Housing market continues to slow....

dougk_2

deemy2004 wrote:

3% is applied to every thing not to pick and choose.

Not strictly true is it?..... the inflation rate is set by what the Government (or perhaps someoneelse?) choses to include.

In real terms Food and Electronics have been falling not rising (just look at the price of a loaf of Basic bread or the price of a DVD player or TV). Those markets haven't collapsed but have got stronger.

Two much is based on "growth" rather than the status-quo. I.E. companies have to make more profit rather than stay level - why? Profit is just that profit!

meanmachine_2

dougk wrote:

In real terms Food and Electronics have been falling not rising (just look at the price of a loaf of Basic bread or the price of a DVD player or TV). Those markets haven't collapsed but have got stronger.

Doug, you're not seriously comparing consumerables to property are you?

With so much personal wealth and aspiration tied up in property, a falling housing market makes people "feel" poorer.

If a telly drops in price from £399 to £299 I feel richer.

Of course none of us should worry about falling house prices. The only people who lose out are EAs.

dougk_2

EA's won't loose out - they will just up the amount they charge for comission to 2% or 3%!

When the price of TV drops I feel P'd off as it always happens just after I bought one

bridiej

dougk wrote:

When the price of TV drops I feel P'd off as it always happens just after I bought one

Glad it's not just me that that tends to happen to!!!

loanranger_4

I think that it is going to get very interesting once the inflation arrives at or even goes below 0%.

However as others have pointed out, before that happens interest rates are expected to have gone down to help compensate. I dread to think what would have happened to the housing market had rates continued to rise to over 5% as originally predicted.

deemy2004

Interest movements depend on inflation

The problem is inflation is in an uptrend , hence with inflation still in an uptrend the likely direction for interest rate is still higher.

Only well inflation (CPI) stops rising and starts fallign, can we start to contemplate lower interest rates.

There are too many things tugging in different directions to make sense of where interest rates are headed i.e. USA rates are still on the rise... Euro rates are expected to fall to pull the economy out of stagnation.

UK rates are piggy in the middle ? Where do they go ? Probably stay put for most of the rest of this year...

nelly_2

must admit the misses and I save very little and spend a lot, but money and life is for enjoying in our opinion, so thats the path we choose to take.

meanmachine_2

nelly wrote:

must admit the misses and I save very little and spend a lot, but money and life is for enjoying in our opinion, so thats the path we choose to take.

Yeah, there is a tendency to put your life on hold while you keep an eagle eye on what the housing market is doing.

I can imagine being in the same position for YEARS, even if house prices start falling. I'll convince myself no no, wait just another month, then the property you like will be even cheaper! Do nothing, put everything on hold, wait a little but longer.

Of course, that thinking is why house prices, once/if they do start to fall, will continue to do so. Why buy when houses might be that little bit cheaper next month?

I've told myself that should there be a correction I'll wait until prices are 30% below where they are today, then jump in. Even if they continue falling, it's better to leave a little bit of profit for the next guy.

t_i_g_e_rr

With the news from Nationwide (and then everyone else) saying that house price look as though they will be OK, soft landing, etc, it set me wondering: Have mortgage lenders or estate agents ever predicted a crash? I mean, it doesn't seem to be in their interest. In this case, listening when they tell us what HAS happened in useful, but listening to their FORECASTS is possibly pointless. Does anyone know what they were saying just before the last crash? If they were saying 'soft landing', 'soft landing' then...

deemy2004

YES !

I posted exactly news from the housing market during the last crash.. basically as prices fell the estate agents were all saying how its a great time to buy !

What stuck in my mind was the channel tunnel !

Estate agents were saying how the channel tunnel would be great for housing ! Infact some mere months on the houses linked to the tunnel fell by by 20% !!!!!!!!!!!!

I will bump the thread.