Level to step in at when prices crash?

Loaded_Bachelor

Okay we know that if house prices fall by say 5% in October or November that this is likely to cause a plethora of sensationalist "HOUSE PRICES GO SPERRLATTT" media headlines and that "Inside Out" and "Tonight With Trevor MacDoughnut" will exaggerate reality even further thus causing a minor panic, so...................

If and when this happens how long should one wait in a falling market before "stepping in" and purchasing?

Remember the pivotal scene in the film Trading Places. FOJ futures (that's Frozen Orange Juice Contracts to you and I) were sold down by the market on the back of some phoney Orange crop harvest reports whilst the man from whom the real reports were stolen was detained in a railway carriage wearing a gorilla suit and next to a real male gorilla!

Eddie Murphy waited and waited........ and waited whilst the price dropped and only stepped in at a seriously low level.

So the real question is: with base rates at 5% and prices spiralling downwards where should one buy a property? Let's use the figure of £150,000 as the starting price of a house before the big fall.

deemy2004

Ive seen that film near a million times always makes me laugh !

Would not be surprised if greenspoon does a $ bet with dozeyburgh

House buying planning.

Well thats all you can do is to plan to purchase at a particular time, if you think house prices are going to fall for 2 years than plan for the majority of your funds to be available in 2 years time. If you got it wrong, and change your mind you can reschedule the purchase date further a long.

As with the stock market, its always better to buy after a bottoms occured, than buy a falling knife. Though houses are a little different cos if you are going to live in it, it has to be treated differently.

poopscoop

The last crash happened through a number of years. Many people waited a while to make a purchase (confidence and all that). Rents were also high at the time and not all areas crashed heavily. Also you won't know when the prices are right at the bottom as it could fall again.

meanmachine_2

Yes, you can be sure that, if prices dip, the Daily Express will be screaming SLUMMMMP!!!

The papers can't bear anything boring. They'll never report stagnation. It'll either be portrayed as the start of a CRASH!!! or a BOOM!

If a serious crash were to occur, it'll doubtless be related to a tightening of credit. Prices will come down because the banks won't physically be prepared or allowed to lend you enough.

Right now the opposite is still happening. There's more BOOOM! to come before any CRASSH!

Woby_Tide

is this 'resurrect a thread' day?

Dora_the_Explorer_5

Woby_Tide wrote:

is this 'resurrect a thread' day?

Nah - I've named it 'give Dora another good laugh' day :rotfl:

meanmachine_2

Yes, we're partying like it's 2004.

Of course the crash never happened. That means it never will of course. Isn't that right Dora? Keep dancing, luv.

JanCee

Woby_Tide wrote:

is this 'resurrect a thread' day?

More like groundhog day, same old arguments, same people involved.

Zammo

I'm in a position to buy now but I'm going to wait until prices slump. I'm predicting that sentiment will change around about August time when the BOE have penciled in interest rate rises. A few more IR rises towards the end of 2006 and a glut of properties coming onto the market before HIPS should be enought to trigger the crash.

I reckon we should see prices bottoming out mid 2008. I just hope the recession isn't going to be so bad that the banks refuse to lend me any money!

:eek:

F_T_Buyer

Who knows!!!

Last time it took 5 years, with most of the falls happening in 3 years. But remember what is reported in the media is way behind the times... I think it will probably be the same this time, if not longer.

mystic_trev

Zammo wrote:

I'm in a position to buy now but I'm going to wait until prices slump. I'm predicting that sentiment will change around about August time when the BOE have penciled in interest rate rises. A few more IR rises towards the end of 2006 and a glut of properties coming onto the market before HIPS should be enought to trigger the crash.

I reckon we should see prices bottoming out mid 2008. I just hope the recession isn't going to be so bad that the banks refuse to lend me any money!

:eek:

Might happen - or maybe we could all be back here on two years time!?