House Price Crash Discussion Thread

jamescredmond

neas wrote: »

I just wanted to put things in perspective... people sometimes put too much value on money... money is there so you enjoy your life. We only live short lives really so as humans its best to make sure you enjoy it.

And just so you know im intending to start a family before I get my First home. The market is volatile, i could buy now but intend to stash the deposit over another year or so along with getting married lol. I think everyone is in agreement that house prices wont bottom out over night... it'll take at least 2 years maybe up to 5, I will be sensible in my first purchase but I won't put my life on hold while i wait.

one of this thread's more sensible posts. 20 yrs ago I could have got close to repo, but didn't. we lived on baked beans and got green with envy every time we saw a sports car or walked by a packed restaurant. as luck would have it I was married to a woman who thought as I did, and said 'stuff this conspicuous consumption all around us. let's try to drag the mortgage down.'

today, our prop. assets = 600k+. whoopey dooes!!!

but this equity is all 'accidental wealth'. we certainly didn't earn it!!

anyway, the value of our 'assets' will IMO fall, using responsible analyses, by 20%, say, over the next 2 years. I say GOOD!!

we never set out to make a killing on what is - and will always remain - a human necessity.

we'll still be quids in, even if the market drops further.lucky us.

I say 'good' because capitalism doesn't always work to the benefit of everyone.

and right now it doesn't seem to be working too well for you.

chin up. and head down. get on with life until the opportunity presents itself.

won't be long now.

neas

pickledpink wrote: »

That's all well and good, Neas. And it's refreshing to know that you realise the importance of owning your own home - which is why you are saving up for one.

It's a lovely warm feeling knowing your childrens future is secure and you will one day leave them a wonderful legacy to help them improve their lifestyles.

It's a satisfying feeling to know you're King of your own Cstle - it makes for a better family life.

I'd partially agree with this..

However houses are good to have, eventually it will save you money (once the mortgage is paid off)... i.e when you starting to get near retirement age.
They are not required however to live or to have a family and....

Unfortunately the only time you are really king of the castle is after 25 years of paying the bank back.... you are always X% king of the castle... being that the bank really owns the house and you are paying them back for it... so until you are mortgage free you are not truly king of the castle and anything like an accident will dash that misconception.

MissMoneypenny

pickledpink wrote: »

It's a lovely warm feeling knowing your childrens future is secure and you will one day leave them a wonderful legacy to help them improve their lifestyles.

What if your children don't like you enough to look after you when you are older pickledpink? They might prefer you to spend your money on an old peoples home, rather than look after you themselves.

pickledpink wrote: »

It's a satisfying feeling to know you're King of your own Cstle - it makes for a better family life.

Are you mortgage free? If not. then it isn't your castle, it's your lenders castle.

carolt

neas wrote: »

I just wanted to put things in perspective... people sometimes put too much value on money... money is there so you enjoy your life. We only live short lives really so as humans its best to make sure you enjoy it.

And just so you know im intending to start a family before I get my First home. The market is volatile, i could buy now but intend to stash the deposit over another year or so along with getting married lol. I think everyone is in agreement that house prices wont bottom out over night... it'll take at least 2 years maybe up to 5, I will be sensible in my first purchase but I won't put my life on hold while i wait.

Very wise.

Sometimes the economic cycle is out of sync with your life cycle, and then you have to decide which is more important to you.

I'm sure you've made the right decision; good luck with your future.

PasturesNew

I want a house because you can buy those.
You can't buy love.

I want to own a house so I can close the door and get on with things, knowing that I can buy a few things without wondering how/when I might have to pack it all up and move again.

For now, renting suits me. I've no job, no ties, no plans. But once I've found an area I like and have a job that's likely to last, then I'll buy something sweet and cosy.

For me, I am not so much "waiting for the crash", just observing and seeing the crash time as my time-frame to find the area/job I want to be in. If there were no crash, I'd be feeling the pressure to put down roots that I might regret as that would make me immobile again... and I've already been tied down by a house once.

Renting is fine if you're in social housing as you don't get moved on. But renting isn't fine if you're approaching retirement and have from, say, 60-95 years of age to keep moving about.

carolt

Sorry to interrupt the love versus money debate:

http://www.ft.com/cms/s/0/4ffaeb18-00eb-11dd-a0c5-000077b07658.html

The bit that really caught my eye was:

"Since 1988, US house prices have risen 155 per cent; UK prices, in spite of a slump in the early 1990s, have risen more than 300 per cent. :eek:
House prices peaked at five times average earnings in the UK’s last bubble: they have peaked at 5.75 times earnings this time round."


So if the US has fallen 12.6% over the last year, how low will we go???!

neas

it reckon its going to be an exponential decay like a snowball .

More people awaken to fact houses dont all increase, more panic and try and sell...

I believe we are in stage 1: Forced by mortgage lenders and the credit crunch... money has dried up, they won't lend as much to fuel the house prices so people are starting to undercut one another.
Stage 2: I believe we are heading into this now... people are becoming more aware of the fact houses can go down and because of this try and get out before its too late... injecting more houses into the market thus accelerating the crash.
Stage 3: People start handing keys in as they realise its more cost effective to quit their house than keep going into negative equity... or they can't keep up with the monthly repayments. This destroys all confidence in the housing market for years to come.

PasturesNew

neas wrote: »

This destroys all confidence in the housing market for years to come.

This is the bit many don't get. It's not like a fairground where it rains for a day or two, then the sun comes out and everybody rushes in to try the rides out.

Once the confidence has gone, it takes a few years for people to venture back into thinking buying a house is a good idea.

So if it takes 5 years to the bottom, it won't take 2 years to be up to today's value again.

More like to be 5 years down, 3 years wallowing, 5 years to get back to today's values.

jamescredmond

PasturesNew wrote: »

This is the bit many don't get. It's not like a fairground where it rains for a day or two, then the sun comes out and everybody rushes in to try the rides out.

Once the confidence has gone, it takes a few years for people to venture back into thinking buying a house is a good idea.

So if it takes 5 years to the bottom, it won't take 2 years to be up to today's value again.

More like to be 5 years down, 3 years wallowing, 5 years to get back to today's values.

a reasonable expectation.

my guess, though, is that the fall may complete in 2-3 yrs, then flat-line for- as you say- 5yrs.

the slow realisation that the party is well and truly over hasn't happened to everyone. some still insist on staying put in their 5-bed with stunning views of open countryside in the southern hemisphere of planet zog.

their 'back to earth' moment will happen before the end of this year, and that's when the fun will really start.

kymrob

i noticed in my local free paper that alot of reduced propertys where popping up!