We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Are you a crash troll?
Options
westernpromise
Posts: 4,833 Forumite
Having been observing crash trolls since 1996, I have noticed that they usually have a lot in common with each other. In my observation, the following views, beliefs and neuroses are sufficiently common among crash trolls for them to serve as identifiers:
1. They imagine that waiting 5, 10 or 20 years to buy after a dip is economically rational. If the price of a house doubled from £100k then fell 30%, the crash troll would consider the only smart trade available to be the one where you pay £140k later, rather than £100k now.
2. Because at all points in the above price path the crash troll would insist a crash was imminent, they never do buy, whether at £100k, £140k or £200k.
3. Crash trolls believe the only good times to buy were in the past, and always will be.
4. Relatedly, nobody who took a risk that paid off 10 years later took any risk at all. Buying today is stupid because there’s going to be a crash; in 10 years’ time, buying today will have been riskless, because everyone knew there wasn’t going to be a crash.
5. No crash troll ever works out the NPV of their future rents, or compares these to the cost of buying a property and selling it for £0. Crash trolls either never work out, or are in denial about, their BCR.
6. Crash trolls think that rising property prices mean an area is becoming less and less attractive to live in.
7. Other people’s gains from house price inflation are illusory. Losses from house price deflation are, however, real.
8. Crash trolls expect to be able to buy a house in the place they grew up in for 3x their own salary. If a family house in their town sells for more than 3x one national average salary, it’s a bubble.
9. Only crash trolls ever use certain terms: tulips, Ponzi, boomer. They are also keen on acronyms: TPTB, VI, EA, ZIRP. Many like to bandy around economic terms but none has any understanding of economics in general. Many are dismissive of economists, especially those who don’t forecast crashes.
10. Crash trolls think homeowners are greedy idiots, but would like to have bought in themselves at the prices of 10 years ago.
11. All economic policy is about keeping house prices high. Low interest rates serve no other purpose than to deny crash trolls a house.
12. Crash trolls think high house prices have been caused by low interest rates. Hence they must think that interest rates are different in different parts of the country; otherwise, there would also be a bubble in Stoke-on-Trent.
13. Buyers play no role in setting house prices. They just pay whatever sellers decide. Any price in excess of 3x one salary is "madness" (if the crash troll is talking about the buyer) or "greed" (if the crash troll is talking about the seller).
14. Crash trolls believe that mortgaged houses are legally owned by the lender. They believe that if a bank lends against a house, and the value of the house falls, the bank takes a hit to its balance sheet.
15. Crash trolls believe that selling a house at its current market value is greed, and that wanting it buy it for 70% less than its current market value is not.
16. Recessions are wholly benign. No crash troll ever loses their job in a recession. House prices will simply become affordable. Bigger deposits will not be required by lenders, nor will salary multiples shrink, nor will property availability fall, nor will rents rise.
I think if more than 3 or 4 of the above apply to you, then you are probably a crash troll. With that said, when I think of known crash trolls, it's very hard for only 3 or 4 of these to apply: either none do or the whole lot do.
Some crash troll features I have deliberately omitted. For example, while all crash trolls think that when house prices fall so do rents, quite a lot of non-crash-trolls think that too - so it's not an identifying feature in itself. For that reason I am not 100% sure #14 works, as some normal people believe it.
Are there any I’ve missed?
1. They imagine that waiting 5, 10 or 20 years to buy after a dip is economically rational. If the price of a house doubled from £100k then fell 30%, the crash troll would consider the only smart trade available to be the one where you pay £140k later, rather than £100k now.
2. Because at all points in the above price path the crash troll would insist a crash was imminent, they never do buy, whether at £100k, £140k or £200k.
3. Crash trolls believe the only good times to buy were in the past, and always will be.
4. Relatedly, nobody who took a risk that paid off 10 years later took any risk at all. Buying today is stupid because there’s going to be a crash; in 10 years’ time, buying today will have been riskless, because everyone knew there wasn’t going to be a crash.
5. No crash troll ever works out the NPV of their future rents, or compares these to the cost of buying a property and selling it for £0. Crash trolls either never work out, or are in denial about, their BCR.
