House prices at least 20% too high

tomstickland

Interesting question about probability though.
If someone is consistantly wrong about something for a long time, does that mean that they might be right soon, or does their trend of being wrong continue?

LOL.

Looking at the trend for house price rises in the last 5 years then it could be argued that house prices are going to keep rising for a long time; easy money and all that. Then again it might mean that the time is coming for a correction.

Maybe the longer the crashers are wrong for just means the bigger the bubble is growing?

I'm not a crash advocate, though I will be interested in hearing where this infinite growth is going to come from, since most of the recent growth is based on borrowing money, not any real generated wealth.

hearts

izzybusy23 wrote: »

Why do you keep bashing the HPC fanatics? I happen to frequent that website and although they have been off with their predictions, everything they have said for the past six months is coming to fruition.

If you have to keep bashing the HPC brigade then I would say you are fearful of what they discuss.

Quite simply I keep bashing them because they are and always have been wrong.
People have written here that they talk a lot of sense and a lot of what they say on their site has come true, but the very reason for their site was/is to predict a HPC, it hasn't happened and I don't think it will.
They reply to posts on here with constant negativity. I am merely giving an alternative view. A view based not on trying to predict the future but on what I see and I say again I see no sign of a crash.

As for bashing them. Am I not as entitled as them to an opinion? A lot of people come here and from the replies they get will be under the impression that a HPC is a certainty. This is not the case.
I can assure you although I wouldn't like to see a crash I have no fear of one.

tomstickland

I keep bashing them because they are and always have been wrong

Always will be?

I find a full on HPC zealot a bit heavy going, but that doesn't change my opinion of the situation. I cannot forsee infinite growth and know loads of people under the age of 30ish who cannot afford to buy at the moment.

nelly_2

poppy10 wrote: »

More than a !!!!!, I think he is actually mentally unwell (and no, I'm not saying that as an insult, I'm serious.) Some definite autistic/schizoid features apparent.

I just think hes a c0ck

hearts

tomstickland wrote: »

Always will be?

Ah now thats a different matter.

As I said before. The man carrying the sandwich board in the street saying
"The End Is Neigh" Should his decendents carry on the work, then, well eventually they will be right. This could be the case for HPC, never say never.
The HPC website was set up a few years ago. House prices have at least doubled in that time so even if there is a crash soon, they were wrong. Should their site continue then they may eventually be proved right. But if you are a potential house buyer and you decided not to buy because of what they said until now you would be well sick.

ixwood

I'm no bear, but I can't believe people think there''s even an chance house prices will keep going up forever.

Money supply is cause the problem, not any shortgae of houses, or demographic changes.

It's the boom and bust cycle we've had ever since paper didn't have to represent anything. The bust has just been delayed by huge debt taking and benefical global circumstances (i.e. china exporting low inflation).

It'll come, that's for sure IMO. When is the question?

I for one, think it's starting to unwind a bit. But it's hard to know whether all the press recently has originated from devious people with an invested interest (using our lazy guilable press), with a view to stopping the next IR rise.

hearts

"I'm no bear, but I can't believe people think there''s even an chance house prices will keep going up forever".

I agree with this but rather than a crash I think they will flatten out and stay flat for a while.

btloptingout

hearts wrote: »

I agree with this but rather than a crash I think they will flatten out and stay flat for a while.

They seem to be tanking in US, Spain and now Ireland....what convinces you that the same will not happen here?

Prices were well on the drop between Spring '04 until the BOE dropped rates in Aug '05......that drop was a miniscule .25% but led to a 25% increase in prices in SE UK. That rise seems totaly unjustified especially considering BOE rates have gone up 1.25% since.

kingkano

btloptingout wrote: »

They seem to be tanking in US, Spain and now Ireland....what convinces you that the same will not happen here?

Prices were well on the drop between Spring '04 until the BOE dropped rates in Aug '05......that drop was a miniscule .25% but led to a 25% increase in prices in SE UK. That rise seems totaly unjustified especially considering BOE rates have gone up 1.25% since.

Are you sure it was the IR drop that caused things to surge again?? Could it not have been that prices started to drop a little, people felt it was worth investing again as it was off the boil??

This is my theory if there are any drops there won't be a crash. As soon as 5% or 10% is dropped, BTL will start sniffing around as the yields will be up a bit. Or FTB will think yes I can finally afford to get in. I dont subscribe to this theory that everyone will sit back thinking I'll wait for the bottom.... as we have already seen 'people' just arent this smart. They'll buy as soon as they can afford to.

It might be a roller coaster ride though!

Generali

tomstickland wrote: »

Interesting question about probability though.
If someone is consistantly wrong about something for a long time, does that mean that they might be right soon, or does their trend of being wrong continue?

There's a book out at the moment called The Black Swan that looks at asset markets.

It gets it's name from the idea, until the late C18th, that swans were always white. Their whiteness and swan-ness we utterly intertwined. Then Capn Cook rocked up in Australia and....

His central theme is that it's impossible to predict big events (like a house price crash) accurately.

Now whether that makes the predictors of a HPC or those that deny such a thing can ever happen the fools is up to you.