House prices down 0.9% Nationwide report out

Pete111

I used to really worry about all these fluctuations - especially before I remortgaged last year

Recently however, it dawned on me that, given my current home is very nice and easily large enough to raise a family if we wish to have one (and our mortgage is only 40% of value - reducing all the time) it really doesn't matter if the price rises or falls in the short or even medium term...

Equally, although I'm keen to sell my rented flat for a tidy profit at some point, given I make a net return of over 15% on it (and rents are rising currently) that's a win /win too..

However, I know that that is not the response the bears are looking for so I will now go and hide under my desk gibbering inanely for an hour or two to make them feel better about themselves.

P

Graham_Devon

Heyman wrote: »

No, this is the all important graph - where are we on it now?

Just past return to normal.

Though we appear to be seeing fear

HAMISH_MCTAVISH

Graham_Devon wrote: »

Just past return to normal.

Actually we've just passed return to mean.;)

DervProf

HAMISH_MCTAVISH wrote: »

Actually we've just passed return to mean.;)

Have prices really fallen that much ? (I`m assuming that graph is roughly to scale).

DervProf

Graham_Devon wrote: »

Just past return to normal.

Though we appear to be seeing fear

We have nothing to fear, but negative equity itself (or at least that our house might not increase in value by 5%+ per annum).

ruggedtoast

sarkin1 wrote: »

and the value of your house is falling faster than you can repay the debt. :rotfl:

Thats out of order.

Why would the idea of someone getting into negative equity make you happy?

Its as bad as Hamish Mctavish gloating about people being priced out.

Really2

Graham_Devon wrote: »

Though we appear to be seeing fear

What happened to your favourite word "context" graham? how are you judging people are now in fear from the comments on here and the graph.

Desperate to start an argument by making out people are now in fear.

Why do you need to do it on every release of data?

I avoided this today as you say I start the arguments, the above seems to disagree.:)

HAMISH_MCTAVISH

DervProf wrote: »

(I`m assuming that graph is roughly to scale).

It isn't to scale.

Prices did indeed fall below the mean, and have since recovered to slightly above it.

michaels

Hopefully the evidence now paints a fairly clear picture that the increases that started March 2009 and lasted for about a year on the back of tight supply have now ground to a halt as signs of life in the market, stronger prices and the abolition of HIPS brought sellers back in to the market.

Hats of to Hamish for calling the year almost perfectly, I was slightly too bullish; the post election downturn has been slightly sharper and slightly sooner than I expected - with hindsight I should have seen that the uncertainty would have kicked in at the start of the campaign rather than after the election (which I also thought might have been delayed until the start of June.

IMHO the debate now moves on to one between the 'bulls' who are predicting stagnation and the 'bears' who see a further correction.

1) The bulls reasoning centres around the argument that supply will be self limiting, vendors will simply not accept big price reductions and given that forced sellers are a small part of the market as long as the economy remains strongish and the govt continues to protect those who lose their jobs from repossession (and indeed the banks continue to shy from the write downs that reposession implies) prices are likely to stagnate in nominal terms.

2) The bears reason that the economy remains weak, there will be more forced sellers and that it is the price of those properties that actually that drive the house price indicies (falling volumes means the forced sales are a big proportion of all sales). Continuing credit restrictions especially given that falling prices mean that lending risk increases will also restrict demand from new entrants to the market.

I think the arrangements are fairly finely balanced but tend to agree with the bears especially as I think price expectations are a huge driver of the market, if falling prices enter the public zeitgeist then they become self reinforcing - no one wants to buy now when it will be cheaper to buy in a years time. This arguement suggests prices will tend to move in cycles rather than stagnate.

Of course during the previous downturn the Govt produced a deus ex machina with massive QE and a huge fiscal deficit and maybe they have something else up their sleeves - may be negative interest rates?

HAMISH_MCTAVISH wrote: »

Given that I predicted several months of falls this year on the 2010 predictions thread, I'm actually right.

ruggedtoast

Realist Bear is over in the other place confidently predicting annualised falls of 20%. They should put a health warning in his signature.

Just looked at rightmove, everythings still the same price.

Nevermind...