6. Crash trolls think that rising property prices mean an area is becoming less and less attractive to live in.
7. Other people’s gains from house price inflation are illusory. Losses from house price deflation are, however, real.
8. Crash trolls expect to be able to buy a house in the place they grew up in for 3x their own salary. If a family house in their town sells for more than 3x one national average salary, it’s a bubble.
9. Only crash trolls ever use certain terms: tulips, Ponzi, boomer. They are also keen on acronyms: TPTB, VI, EA, ZIRP. Many like to bandy around economic terms but none has any understanding of economics in general. Many are dismissive of economists, especially those who don’t forecast crashes.
10. Crash trolls think homeowners are greedy idiots, but would like to have bought in themselves at the prices of 10 years ago.
11. All economic policy is about keeping house prices high. Low interest rates serve no other purpose than to deny crash trolls a house.
12. Crash trolls think high house prices have been caused by low interest rates. Hence they must think that interest rates are different in different parts of the country; otherwise, there would also be a bubble in Stoke-on-Trent.
13. Buyers play no role in setting house prices. They just pay whatever sellers decide. Any price in excess of 3x one salary is "madness" (if the crash troll is talking about the buyer) or "greed" (if the crash troll is talking about the seller).
14. Crash trolls believe that mortgaged houses are legally owned by the lender. They believe that if a bank lends against a house, and the value of the house falls, the bank takes a hit to its balance sheet.
15. Crash trolls believe that selling a house at its current market value is greed, and that wanting it buy it for 70% less than its current market value is not.
16. Recessions are wholly benign. No crash troll ever loses their job in a recession. House prices will simply become affordable. Bigger deposits will not be required by lenders, nor will salary multiples shrink, nor will property availability fall, nor will rents rise.
I think if more than 3 or 4 of the above apply to you, then you are probably a crash troll. With that said, when I think of known crash trolls, it's very hard for only 3 or 4 of these to apply: either none do or the whole lot do.
Some crash troll features I have deliberately omitted. For example, while all crash trolls think that when house prices fall so do rents, quite a lot of non-crash-trolls think that too - so it's not an identifying feature in itself. For that reason I am not 100% sure #14 works, as some normal people believe it.
Are there any I’ve missed?
0
Comments
-
Another important factor is that the crash cheerleaders tend to deny that housing affordability is regional/local they pretend its a national problem. They wont accept that a good chunk (and certainly at least half) of the country is cheap so much so that it will cost less to buy than to rent the local social home. This if no other reason should show that it is confirmation bias and herd mentality. Certainly over at the crazy hpc site I have never seen a thread about the north and midlands being good value and only really London being expensive its always patting each other on the back for seeing how over valued house prices are everywhere.
I think most of the crash wishers simply can not afford to buy. The primary reason is probably because they earn less and inherit less than the average full time worker yet don't realise this is the case. They also base their views and ideas on one income whereas most buyers have two incomes.0 -
westernpromise wrote: »Having been observing crash trolls since 1996, I have noticed that they usually have a lot in common with each other.
Having been observing crash trolls since 1987, I have noticed that sometimes they are right.0 -
Eric_the_half_a_bee wrote: »Having been observing crash trolls since 1987, I have noticed that sometimes they are right.
To quote a very respected individual.
"Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria"0 -
Eric_the_half_a_bee wrote: »Having been observing crash trolls since 1987, I have noticed that sometimes they are right.
Yes, just like a stopped clock.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
Eric_the_half_a_bee wrote: »Having been observing crash trolls since 1987, I have noticed that sometimes they are right.
The best way to be right about calling a crash is to forecast it every day for 30 years.0 -
Seems relevant.
This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
-
Actually there is one I missed: the belief that falling asking prices = falling values.0
-
Some others.“If you want to have a better performance than the crowd, you must do things differently from the crowd.”
“Invest at the point of maximum pessimism."
"The four most dangerous words in investing are ‘This time it’s different.’”
“If we become increasingly humble about how little we know, we may be more eager to search.”0 -
westernpromise wrote: »Actually there is one I missed: the belief that falling asking prices = falling values.
They tend to wet their knickers when month-on-month day shows a fall as well, not realizing that the data is somewhat noisy and they should be using at least a 3-month window instead."Real knowledge is to know the extent of one's ignorance" - Confucius0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244.1K Work, Benefits & Business
- 599K Mortgages, Homes & Bills
- 177K Life & Family
- 257.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards