**Don't Buy A House** House Prices Set To Crash!!!

dougk_2

Sorry I simply don't agree!

We are in a different world to 10 years ago or even 5.....Economic conditions are also different.

I truely believe house prices will increase slightly this year or at the worst stay level....long term they will increase but at a slower pace than the last few years.


I suspect most Sellers will only drop the prices if economoc conditions force the issue - mass unemployment and/or high interest rates - neither of which are on the cards at the moment.

dippy

You don't need to agree. The latest figures all speak for themselves. People always think it's the "NEW PARADIGM". Things are different this time, etc. etc. It all comes down to the fundamentals. Supply vs demand. Right now, the ratio of sales completed vs stock of property for sale is dangerously high. This figure is based on reality whereas asking prices are still based on people's expectations. The latter always lags the former.

dougk_2

As a sale / completion of a house typically take 10 weeks + the first article is talking about November / December which we already know was a poor time (and is seasonally weak) for purchases generally (include retail).

This item from hometrack contridicts the link above. As I said earlier you can read anything you like into figures!

"New buyers registered with estate agents rose by a massive 28.5% this month (-12.8% in January). While this is mostly a seasonal effect, the size of the increase suggests a revitalisation in the market. This is also confirmed by an increase in transactions this month. Agreed sales rose by an incredible 36% (-13.0% in January) and the average time to sell has fallen for the first time since May 2004, to 7.6 weeks.

While the supply of properties listed has also increased (19.8%), the discounts buyers are achieving from asking price have decreased slightly, indicating that the market is beginning to tighten. Average sales price as a percentage of asking price rose to 93.3% (92.7% in January’s survey), the first rise since April 2004.

Alongside easing price falls this month; more counties reported rises and stable prices. Seven counties reported price increases and 13 remained static. The counties at the top end of the scale were South Lincolnshire (0.3%), Surrey (0.3%), Greater Manchester (0.2%), Birmingham (0.1%), and Devon (0.1%). The counties reporting the largest price falls were Leicestershire (-1.3%), East Riding of Yorkshire (-0.9%), Staffordshire (-0.7%), Merseyside (-0.6%) and London - East (-0.6%).

Regarding cities, 30 out of the 54 listed remained stable or reported price rises. The top five were Warwick (0.7%), Bournemouth (0.2%), Gloucester (0.2%), Manchester (0.2%) and Middlesbrough (0.2%). The cities reporting the worst falls were Leicester (-2.3%), Chester (-2.0%), Stoke (-1.9%), Lincoln (-1.5%) and Sunderland (-1.0%).

John Wriglesworth, Hometrack’s Housing Economist, comments:


“After over eight months of housing market doldrums, the first signs of a robust recovery have appeared. A significant rise of new buyers, and an even more marked increase in agreed sales have stabilised prices, and an analysis of recent trends suggests the worst is definitely over in terms of price falls. We expect prices to resume their long-term inevitable upward movement before the end of the year, fully compensating for the recent falls.” "

“A more stable interest rate outlook, ongoing low unemployment, and rising household incomes will all help support rising house prices by the end of this year. Commentators, forecasting a housing market crash will soon have to again revise their forecasts, as the reality of a healthy housing market will undoubtedly increase the amount of egg that they already have on their faces.”

So as there is an increase in the number of registered buyers compared to the number of new houses listed (28.5% compared to 19.8%) isn't this a sign of an upturn??????

dippy

The only positive thing I can see in that hometrack report is the increase in agreed sales which seems to be higher than the increase in properties listed. Registered buyer numbers isn't in quite the same league as buyers with agreed sales. The rest is summarised in the hometrack report: National "fall of -0.2%, the eighth consecutive month that house prices have fallen".

It's meant to be the spring bounce and house prices are still falling. If the spring "bounce" doesn't materialise, the housing market is really in deep trouble.

dougk_2

You need more buyers to have more agreed sales - simple.

It appears the arrears falling were the ares rising before and the areas previously falling are now fairly static or rising

so a 2% or so fall over a year is deep trouble?????

I guess time we tell.

dippy

dougk wrote:

You need more buyers to have more agreed sales - simple.

That's exactly my point, you need more registered buyers to have more agreed sales but registered buyers does not automatically translate into more agreed sales. Hence my comment of "not in the same league". Buyers are waiting at the moment.

dougk wrote:

It appears the arrears falling were the ares rising before and the areas previously falling are now fairly static or rising

so a 2% or so fall over a year is deep trouble?????

I guess time we tell.

It's only the turning point. A lot of people think houses are overvalued (those referred to in the previous citywire article) which means that the market is being driven by sentiment. Right now, we're having -0.4% to -0.2% falls and there are increasing numbers of properties for sale (quite a lot more than this time last year which was still a boom period) and falling numbers of mortgage lending, sales, etc. What will happen if the spring boom doesn't materialise? Spring is the period that all seasonal adjustments by the likes of halifax, nationwide favour over others.

dippy

Have a look at this: http://news.ft.com/cms/s/dc3c998e-9535-11d9-bc72-00000e2511c8.html

"Estate agents have on average a third more properties on their books than they did a year ago as interest from potential buyers remains tepid."

" Milan Khatri, Rics chief economist, warned: “I am very reluctant to say that the property market has stabilised. It is still a very weak market.”

Buyers were spoilt for choice and therefore had great negotiating power.

Many people were continuing to sit on the sidelines as a result of renewed uncertainty over interest rates, he added."

dougk_2

Also quoted.

“Interest rates are the single most important factor. If they go up again, the market will . . . flatten out,” said Mr Khatri.

"In London, which had the slowest rate, annual inflation picked up from 3 per cent in December to 5 per cent in January."

Flatten out means level - where is a crash ?

It also indicates that annual increases in London are rising.

Yes buyers have more negotiating power at present - surely this is a good thing for buyers and indicates a GOOD time to buy. When in a few months time there are less properties available they have less choices and less chance of negotiating.

vishpatel

Doug, Doug, Doug...

AFFORDABILITY is the key factor in whether its a good time to buy. So as the market appears to have peaked last June that was probably the WORST time to buy.

Just because we've seen a little dip since then, doesn't mean it's a GOOD time to buy yet. It's BETTER, but a long way off GOOD.

I hope I'm being clear.

dougk_2

Well as I don't believe prices will fall it won't get any better.
Its best now whilst you have choice.... once houses start selling again, then the choice will be gone.

I still beleive houses are affordable if you scrimp and save like FTB's have ALWAYS had to do. You have to give up pleasures (including the gym etc) so you can afford it.... simple really!