that would have been out of reach at the peak.

In the the north east they peaked at about £48k in 1989 - but fell fairly slowly to a bottom of around £42k in 1995 - they also started to rise in 1996

Then you have areas like the north west where the peak wasn't unitl 1992 and prices stagnated for a couple of years, fell a a bit in 1995 then started to rise in 1996

I think everywhere was different - the south east and London were hammered - I don't think anywhere else was hit to same degree.

In London & the south east part of the last boom was caused by Chancellor Lawson and the announcement in the 1988 budget (April) that Miras for joint unmarried buyers - who each were able to claim a full amount - would be abolished in the August - if you were married you got it between you. It caused a buying frenzy here - I can remember it - and can remember people at work pairing up to buy houses. It was absolutely mad.

I think this crash will be the same in respect of prices falling- different in different areas - some places may fall very little - others by quite a lot, though fairly big falls seem to be more wide spread than the last time.

And the crashes aren't really comparable - the causes are different - the reasons for the recessions are different.

I have no idea how this will play out in the end - during the last crash there wasn't a credit shortage, but interest rates were so high people couldn't afford to buy, not necessarily because they couldn't afford the prices, they couldn't afford the repayments.

Quality post for those not old enough to have actually experienced the last recession. Thank you.

purch

the last boom was caused by Chancellor Lawson and the announcement in the 1988 budget

Chancellor Fatty Lawson, to give him his full name.