Housing market continues to slow....

bridiej

LOL meanmachine!!

(p.s. It's Bridie not Birdie!!)

Pheno

bridiej wrote:

All points of view are valid - even though I seem to have deja vu of having this same conversation about house prices every week!!

Bridiej

If you were hearing a discussion of Halifax's -0.5% May figure last week please let me know where I can get this info!

bridiej

Pheno wrote:

If you were hearing a discussion of Halifax's -0.5% May figure last week please let me know where I can get this info!

You know what I mean! :rolleyes:

Woby_Tide

meanmachine wrote:

But come on then Woby, as a FTBer, you must be desperate for me to open my wallet. What compelling arguments have to got for me that will persuade me to buy at the present time?

I've already stated before on the previous topics about this, it's peoples own choices, if they wish to purchase a home that is right for them in their cirumstances and iin their interpretation of the market at this time, then so be it. If it's not for them, that's their choice too. I just find people stating facts in isolation(and normally on a national level) to be clouding the issue. I'd personally be looking at the inidividual areas in question before then factoring in the overall national picture on a decision. Not the other way round. But we already know you're views and thats your decision, I'm not arguing with that.

deemy2004

if the consumer spending is crashing whilst the housing market slows... what will they do when house prices start going negative ?

There is already talk about a recession in retailing which is the largest industry sector (if you can call it industry :rolleyes: )

Its the chain reaction that will shuv house prices lower sharply EVEN IF interest rates are cut !

Usually during the up phase and the sideways phase, most of the market paricipants, both bulls and bears develop tunnel vision... which is the case with the housing market where the only item that people are really looking at is interest rates.

But usually its something else literally out of the blue ! which comes and delivers the knock out blow ! or blows !

With the housing market that increasingly appears to be consumer spending.

And not to forget an almighty credit crunch that is brewing due to the enormous level of debts !

People really STILL do nto have a clue what is going to hit the housing market or even why .... interest rates are a red herring - YES they did slow the market down... but they won't be the factor that delivers the knock out punch ! Perhaps it is somethign that even I am not aware of yet ! so surprise everyone ?

What else could it be ?

Crude oil soaring into the stratosphere ?

John_M_Business

deemy2004 wrote:

if the consumer spending is crashing whilst the housing market slows... what will they do when house prices start going negative ?

There is already talk about a recession in retailing which is the largest industry sector (if you can call it industry :rolleyes: )

Firstly - there is talk of a recession on the High Street... because more and more people are buying online. The online merchants I work for are having a 'field day' when it comes to growth - so the slack has to be taken somewhere else: cue the high street. Therefore there is no chain reaction, just a paradigm shift in retailing.

Now, that's not the same to say that it's 'buoyant' at the moment, retail isn't. But it's actually about where it was last year - i.e. no change.

IMHO the only thing that will send the market into a 'spiral' (lest we forget that we are in the longest period of sustained growth EVER) is something terrible: a major terrorist attack, a large-scale natural disaster... but not oil, or sales, or even rising personal debt.

meanmachine_2

John_M_Business wrote:

Firstly - there is talk of a recession on the High Street... because more and more people are buying online. The online merchants I work for are having a 'field day' when it comes to growth - so the slack has to be taken somewhere else: cue the high street. Therefore there is no chain reaction, just a paradigm shift in retailing.

I don't doubt there's an element of truth about this. Why anyone buys their CDs or DVDs from WHSmith for example is beyond me.

But don't all of these retailers also have e-tailer outfits? Currys, Dixons, Argos, they all have strong web presences.

We need to look at firms like Amazon and compare y-o-y business. I should imagine you'd see a stagnation in proift there too. Although I don't have the figures to hand.

Surely the fact is this: we've spent 5 years' of income in just 4 years, and now can only afford to spend 4 years' worth over the next five years - which amounts to a recession in my book.

John_M_Business

meanmachine wrote:

But don't all of these retailers also have e-tailer outfits? Currys, Dixons, Argos, they all have strong web presences.

We need to look at firms like Amazon and compare y-o-y business. I should imagine you'd see a stagnation in proift there too. Although I don't have the figures to hand.

Yes, many do have websites but they have a fundamental challenge that they can't tackle at the moment - if they have customers in stores paying 'full price', and customers from stores using their websites to make purchases - do they drop their prices and diminish their profit margins.

In most cases, they have started to bite the bullet and discount some items as 'Internet only' offers - but have yet to:
a) Compete fully on price and service offering online
b) Understand the complexities of the online shopping marketplace

I believe that most of the online operators are still experiencing growth in sales and will continue to do so. When the market and economy picks up, the high street operators had better be ready - because if they're not, we're going to have some of them struggling, or even being acquired by the online operators.

meanmachine wrote:

Surely the fact is this: we've spent 5 years' of income in just 4 years, and now can only afford to spend 4 years' worth over the next five years - which amounts to a recession in my book.

That is NOT a fact. It is an opinion that is actually unsupportable with the data available.

EdInvestor

deemy2004 wrote:

People really STILL do nto have a clue what is going to hit the housing market or even why .... interest rates are a red herring - YES they did slow the market down... but they won't be the factor that delivers the knock out punch !

It certainly seems there will need to be another trigger to cause a crash, as opposed to the plateau we appear to be on now, see this graph:

Crash? What crash?

In the past it has usually been a big spike in interest rates, followed by a recession causing job losses, followed by defaults on loans, negative equity etc.Yet interest rates seem to have peaked and will possibly start to go down later this year.

To me it is too early to say with certainty that there won't be a crash.But for people in London, the market has looked like the chart above for around 3 years now - flat market, not much activity, with a shortlived spurt after interest rates were dropped briefly a couple of years ago.

And where London goes, others usually follow.

Pal

The spike in interest rates is caused by something happening, usually rampant inflation (e.g. oil price rises), but also other mechanisms at work e.g. exchange rate movements. Central banks and Governments do not just spike interest rates upwards for their own entertainment.