HPC thread of the week

westernpromise

Crashy_Time wrote: »

Don`t over think it, you just need to take away two things; Prices can fall, and you are too attached to property as an investment. Understand those two and you will do OK.












Oh, and stop posting s*hite about "Supply and demand", even the MSM have caught on to the price being determined by credit availability in the past (And no, you are not getting a link)




:rotfl:








While you`re at it you could wake up and sniff the coffee, do us all a favour :money:

No offence, but when it comes to my own money I only listen to the opinions of people with a track record of usually being right.

westernpromise

Jason74 wrote: »

Crikey Crashy, the arrogance in your posts is remarkable given how wrong you've been over the years. Even if the tide is now turning your way (a big if), a little humility would be wise given your poor forecasts so far.

People on Usenet were insisting in 1996 that the property market had further to fall. Some were still in denial about having been exactly wrong ten years later.

The thing is that if you speculate against property by renting rather than buying, the longer you're wrong for, the bigger the crash you need.

If you bought at 1996 prices, you're now 80% of the way through a mortgage that has been repayable at ever falling rates. If you rented since then, you not only need the price to return to the 1996 level; you need it to fall below that price, to a level where buying it today and owning 80% of it works out better than buying it back then.

Depending on how long ago you called this wrong, you may need a crash of more than 100% for your mistaken position to look ex post like it was ever sound judgement.

This is quite a hard admission for most people to make; it is easier to clutch at straws and imagine that you're about to be vindicated, or that other people will lose .

chucknorris

westernpromise wrote: »

Depending on how long ago you called this wrong, you may need a crash of more than 100% for your mistaken position to look ex post like it was ever sound judgement.

This is quite a hard admission for most people to make; it is easier to clutch at straws and imagine that you're about to be vindicated, or that other people will lose .

I think this compares to something like being a compulsive gambler or an alcoholic and having to stop, I am neither of those, but until recently I was drinking more than I should have. So I do know from personal experience how difficult it is to accept that you have been doing something wrong (in my case for decades|) and change, what you have to do is to accept that you were wrong, forgive yourself and move on. But it is much easier said than done, luckily I recently went for liver, gall bladder and kidney ultrasound and blood checks, and I amazed both myself and my doctor by coming through it with flying colours, so I somehow got away with it. But (especially at my age) I knew that it was time to stop, or face the consequences, I've averaged 25 (from about 90) units a week for the last 3 months, I want to get down to about 18-19 units per week, so there is still more progress required.

padington

chucknorris wrote: »

I think this compares to something like being a compulsive gambler or an alcoholic and having to stop, I am neither of those, but until recently I was drinking more than I should have. So I do know from personal experience how difficult it is to accept that you have been doing something wrong (in my case for decades|) and change, what you have to do is to accept that you were wrong, forgive yourself and move on. But it is much easier said than done, luckily I recently went for liver, gall bladder and kidney ultrasound and blood checks, and I amazed both myself and my doctor by coming through it with flying colours, so I somehow got away with it. But (especially at my age) I knew that it was time to stop, or face the consequences, I've averaged 25 (from about 90) units a week for the last 3 months, I want to get down to about 18-19 units per week, so there is still more progress required.

It's more akin to the gambier. The gambler has lost something and evolution tells them to go back and find it. Chasing the loss in a game where it can't be found is the simple way to lose your shirt.

chucknorris

padington wrote: »

It's more akin to the gambier. The gambler has lost something and evolution tells them to go back and find it. Chasing the loss in a game where it can't be found is the simple way to lose your shirt.

That's exactly why I said so, as a part time racecourse bookmaker for more than 30 years, I've seen gamblers chasing many times, in poker they call it being on tilt, I've never actually played poker though (chess is more my game)..

padington

chucknorris wrote: »

That's exactly why I said so, as a part time racecourse bookmaker for more than 30 years, I've seen gamblers chasing many times, in poker they call it being on tilt, I've never actually played poker though (chess is more my game)..

I love chess too. I nearly beat John Healy once but he was playing 12 other people at the same time.

Crashy_Time

padington wrote: »

I love chess too. I nearly beat John Healy once but he was playing 12 other people at the same time.

Did you still try to punt him a mortgage?

chucknorris

padington wrote: »

I love chess too. I nearly beat John Healy once but he was playing 12 other people at the same time.

I've never played in a simul before, are you a member of Wood Green Chess Club? It has some very highly rated players, including Michael Adams (although I suspect that he and others are just mercenaries for the 4NCL), isn't it one of the strongest chess clubs in the country?

mwpt

There is a thread now on HPC subject "Aging Out And Tired Of Waiting For A Crash".

It's this sort of thing that makes me feel really angry and sorry for people being priced out of the owning a home. There are a few points here, I want to present a balanced view (in my opinion).

- That person is going to be given one sided advice on that thread. He/she has followed that same one sided advice for years and is far far worse off for it. Yet this will not be mentioned or tolerated on the site. All because the crash is always "just around the corner".

- On the other hand, I myself viewed the property market in the UK as overvalued LONG before I ever found a site called housepricecrash or even this site. IF the government had not bailed out borrowers through lowered interest rates, FLS for the banks, and various other demand side schemes, people like myself who independently came to the conclusion, may have finally had the chance to buy at value. I should have done so in 2009 but in the areas of London I looked at, prices stood still rather than lowered. So I was wrong, but I can see that there are reasons I was wrong. I finally realised I could not fight those reasons and had to take the plunge as I got older.

- My point above is that most people who feel the market is overvalued are not being any more selfish that someone who buys into the market. They are just people trying to make the most of their finances and make sensible investment decisions. Sure, they may have made wrong decisions but the problem is the UK housing market, not the people.

If I could still post to HPC my advice to that chap on the thread would be that he has to start thinking in terms of probabilities and hedging. In the end my decision came from viewing the likelihood of a crash vs the likelihood of the government forever trying to support prices. Now if HPI of (say) > 5% is certain, then by far my best decision would have been to leverage up to the absolute max I could do and watch the equity in the house exceed the huge mortgage repayments each year. On the other hand, being naturally cynical and not believing in a free lunch, I had to let my risk averse side in to the decision. I now own a moderate house in an area where the houses are quite nice but the area (high street) is pretty dull. I can afford the repayments way above the 7% checks. I now have a hedge against positive HPI and a lesser hedge against negative HPI, in the sense that I have a lot of equity left over in shares and cash, while my house tanking in value won't ruin me. In this event I will look at the opportunity to upsize.

Of course I had another alternative which was to prefer to live a better life right now, remaining in my old very up market area renting for pretty decent value (as opposed to what I'd pay on a mortgage) - and there isn't anything wrong with this approach in the short term. Long term, different story.

But I wonder if the poster on HPC will hear anything like that?

mystic_trev

mwpt wrote: »

There is a thread now on HPC subject "Aging Out And Tired Of Waiting For A Crash".

It looks like the threads been kicked into the long grass i.e. anecdotals. Usual form from the [STRIKE]Stazi[/STRIKE] Moderators over there.