Some facts for a change, instead of speculation......

Harry_Powell

Good lord, another thread where everyone sits around trying to explain the simplest concepts to Graham and he flatly refuses to get it and then goes on to introduce other concepts into the mix to further confuse matters. No one can be as dense as Graham makes out. It's clearly just a huge scam to get you lot into a muddle.

He's a genius and is probably laughing his head off at your attempts to unravel yourselves from the various conceptual threads he's entangled you in.

My hat is off to Graham.

IveSeenTheLight

Really2 wrote: »

I for one was fully aware why prices fell.

Wouldn't happen to be because there was less demand for property would it?

Really2

IveSeenTheLight wrote: »

Wouldn't happen to be because there was less demand for property would it?

might be, could be becasue of a high supply back in late 2007 and 2008 also.

IveSeenTheLight

Really2 wrote: »

might be, could be becasue of a high supply back in late 2007 and 2008 also.

I think I have to disagree with you there.

I doubt there was a massive surge in supply from previous levels, while I think it is quite clear that demand fell as a result of the credit crunch factor.

We have since seen the supply levels also drop to a level in which at present is being able to sustain house price increases.

It is yet to be seen if as a result of other factors, whether there will be a dramatic increase of supply to see prices drop (other than in the normal seasonal factor)

Really2

IveSeenTheLight wrote: »

I think I have to disagree with you there.

I doubt there was a massive surge in supply from previous levels, while I think it is quite clear that demand fell as a result of the credit crunch factor.

I think in late 2007 early to mid 2008 saw record numbers of property coming on to the markets. (also that supply not being purchased increased available stock)

I will have to check though.
http://www.moneywise.co.uk/news-views/2008/06/23/record-number-properties-sale
Edit
Can't prove directly that it was down to record amounts coming to market but there were record stock levels.
If that was caused buy falling demand or by more coming to market it still contributed to a downward pressure on prices.

I would say the 2008 situation was low demand high supply.

setmefree2

julieq wrote: »

Leading to the obvious question, given that these indicators collectively show greater demand than supply, why should we expect prices to fall?

Which is the millon dollar question. What might force prices lower?

• Unemployment - High levels of unemployment in young people, for example. But do they buy houses? Unemployment causing repossessions to flood the market. But will the banks just keep hold of repossessed houses? Unemployment rising might choke of demand completely as people become reluctant to move?
• Interest Rates - What could force interest rates higher? An oil spike caused by a growing China creating inflation? A Bond strike?
• Another Bank Crisis which chokes of lending?
• An Oil Spike - Means people have less money to spend on housing as they have to spend more money on petrol and travel and the price of everything goes up - like summer 2008.
• Supply of Houses increases - everyone suddenly decides to sell, builders decide to build - market flooded.
• Tax Rises - VAT, Stamp Duty, Income Tax
• Strong Pound - (I know highly unlikely) Stops foreigners buying up the centre of London

Anything else?

I don't think you'd have to be "insane" to believe that any of the above could lead to a lowering of house prices

mewbie_2

Here's an open question to the optimists (I'm being charitable).

Are you unaware that we have just been through a massive house bubble, built on lax lending and other bonkers economics? Are you of the impression that the trip was guilt free, and that we do not have to pay anything back? Do you actually read a newspaper, or do you prefer Newsround for your factual information? Do you ever notice things like Darlings 40 billion to the banks yesterday and think to yourself "I wonder where that money is coming from"? Do you look at countries that make things, export things, dig things out of the ground and think "It's great that the UK economy is built on ever increasing lending and a house price bubble?

W£ll. Do ya punks?

purch

W£ll. Do ya punks?

I'm insane, so I cannot comment on these threads.

Spiv_2

Supply-side Evidence

However, the group (Taylor Wimpey), which raised £510 million in a rights issue in May, said it remained cautious about making large scale land purchases, with sales in the land market well below normal levels.

http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article6902487.ece

If they're not buying land, they're not going to be flooding the market with houses any time soon, you would think.

Really2

mewbie wrote: »

Here's an open question to the optimists (I'm being charitable).

Are you unaware that we have just been through a massive house bubble, built on lax lending and other bonkers economics? Are you of the impression that the trip was guilt free, and that we do not have to pay anything back? Do you actually read a newspaper, or do you prefer Newsround for your factual information? Do you ever notice things like Darlings 40 billion to the banks yesterday and think to yourself "I wonder where that money is coming from"? Do you look at countries that make things, export things, dig things out of the ground and think "It's great that the UK economy is built on ever increasing lending and a house price bubble?

W£ll. Do ya punks?

No, I missed it (cleaning my shoes). What happened?