House Price Crash Discussion Thread

van_persie

Vincenzo wrote: »

I remember an awful lot of people sold properties and rented in the 2004 blip, waiting for the market crash, only to find themsleves a rung or two down the ladder.

I presume, if you are so sure, you have sold up and are renting?

Good luck.

I sold one of my properties in 2005 - the proceeds have been invested elsewhere and the returns have FAR exceeded those that property have offered in the interim; yes, there was a bear trap but you could argue it was followed by a bull trap where everyone thought it was safe to pile back in. It wasn't. It isn't.
Gains made between 2005-2007 will be wiped out by the end of summer...

Generali

van_persie wrote: »

I sold one of my properties in 2005 - the proceeds have been invested elsewhere and the returns have FAR exceeded those that property have offered in the interim; yes, there was a bear trap but you could argue it was followed by a bull trap where everyone thought it was safe to pile back in. It wasn't. It isn't.
Gains made between 2005-2007 will be wiped out by the end of summer...

If you're in the Dow Jones then capital gains pretty much have been destroyed.

If things keep going as they are then investors in the US index will see 2 years wiped out entirely (including dividends) by about Wed or Thur of next week.

I've been following Stephen Roach (Morgan Stanley economist) with some interest recently.

van_persie

Generali wrote: »

If you're in the Dow Jones then capital gains pretty much have been destroyed.

If things keep going as they are then investors in the US index will see 2 years wiped out entirely (including dividends) by about Wed or Thur of next week.

I've been following Stephen Roach (Morgan Stanley economist) with some interest recently.

Nope. Gold and Euros. Plus a few safe, sterling bonds.
My timing on gold & Euros was fortunate, to say the least...question is, when to liquidate.

Generali

It's a difficult one. The US consumer seems to be [EMAIL="f@~*ed"]f@~*ed[/EMAIL] which is a big problem - there'll be plenty of stocks out there with a great yield until their price falls off a cliff.

Hopefully Berkshire Hathaway will get dragged down in price along with everything else and you can pick up a couple of their shares on the cheap.

dopester

Aren't Berkshire Hathaway priced up around $133,805 a share?

What happens when Buffett retires or pops his cloggs?

Their firm was built on his (and a few other close associates) niche intelligence, learning, wisdom, and the ability to spot hidden value which isn't taught at University.

He probably has already taken measures to bring right people in to run Berkshire Hath, but GEC to Marconi would be my fear. I'd be looking to find the next BH, not investing after it's decades of stellar performance.

Vincenzo

van_persie wrote: »

Nope. Gold and Euros. Plus a few safe, sterling bonds.
My timing on gold & Euros was fortunate, to say the least...question is, when to liquidate.

Yes, but I presume you did not gear your investments in Gold and Euros?

Besides I am not arguing that there are not good alternative investments out there. Simply that there are still good opportunities in property. In fact, in my view, the current market presents better opportunities than it did a year or so ago. With rising rents and 'motivated sellers', I will be keeping my eye open for a bargain.

My main concern with this thread is that many people are making very bold and seemingly informed statements about what is or is not going to happen. Not everyone who reads this forum is at the same level of economic awarewess and I would hate to think that someone would act on much of the 'advice' given here (inlcuding my own!).

Generali

Vincenzo wrote: »

Yes, but I presume you did not gear your investments in Gold and Euros?

Besides I am not arguing that there are not good alternative investments out there. Simply that there are still good opportunities in property. In fact, in my view, the current market presents better opportunities than it did a year or so ago. With rising rents and 'motivated sellers', I will be keeping my eye open for a bargain.

My main concern with this thread is that many people are making very bold and seemingly informed statements about what is or is not going to happen. Not everyone who reads this forum is at the same level of economic awarewess and I would hate to think that someone would act on much of the 'advice' given here (inlcuding my own!).

If you invest £100ks on the basis of what someone writes on an internet forum then you will find many unusual and interesting ways to lose your money I'm sure.

Turnbull2000

HammersFan wrote: »

I'll give you some logic and reasoning if you like. Over history houses have gotten more expensive as society, and people in general get richer, and houses become shorter in supply. House prices may be over-valued, but they may not. Only time will tell. If people hold off buying, that tends to lead to pent up demand in the market and stimulates fast growth when people start buying again. A lot of the evidence people post a about a crash is pretty flimsy. House prices are still about 4% higher than this time last year. I'll admit there is next to no growth but next to no crash either.

You simply dismiss people's arguments that don't concur with your own. That isnt a debate. House prices may crash, but its not certain. Also, I wouldn't want to give the impression that I want massive house price growth either - I want to buy a bigger house and rapid growth makes that harder for me. but there is little I can do about price movements apaprt from try to get myself a good deal in wahtever market I choose to buy in. I just find that some of the posts by people wanting a crash a little dramatic to say the least - and left unchallenged that gives a distorted view.

No, I dismiss comments such as "Someone buying today gets a house to live in - and if they can afford the payments, what's the problem if prices fluctuate a bit.". It completely disregards the issues that have been discussed on this and numerous other financial/economic forums.

HammersFan

Turnbull2000 wrote: »

No, I dismiss comments such as "Someone buying today gets a house to live in - and if they can afford the payments, what's the problem if prices fluctuate a bit.". It completely disregards the issues that have been discussed on this and numerous other financial/economic forums.

Thanks. Most informative. The intellectual cut and thrust as sharp as ever.

van_persie

Vincenzo wrote: »

Yes, but I presume you did not gear your investments in Gold and Euros?

Besides I am not arguing that there are not good alternative investments out there. Simply that there are still good opportunities in property. In fact, in my view, the current market presents better opportunities than it did a year or so ago. With rising rents and 'motivated sellers', I will be keeping my eye open for a bargain.

My main concern with this thread is that many people are making very bold and seemingly informed statements about what is or is not going to happen. Not everyone who reads this forum is at the same level of economic awarewess and I would hate to think that someone would act on much of the 'advice' given here (inlcuding my own!).

Today's 'below market value' bargain is tomorrow's 'market value'. It's a falling market with a way to fall, IMHO.
I agree that anyone acting purely on advice given here is extremely naive, but it shouldn't stop people posting their opinions, be they ill-thought out or well-researched; at the very least, it's quite entertaining!

(re: Gold & Euros, I invested quite heavily in these a year ago - a gamble that paid off but am building property in Europe so it's not purely speculative. I am hedging...)