So, House Prices can't fall uh?

phlash

http://www.permanenttsb.ie/news/default.asp?nid=551

The article above discusses House Price falls in Ireland, not far away from us really, and maybe the UK should learn some lessons quickly about speculative markets, which the housing market has turned into (Homes into Investment properties).

With the threat of this global credit crunch that is having such an affect on all the world's shares right now (FTSE -3% today so far), ordinary people will be hit with increases in the cost of borrowing, meaning they cannot offer as much for the houses they want and current homeowners will need to pay more to service their debt.

From the article:

"In the first five months of 2007 prices nationally decreased by 2.1%"

It seems that all around our little Island, housing markets have big questions being asked of them. Stories from as far away as the USA to places closer to home - Ireland and Spain. The threat of this credit crunch may be a nice scapegoat for the housing market to start a downturn, despite much agreement between economists in the past few years that the market is overvalued, we may now have the real possibility of a 'trigger' to reset fundamental prinicples.

Watch this space.

movilogo

History repeats itself and law of diminishing will return at some point of time.

Even the universe won't expand forever, it will start contracting at some time (though after 500 billion years later)

People's wages are not increasing - yet house price is increasing. There must be a point where a limit will be reached. That will become the stabilisation point.

So, house price won't crash in true sense, but there will be definitely a stabilisation soon.

phlash

So what you're saying is for something to truely "stabilise" as you put it then house prices may need to fall and not plateau.

Dynamic stability is about return to an equilibrium point, if as you say that wages and house prices are not at this equilibrium point and that wages are not increasing sufficiently, then by your own definition you are indicating that house prices will fall.

scope

Keep in mind that when media talk about prices going down they often talk about down 2% on last year - what they mean is often "last year they went up by 8%, this year they went up by 6%", so 2% less, but far from a price reduction.

phlash

scope wrote: »

Keep in mind that when media talk about prices going down they often talk about down 2% on last year - what they mean is often "last year they went up by 8%, this year they went up by 6%", so 2% less, but far from a price reduction.

Except that that isn't the case with this article. It was not talking about a drop in the rate of 'acceleration' but about a drop in the rate of 'speed', if thats how you'd like to look at it.

The article was talking about real MoM falls, that's why there is this quote from the article:

"The average price paid for a house nationally in May 2007 was euro 304,166, compared with euro 310,632 in December 2006."

You are right about the press in many cases, just not this one!

Snow_Dog

Yup and for every bearish doom and gloom article you will find somewhere a bullish things can only go up article.

Not saying which is true but if you go round waving news articles written by most of todays so called journos get ready to be shot down in flames because the art of journalism has turned from real investigative into regurgitating pre-prepared statements from various vested interest groups.

spurs_nut

phlash wrote: »

http://www.permanenttsb.ie/news/default.asp?nid=551

The article above discusses House Price falls in Ireland, not far away from us really, and maybe the UK should learn some lessons quickly about speculative markets, which the housing market has turned into (Homes into Investment properties).

With the threat of this global credit crunch that is having such an affect on all the world's shares right now (FTSE -3% today so far), ordinary people will be hit with increases in the cost of borrowing, meaning they cannot offer as much for the houses they want and current homeowners will need to pay more to service their debt.

From the article:

"In the first five months of 2007 prices nationally decreased by 2.1%"

It seems that all around our little Island, housing markets have big questions being asked of them. Stories from as far away as the USA to places closer to home - Ireland and Spain. The threat of this credit crunch may be a nice scapegoat for the housing market to start a downturn, despite much agreement between economists in the past few years that the market is overvalued, we may now have the real possibility of a 'trigger' to reset fundamental prinicples.

Watch this space.

You have just managed to sum it up in three little words......

Because thats what everyone has been doing over the last two years in this part of the forum.

How many more articles have you lot got left to cling on to? Or is it just the same old recycled !!!!!!!! spurned out over and over again that fills you all with the feeling that one day it might just come true.

I find it amusing really, How much longer have we got to wait eh? The antisipation is driving me nuts.

I wonder if I come on here next month.... no, make that six months down the line will you all still be saying the same thing?

Till then keep all the "credible evidence" :rotfl: coming, its always worth a chuckle.

phlash

spurs_nut wrote: »

You have just managed to sum it up in three little words......

Because thats what everyone has been doing over the last two years in this part of the forum.

How many more articles have you lot got left to cling on to? Or is it just the same old recycled !!!!!!!! spurned out over and over again that fills you all with the feeling that one day it might just come true.

I find it amusing really, How much longer have we got to wait eh? The antisipation is driving me nuts.

I wonder if I come on here next month.... no, make that six months down the line will you all still be saying the same thing?

Till then keep all the "credible evidence" :rotfl: coming, its always worth a chuckle.

Its not an 'article' of someone's opinion, it is a factual report. What more credibility do you want?!

Ah yes, your credible 'opinion' must be right! :rolleyes:

pamaris

Personally, I think this "global credit crunch" that we keep hearing about is going to be a really big deal... I think that the correction in the global stock and credit markets is going to last a little longer than is comfortable– just long enough to get speculative "equity" and free, easy money out of the system for a little while. The bursting of the credit bubble is bound to have an effect on other bubbles such as our own housing market bubble (since the credit bubble has been fueling other bubbles).

Prices rise and fall on everything... gold, stocks, T shirts, Cabbage patch kids, beanie babies, tulips; why not bricks & mortar?

The financial markets are purging at the moment... once everything deflates and things are flat again, they will be on to the next big thing and it will all start over again. It is all to do with the madness of crowds or something.

hearts

The best evidence on how the housing market is doing is to quite simply walk out your door and up the street. Check out whats happening there.
Houses where I am are still rising. You can post all the articles you want but I will always go on the evidence of my own eyes. ;-)

Orion_3

Walking up your street doesn't help - the signs say 'FOR SALE' but seldom give you a price. Further, it's not how much they're asking for, it's how much people are willing to PAY. If everyone is accepting 10% under the asking price, then it's not a good sign for the market, regardless of what the 'evidence of your own eyes' are telling you.

You see a house selling for 200K, then after a month a 'SOLD' sign goes up... but there's no way of telling how much the vendors ended up accepting for the house.