Sellers acting with more savvy?

guppy

Is that a long winded way of saying, "things are different this time"?

dolce_vita

guppy wrote: »

Is that a long winded way of saying, "things are different this time"?

yes it is.

Spot on guppy

Generali

dolce_vita wrote: »

What do reckon on this article Gen ?

Interesting but there are a lot of factual errors in there (for example, 'Pinball' Alan didn't invent securitisation, it's been going on since the 1930s in the US alone - the FHA was set up as part of the New Deal).

Total losses from the Savings and Loan blow up (1985-1996 approx) were IRO USD2,000,000,000,000, about the max losses expected from the current mess.

The article makes some good points but they're mostly lost amid the hyperbole IMO.

We'll see how this all pans out. What will be interesting is what will happen if a big investment bank goes bust. Then a lot of derrivatives contracts will have to be unwound and nobody has a clue what the comsequences of that will be.

It's worth noting just how much money is going into propping up the investment banks from the Arabs. UBS announced that it's writing off another USD10,000,000,000 today and that the Omanis have put USD2,000,000,000 into their pot.

Interesting times old fruit.

macaque_2

Jolanta_Nowak wrote: »

I spoke with two estate agents in my area on Friday and both made the same observation in different ways:

Rather than suffer any kind of huge drop in the value of their 'investment', many potential sellers are simply sitting tight and refusing to market their property.

Both reported higher than usual numbers of sellers withdrawing their properties from sale in recent weeks as news of a possible downward price trend has surfaced.

Surely, if this tendency continues, it would put a significant drag anchor on any 'crash' situation.

I agree with this, especially the reference to 'drag anchor'. It will slow a correction down. It won't stop it however if the fundamentals (availability of credit, economic prosperity, migration patterns, employment) turn sour.

What about the the people who are withdrawing their houses from the market. Are they making a smart move? Personally I think they are taking a serious risk. If I was a prospective property seller, I would be looking for an exit when I smelled smoke rather than waiting to see the flames.

It may just be that the market recovery after the the 89 property correction turns out to be the most destructive suckers rally in history.

Woby_Tide

Jolanta_Nowak wrote: »

I spoke with two estate agents in my area on Friday and both made the same observation in different ways:

Rather than suffer any kind of huge drop in the value of their 'investment', many potential sellers are simply sitting tight and refusing to market their property.

Both reported higher than usual numbers of sellers withdrawing their properties from sale in recent weeks as news of a possible downward price trend has surfaced.

Surely, if this tendency continues, it would put a significant drag anchor on any 'crash' situation.

or 'sellers' are just taking the decision that as others are withdrawing properties from sale, you have less choice on your next purchase so people don't want to be in a position that they can actually find a buyer and then find nowhere they like themselves. But thats a vicious circle in itself(however it doesn't necessarily mean they all belong to a single mindset that their 'investment' is dropping in value)

Charlton_King

My guess is that there's an upturn in people taking their houses off the market at this time of year anyway.

I doubt that any one agent could reliably identify a 'trend' from this unless it was on a pretty large scale.

rockinrodders

Just a quick phone call to an Estate agent will clarify the truth in this matter.

Phone today and say you are interested in buying. They'll be all over you like a rash and ringing every 2 minutes. Yet when I have been looking to buy houses previously they do not even return your calls because they can sell houses within hours of them going in the market.

What a different story it is nowadays!

And I don't think it is just the time of year (although I don't need a lecture on seasonal trends), I was actively looking to buy this time last year, but as the market was still strong it was difficult to even get a viewing in a desirable area. Now you've got the choice of hundreds.

A look at rightmove also confirms that the same houses are staying on there a long time...

Generali

EdInvestor wrote: »

There was a danger that the credit crunch could accidentally tighten monetary conditions more firmly than desired and thus cause an unwanted crash.But the Bank has now taken action to prevent that, with more easing in the pipeline to neutralise the problem, and also there are signs the banks are getting a grip on the credit crunch.

LIBOR was up about 0.75%, the MPC has cut 0.25% so monetary policy has tightened.

Some of the banks are starting to get a grip on the credit crunch (e.g. UBS writing off pretty much all of any realistic losses and recapitalising their balance sheet) others have got a very long way to go (e.g most of the other investment banks).

EdInvestor wrote: »

So 2008 looks on track to me to be a fairly quiet year overall, with growth resuming in 2009.

Time will tell. I think you're wrong - I suspect that the newspapers in the coming year will be full of stories about the heartless banks refusing to allow customers to remortgage away from their SVRs and people with high LTVs (esp self cert) unable to get a mortgage elsewhere and that this will start to bring forced sellers into the market by the end of next year.

BTL is the key. How will investors react if prices start to fall substantially? Truth is, nobody knows. Again, my suspicion is that enough will cut and run to start chasing prices down within a year - 18 months but your guess is as good as mine.

Woby_Tide

rockinrodders wrote: »

Just a quick phone call to an Estate agent will clarify the truth in this matter.

Phone today and say you are interested in buying. They'll be all over you like a rash and ringing every 2 minutes. Yet when I have been looking to buy houses previously they do not even return your calls because they can sell houses within hours of them going in the market.

What a different story it is nowadays!

And I don't think it is just the time of year (although I don't need a lecture on seasonal trends), I was actively looking to buy this time last year, but as the market was still strong it was difficult to even get a viewing in a desirable area. Now you've got the choice of hundreds.

A look at rightmove also confirms that the same houses are staying on there a long time...

none of that backs up claims that all sellers are removing properties as "they think their house isn't going to be worth what it was". It just backs up the fact that less houses are on the market. I rang up a couple of agents just a couple of minutes ago and neither answered so I can conclude that actually the main problem is not a lack of properties for sale but evidently because the agents have shutdown through lack of business.

EdInvestor

Generali wrote: »

LIBOR was up about 0.75%, the MPC has cut 0.25% so monetary policy has tightened.

Sure, but the LIBOR spike may just be year-end related - after the books are balanced it could settle much lower.The point IMHO is that the Bank has demonstrated that it sees the need for balancing action.This wasn't previously clear which was worrying (especially given the mishandling of NRK).

Some of the banks are starting to get a grip on the credit crunch (e.g. UBS writing off pretty much all of any realistic losses and recapitalising their balance sheet) others have got a very long way to go (e.g most of the other investment banks).

Obviously there's still a way to go, but encouranging to see a second appearnce by the oilies and the Asians today to recapitalise UBS, after the earlier Citibank move.They seem to have realised that a major recession in the US and Europe is not in their interest and that an opportunity exists to get some valuable assets cheaply plus gather some valuable 'helping out' brownie points for later

BTL is the key. How will investors react if prices start to fall substantially? Truth is, nobody knows. Again, my suspicion is that enough will cut and run to start chasing prices down within a year - 18 months but your guess is as good as mine.

IMHO if there's a problem it will tend be confined to the inner city apartments in the provinces, so primarily a local issue.