Housing market continues to slow....

meanmachine_2

I'm just asking for valid reasons why a market driven by sentiment won't take a downward spiral, despite all other evidence (both current and historical) to the contrary.

Why would a market heading down simply stop at 0% and stay there?

Seriously. I'd like to hear some valid reasons. After all, I'm not going to stay out of the market forever. Although naturally I'm relieved I haven't bought yet.

dippy

The Halifax non-seasonally adjusted change this month was 0.5%, compared to 3% last year and 1.8% the year before. Overall for this year (from Jan 2005), the halifax house price index is only showing an increase of 2.7%. We'll see how long it takes for that figure to go negative.

The headline news on yahoo is already "House prices plummet during May" and "House Prices Heading For The Floor"

Joe_Bloggs

If you are a mortgage holder,the 'home owner' tag is premature, then the prospect of falling house prices means that you cannot afford to sell and realise you negative equity. Only the lenders of the repossesed, the buy to let merchants and the relatives of the recently deceased will be tempted to sell. The supply side of the market will be constricted in my view. The incentive for builders to release their stocks of land and build on it will be less.
In saying that there are hundreds of half built flats still under construction in my area.
J_B.

rchddap1

Not sure where house prices will go in the future, but here is a bit of info from my area (border between South Easy & West). We live on a new estate (2 - 3 years old) and over the past few months quite a few houses started to come up for sale (people taking the profit from buying a new build). However, I have had my eye on one house in particular. It is a 3 bed and was originally up for sale for £200k. However, the vendors have recently reduced the price by £10k.

House prices in my area stoped rising a few months ago and I'm starting to wonder if they may actually be on the downward slide.

meanmachine_2

Joe_Bloggs wrote:

If you are a mortgage holder,the 'home owner' tag is premature, then the prospect of falling house prices means that you cannot afford to sell and realise you negative equity. Only the lenders of the repossesed, the buy to let merchants and the relatives of the recently deceased will be tempted to sell. The supply side of the market will be constricted in my view. The incentive for builders to release their stocks of land and build on it will be less.
In saying that there are hundreds of half built flats still under construction in my area.
J_B.

That's a good point.

If you're monied and prices aren't your main priority then now is a good time to buy. Plentiful supply and no other buyers to have to race against. I wish I was in that position, I really do. I could also haggle at least 15% off any asking price and think that I'd bagged myself a bargain.

In reality, like most people, I'll have to wait until prices have dropped and they're in my (and other people's) reach again. At that point, supply will have dipped.

But with the economy taking a downward turn (as it inevitably does when house prices plunge), forced sellers are the next inevitablity.

And that drags the market down even lower.

We'll see. I certainly won't be gloating over people losing their homes. But I think it's about time that sanity was restored.

dippy

Joe_Bloggs wrote:

If you are a mortgage holder,the 'home owner' tag is premature, then the prospect of falling house prices means that you cannot afford to sell and realise you negative equity. Only the lenders of the repossesed, the buy to let merchants and the relatives of the recently deceased will be tempted to sell. The supply side of the market will be constricted in my view.
J_B.

From memory, BTL have replaced a lot of FTBs and now account for approximately 20% of mortgages taken out every year.

If only forced sellers are actually carrying out transactions, this will reflect itself on nethouseprices and rightmove (which now provide land registry data) and this will have an effect even on asking prices.

dippy

In the original annoucement, Halifax, the biggest mortgage lender in the country, are predicting a 2% fall in house prices this year .

dougk_2

And Nationwide a 2% increase

dippy

I thought Nationwide was the second largest mortgage lender in the country but they are actually third.

meanmachine_2

dougk wrote:

And Nationwide a 2% increase

"House price rises predicted this year
HOUSE prices remained almost static between January and February, indicating that the market has finally bottomed out, the Nationwide Anglia Building Society reported yesterday."

Yep. I always trust a vested interest when it comes to predicting the property market.

Sadly this prediction was from 1991. D'oh!