Are house prices falling?

slater14

On housing being overvalued I agree with eurows and Deemy (was meanmachine up there? and you too meany if you were!).

What I dont like is the word "greedy" for sellers. They are only selling something for what they have been told it is worth or feel they can get for it....and which one of us wouldnt do that!

Getting back to the real issues -

1. Will there be a crash or correction or slowdown?
2. Will there be stagnation?
3. Are houses overvalued?

To answer all brifely - 1. Yes 2. No. 3. Yes

Until we return to 3.5 income as a guide for purchasing, then housing is indeed overvalued.

To look at housing at the moment, its looks like we're running between 5 and 6 times income. That doesnt sound much, but it is MASSIVE.

We cant stagnate as that would lead us into decline (the opposite of growth which Mr Brown is trying to steer us towards).

I read a post from someone who did the number on stagnation and it looks like houses will need to remain flat (at current value) for 14 years for this to be achieved. That is very doubtful (too many variables, interest rates, economy etc).

Rightmove have just released their monthly report and theres some grim reading in that.

Plasticman

kingshir wrote:

Have been advised to repost my question on this site. Sorry if you've already read it

I am buying a small property in Coventry and am almost at the exchanging contracts stage BUT I keep hearing,seeing & reading that prices are beginning to fall. The estate agent that is dealing with the sale is telling me that prices are stable but another agent that I rang to check with says prices have fallen a bit! I don't want to buy now only to find I could have paid substantially less in a couple of weeks! Anyone care to comment please?

Prices have already dropped slightly in my area - who knows if they will drop further, remain static or start to rise again. If you are buying this property as your home then does it really matter if the price drops? It will increase again over time. The only problem would be if you were over committing yourself and could not afford repayments if money gets tight.

PinkLipstickBabe

trafalgar wrote:

try this one and then clcik the sold prices section

http://www.rightmove.co.uk/rm/

That link worked, thank you! :j

rizla01

Prices are Stable in most areas but an influx of props determines that there are more sellers than buyers, hence a degree of haggling going on, efectively reducing values.

This could change in as little as one month and the trend could reverse, especially now that the Election fiasco is over (Elections always play a significant part in the housing market for the run-up).

Could still go either way but I am a property investor and I am still buying, if thats anything to go by.

Incidentally, you are talking about buying a small property in which case any fall is likely to be likewise - small. Personally I suggest you be led by your heart and not your (Or other peoples) head on this one.

Whatever you decide, GOOD LUCK!

Riz

ribenagirl

I live near you Kingshir and I have noticed that house prices just around us (Kenilworth) seem to be continuing to rise - but they are NOT selling so it is only a matter of time before they drop back a little. I think it's the estate agents trying to keep overinflating the market personally.

It seems to be local thing maybe?

dippy

According to rightmove, house prices in London, the SE and SW, are already lower in may this year than in may last year. Year-on-year falls are a lot worse than month-on-month falls.

lisyloo

This is of course my opinion only.

I think you are buying at a point where prices are historically high, so there has to be a risk a falls.

However you are WAY out on your timescales.
You are not going to save substantial amounts by waiting a few weeks.

If there are falls it will take many years to play out, so you have to ask yourself whether you are wiling to wait years.
I thought this through and I decided to buy 2 years ago because I wasn't prepared to wait many years.
And waiting is a RISK because there is no guarantee.

The housing market is NOT liquid.
A house is not like a share certificate that you can take to a bank a 9:00 and sell by 9:05 a.m.
It's takes months and sometimes years to sell houses, hence any movements will take a long time to come through.
We've had boom for about 10 years. If we get bust, then it will be 5-10 years.

All in my opinion of course.

eurows

If your an investor you would not be buying unless your a foolish investor. There are many better ways to invest your money now. A clever investor would be moving out. See the ft.com site for more stories of investors in property that wish now they had not.

rizla01

eurows wrote:

If your an investor you would not be buying unless your a foolish investor. There are many better ways to invest your money now. A clever investor would be moving out. See the ft.com site for more stories of investors in property that wish now they had not.

If I'm considered a foolish investor then I would not have profited by 34k already, on purchases and sales made this year, let alone the two properties purchased for less than 60k and improved to a value of more than 90k for an outlay of just 3k and 4k respectively, which I now rent out for a return of £600.00 PW. and this is on top of the sales made for which I will, admitedly have to pay Capital Gains Tax on.

Don't judge all investors the same and don't believe everything that you read.

If you had believed all of the stories spread around during the recession then how do you explain that I started a business at the beginning of the recession, built it up DURING the recession and sold at a profit after the recession?

meanmachine_2

rizla01 wrote:

If I'm considered a foolish investor then I would not have profited by 34k already, on purchases and sales made this year, let alone the two properties purchased for less than 60k and improved to a value of more than 90k for an outlay of just 3k and 4k respectively, which I now rent out for a return of £600.00 PW. and this is on top of the sales made for which I will, admitedly have to pay Capital Gains Tax on.

Good for you. I wonder how much money you'll make during the impending price "correction".

Or whether you'll lose everything you've made. Doesn't it worry you? It's a serious question. In a falling property market how exactly do you make money? Or do you give it all up and go into some other investment area?