Why are posters so Obsessed with House Prices?

Running_Horse

borntobefree wrote: »

Why are posters so Obsessed with House Prices?

The clue is in the title of the forum. Tends to attract those with an interest in the subject.

I agree with you in as much as house price rise, fall, or remain exactly the same, and will continue to do so forever. Talking about it endlessly here will not influence prices one iota.

Thrugelmir

Running_Horse wrote: »

The clue is in the title of the forum. Tends to attract those with an interest in the subject.

I agree with you in as much as house price rise, fall, or remain exactly the same, and will continue to do so forever. Talking about it endlessly here will not influence prices one iota.

You are overlooking an important factor. "We", in this instance, are the market. Our concensus view is ultimately what will drive the market up or down.

Running_Horse

Depends how many here are in the market. Even those here buying houses must account for less than 0.0001% of the total market. Sadly for those with an inflated opinion of their opinion, the more you post here does not influence the housing market. Just endless posts saying the same thing on both sides of the argument.

Thrugelmir

Running_Horse wrote: »

Depends how many here are in the market.

Everybody here that owns a property is the market.

Every decision to look at or list a property, complete a purchase or sale, upsize or down size, even when we eventunally die has an impact on the market in some way.

The propert market is driven by confidence primarily. Peoples expectations of their jobs, interest rates etc. The more uncertain the overall market. The fewer the number of transactions. Which then makes price movement even more pronounced.

Markets are irrational. Envitably there will overshoot, both at peak and at bottom, before stablising again.

Emy1501

OP's point would make sense if there were reasonable long term ie 25 year rates available but as most only fix for 2-3 years then 10-20% falls with rate rises of 2-3% would be better in the long term for those considering buying.

There are 5-10 year fixed deals out there but you need to have a very low LTV to get one and I expect that vast majority will be turned down for them especially those wanting the ones with very good rates.

Exocet

Running_Horse wrote: »

Sadly for those with an inflated opinion of their opinion, the more you post here does not influence the housing market.

I'm not sure about that. One plausible and pertinent pithy post placed here could bring the whole lot tumbling down. I remember posting on Mumsnet just before the Lehmans thing nearly took out the market. "We're fooked" I posted in response to someone banging on about the price of maternity bras. What happened next? That's right - markets down 25% worldwide. Just before Northern Rock I made a little joke on Singing Pig "Save now while banks last" - well you know the rest.

Of course Wikileaks think they invented this stuff. I'll tell you now, I've been leaking for years. Rock on.

Running_Horse

Exocet wrote: »

I'll tell you now, I've been leaking for years.

Too much maternity can do that for you.

chucky

Procrastinator333 wrote: »

Imo interest rates can really only be a win win for today's procrastinating FTB. One of 2 things will happen.

1) They stay at these low rates and when the FTB is ready and has a suitable deposit they will get a decent rate.

2) They rise and house prices take a battering.

I think 1 is far more likely, but either way :beer: for the FTB.

a question that many can't answer...

why would rates rise - because of inflation or after QE is unravelled, right?...

so... why would property be the only asset going down in price when we have inflation going up in everything else except houses?

Graham_Devon

chucky wrote: »

a question that many can't answer...

why would rates rise - because of inflation or after QE is unravelled, right?...

so... why would property be the only asset going down in price when we have inflation going up in everything else except houses?

No ones saying only houses would fall.

The rest of the economy would suffer also.

What people are saying is you cannot keep just pumping money in and stimulating the economy. So if falls happen for a second time round....how are we going to stop everything in the economy? More debt?

Procrastinator333

chucky wrote: »

a question that many can't answer...

why would rates rise - because of inflation or after QE is unravelled, right?...

so... why would property be the only asset going down in price when we have inflation going up in everything else except houses?

I think the only way rates go up is:

a) Growth picks up and the economy starts to grow at a sustainable level again. I think we can discount this one for a while.

b) QE or whatever reason drives serious inflation. Even up to 4, maybe 5%, I think they will make excuses, but at some point they would have to raise rates. But I don't see this happening, what is going to drive inflation?

So really only possibility is b.

So then if I have understood your Q correct you are asking why I think houses will fall in price while everything else will be rising in such a scenario?

Becuase I think if interest rates were much higher, they will start to drive forced sales. I don't think it is unreasonable to assume that the high levels of unemployment and partial employment mean there will be a statistically significant number who can't afford the extra couple of %.

I don't think interest rates are going to rise, so this is all a bit of a moot point for me. DC and the BoE are planning a little inflation party imo. And I don't blame them - I would do the same.

So really it brings me back to the notion that yes, interest rate is an important part of house purchase, but if anything this is even more reason for the FTB not to buy today. Wait until they have 20-25% deposit.