anyone else want a CRASH...?

PoorDave

manhattan wrote:

house prices are, in my opinion overvalued by between 30 and 40%. the market needs to come down to a sensible level, before everything grinds to a halt and people get burned.
a quick question for home owners here,do you "honestly" think todays house prices are reasonble?

How on earth do you define reasonable? That's the problem. And would your definition be the same as mine, and the rest of the country?

The country as a whole is dictating that the current prices are OK by buying houses for that much money. I guess those that haven't bought in a while wuold think prices are crazy.

manhattan

so whats your opinion poordave?
undervalued?

CB1979_2

they're neither undervalued or overvalued.

the EA's/owners VALUE the place, if someone buys it the valuation was correct simple as that.

would I have rather bought my 2 bed flat for £100k rather than £167k? of course but unfortunately it wasn't valued at that.

people can speculate about a crash, people can moan about the current cost of housing, but all this effort wasted cos you little individuals aren't going to alter anything (well definately not round my way) for every 1 person who refuses to pay silly money there is no doubt 4 or 5 willing to pay the price.

as i say i wish houses were cheaper, i wish petrol was cheaper, i wish my gas & elec were cheaper, i wish my insurance was cheaper, but alas if people/companies are telling me it's a price i can shop around for a bit but unfortunately the prices are all pretty much of a muchness across the board.

what can I do, I know i'll spend half my day moaning about on a forum (just think you could spend that time having a second job to get your deposit quicker).

but again still no one has answered the question if housing is such a poor "investment"/not essential to get on the ladder why are all the FTBs moaning they can't get on or saying they're not getting on yet cos they're saving a deposit.

If it's so poor what's the desperation? enjoy renting and not having the "hassles" of owning a property, I just don't get why people get so worked up about something that they have no power over.

people bleat on about how much better off they are renting, so what's the big deal, surely it's simple.... carry on renting?

roswell

Ok quick question were technology shares over valued in 2000 ? simply answer is yes, did it stop every FA advising everyone they could lay there hands on to put money in tech shares ?? NO. did it all go wrong in 2001 ??

Just because the estate agent says thats a price for a property doesnt mean that is its true value, it also doesnt prove it is over or under valued. The fact is housing is an economic cycle just like the stock markets / commodities.

it has its ups and it will have its downs, it cant always go up because wages are lagging behind, the banks are trying to keep it going by moving the goal posts eg interest only mortgage / 50 year term / large multiples, even the goverment is in on the act with shared ownership. At one point its going to go wrong just like it has in Australia and is in America We live in the UK but we are not an island thats any different to the rest of the global economy

Snow_Dog

Good point meanmachine, forgot the bottom of the dip in the rollercoaster ride in the early 90's. Blame it on the brandy, I usually do.

tomstickland

How on earth do you define reasonable? That's the problem. And would your definition be the same as mine, and the rest of the country?

However you want. I'd choose to define it as meaning that a single person in their late 20s could afford a 1 bed flat and a couple could afford a 2 bed house.

Snow_Dog

Funny thing is, I can remember the flexible approach to mortgage lending that was going on in the late 80's and I can even remember the outraged media headlines about extended mortgages even then. Banks are like any other business, and to get the mortgage business in times like this they have to adapt and offer something different. If that means the only way they can offer joe bloggs a mortgage on his first dream rabbit hutch is over 50 years then that is what they will do. That is their business. That is how they make money (well and charge 18.3% to the poor boogers that go overdrawn every month).

CB1979_2

fair point roswell but if you owned a property (and you valued it at £150k)and you had 2 individuals with everything being equal.
individual A offers you £100k cos that's what he values it at &
individual B offer you £200k cos that's what he values it at.

which offer as a home owner are you going to take? I'm assuming as you only valued it at £150k you'll say to individual B "nah don't be silly you can have it for £150k, my house isn't valued at THAT much!"

or do you say to individual A "ah fair enough mate, you value it at £100k, you can have it for that amount as that's what you value it at"

of course you'd say "thanks invidual B, can you make the £200k cheque payable to Mr Roswell please" :beer:

again it's simple if you can't afford it, as with everything, don't buy it!

BobProperty

Snow_Dog wrote:

Reasons I can immediately see for HPI between 1997-2004:-

1. Low Interest rates
2. High unemployment levels/ low unemployment
3. Relatively stable employment (more secure than early 90s)
4. Collapse or fall or certain stock markets
5. The belief in "bricks and mortar"
6. Increasing population.
7. Jumping on the bandwagon (bubble followers)
8. Fictional ONS reports including inflation figures.
......However, global interest rates are rising, unemployment is rising, insolvency is rising along with bad debt. When the banks tighten the money supply because they cannot "get" it cheap from very low rate economies that is when the bite will come. For now there have only been a few warning shots across the bows from the Asians. I'm not doom mongering, these are basic facts.

As for who wants a crash, if there is anybody stupid enough out there who really believes that a crash is what we need then you've either never lived through one or the rose tinted glasses and bad memory really are working well.

As for the STR's and the like, well its all well and good sitting on your stash thinking, "hey I will pick me up a bargain at the bottom of the crash", but lets face it HPC have been inaccurately predicting the crash is round the next quarter for the last 3 to 4 years so how in hell are they going to pinpoint the bottom within any accurate timeframe? (not that I have anything against STR as was considering heading down that route earlier this year).

My experience says the market was still flat 1997-1999.
4 and 5 can have failure of pensions as an investment added to them.
The other big influences not in there (which also occurred back in the late 80's early 90's) is the money supply. The government is currently printing money at a rate of about 12-13%. (So much for no boom and bust Brown). The other is the willingness of lenders to extend earnings multiples in an unheard of way, which has extended in turn the bull market.
I think the market is about 30%-40% overvalued, check the house price values against the long term trend. Problem is, it will over-correct when the correction comes as it always does. I will be ready for it. It's not a matter of wanting a crash, it's knowing one is on it's way and preparing for it so that I can best deal with the consequences.

Snow_Dog

tomstickland wrote:

However you want. I'd choose to define it as meaning that a single person in their late 20s could afford a 1 bed flat and a couple could afford a 2 bed house.

Hmmm, well I reckon every late 20's bloke ought to be able to afford a 50 foot luxury cruiser and a ferrari but lifes never a bed of roses;)