House Price Crash 5

ManAtHome

Gorgeous_George wrote:

These threads are still boring though.

Dunno - the last one had some interesting stuff on stats and probability...

Alan_M_2

Indeed it did, Actually learnt something of interest on that thread....

lynzpower

Agree with you Alan. Ive participated in more of these threads than I care to remember. As the Why dont you kids said "do something less boring instead!"

RHemmings

Alan_M wrote:

Statistics are baseless unless you're are provided with information on how the statistics are compiled, in so much as taking a poll on a website such as Housepricecrash.co.uk on whether there will be a crash in the near future or not, will still provide valid statistics but the sample group isn't exactly what you'd call representative. However as a statement of statistics they are completely valid.

How can statistics be "valid" if the sample group is far from being representative?

RHemmings

sm9ai wrote:

It is very bizarre isn't it. They really do defy logic.

Prices HAVE to crash (or drop, but the way people go on any drop is a crash). There will become a time when no-one can afford.

True. House prices are a bubble. The pressure will have to be released at some time. The problem is in predicting how and when it will happen.

Alan_M_2

Becasue they are as valid as a stand alone set of statistics, that's the very point I'm making, statistics don't have to be based on even reasonable compilations, they can be compiled from anything you want, they are still valid as statistics. Utterly meaningless but valid none the less.

Historically government average house price statistics for the past two decades have not included repossesed properties taken to auction, or properties where the negative equity reached such a level that the keys were handed back and the debt wriiten off, as in neither of these cases there was actually a house sale in the traditional sense.

Therefore if you look back at the factual government statistics , there was in fact no crash in the early 90's it must have been a figment of our imagination.

Now obviously we know different, and knowing that doesn't make the statistics any less valid, even if they are utterly useless in the form they are produced.

Hereward

RHemmings wrote:

sm9ai wrote:

It is very bizarre isn't it. They really do defy logic.

Prices HAVE to crash (or drop, but the way people go on any drop is a crash). There will become a time when no-one can afford.

True. House prices are a bubble. The pressure will have to be released at some time. The problem is in predicting how and when it will happen.

Whilst it is true property prices will eventually stop rising, they do not necessarily have to crash, they just could have a period of zero prices rises. In addition, I have yet to see any evidence that property prices are forming a bubble: just because people here believe that they are doesn’t mean that a bubble is/has formed.

sm9ai

Hereward wrote:

Whilst it is true property prices will eventually stop rising, they do not necessarily have to crash, they just could have a period of zero prices rises. In addition, I have yet to see any evidence that property prices are forming a bubble: just because people here believe that they are doesn’t mean that a bubble is/has formed.

They could do, but that would require severe wage inflation.

But using very rough figures.

If you assume at the moment that nobody below 30 buys houses anymore when say 5 years ago lots did.

Well fast forward 10 years of more price rises and nobody below 40 can afford to buy a house.

Well due to the 25 year mortgage you really can't buy after 40 anyway(again there are exceptions but for the majority...). So suddenly no normal person will ever be able to buy.

lynzpower

Well due to the 25 year mortgage you really can't buy after 40 anyway(again there are exceptions but for the majority...). So suddenly no normal person will ever be able to buy.

And not many people will be able to sell either, unless of course they drop the prices....

Im sure we have been here before tho!

Gorgeous_George

sm9ai wrote:

Well fast forward 10 years of more price rises and nobody below 40 can afford to buy a house.

...except, they may have large inheritances from people who had houses. Now they have their inheritance AND their salary to throw at the housing market.



GG