Spot the suckers rally.

chucky

HAMISH_MCTAVISH wrote: »

Wow.

Plummeting, clearly......:rotfl:

he'll then say that they go up to the end of May (less than 6 weeks ago) and house prices have plummeted since then. that's why i gave him the Nationwide London figures which are a couple of weeks old, that totally contradict everything he says.

at least he's good comedy value - it's like watching a car crash

Dirk_Rambo

house prices round my way are going down even faster now. it looks like one big scary downward spiral from where im sitting

pop_gun

i've read this thread in it's entirety and i concur with brit1234. in 2005 (long before the market crash) i was talking to a then colleague of mine and she was looking to sell her property (admittedly a flat), but she'd had it up for sale for 9 months previously, with little or no interest from prospective buyers. this was when you could still get a 90%-100% mortgage.

my rule of thumb is whatever america is doing we'll soon follow.
the U.S. administration has given the banking sector $23trillion dollars to remove toxic assets from their balance sheets. this was last year. it's now been revealed the banks never used the money to clear the CDO's. if my rule of thumb is right then the banks in this country didn't use the bailout to clear their balance sheets either.
which really means we're back at square 1 and the banks will be asking for another bailout sooner or later. if the CDO's are still there then the banks must feel they can recoup their losses from those looking to buy.
and the only way they can do that is from the mortgage rates they charge and keeping house prices at pre crash prices.

what this means for sellers is that house prices will remain stable, falling or rising the odd percentage point, though the fact of the matter is they're still too high for first time buyers, because interest rates are so low and the only real activity in the housing market is between homeowners looking to trade up or down.

Generali

brit1234 wrote: »

I think personally we will have a rapid decline in prices as mortgage funding shortages gets a grip.

Its not about supply and demand in the end when it comes to property but access to funding that will dictate prices.

Mortgage funding is a part of demand as demand at any given price is the number that are willing and able to pay. If mortgage funding dries up so does many peoples' ability to pay.

HAMISH_MCTAVISH

And supply is constituted of people who are willing and able to sell at any given price.

As we have previously seen over the last 2 years, when prices fall, the majority of potential sellers are no longer willing or able to sell at lower prices, and supply dries up.

Then prices rise again.

Catch 22.

Generali

HAMISH_MCTAVISH wrote: »

And supply is constituted of people who are willing and able to sell at any given price.

As we have previously seen over the last 2 years, when prices fall, the majority of potential sellers are no longer willing or able to sell at lower prices, and supply dries up.

Then prices rise again.

Catch 22.

It's pretty basic economics, I used to teach it 2nd lesson of my 101 microeconomics course. When prices fall, the supply of most goods fall as fewer people either want to sell (eg it may be more profitable to rent out your house than sell it) or be able to sell (eg mortgage might be > value of the house).

If you go to the buying and selling houses board you see it all the time. People who won't sell at a 'silly price' because their house is 'worth more than that'. Now they are wrong to say that their house is worth more to someone else but they are right to say it is worth more to them. If they won't sell at a price then the house isn't part of supply at that price. It only becomes a part of supply when the price rises to a point that they are willing to sell.

HAMISH_MCTAVISH

Generali wrote: »

It's pretty basic economics, .

And yet so many posters seem unable to grasp the concept.....

Generali

HAMISH_MCTAVISH wrote: »

And yet so many posters seem unable to grasp the concept.....

The thing is, there isn't anything other than supply and demand in a free(ish) market.

Clearly there are some Government actions that act to constrain supply and demand in the UK: eg taxation, Green Belt legislation, planning laws & policies, interest rates & mortgage availability and pension rules. However, all those do is change supply and demand. The only Government policies to interfere with actual price setting I can think of are council house sales (Government sets the price) and rent controls. The impact of these on the overall market is likely to be limited as access to these is limited.

I think a big part of the problem is that the words 'supply' and 'demand' are often misused. For example, demand for Ferraris is very low. The reason? Well they are really expensive to buy and run so most of us mere mortals can't afford one. The reason they are expensive is that supply is also very low. The demand for water is very high in the UK but it is cheap because there is a plentiful supply. In Australia, water is subsidised so people fill swimming pools in the middle of a drought! An example of what can happen when Governments interfere in markets.

System

Chaos_A.D. wrote: »

Maybe it's just their opinion, after all it is a board for 'debating'. I still wonder what motivates someone to take the effort to abuse people when they themselves have not been attacked, it's not a good look.

Lenders require 30-50% deposit" is not an opinion, it's a lie, if you must keep re-registering do me the favour of not polluting the place with idiotic crap like this that got you banned in the first place, or the report button will get clicked.

Why not be honest and say "hey macaque, why are you lying?" He doesn't pay you for your bias, blindly defending it makes you look stupid as well.

useless

everyone is so angry!