How Much Will Prices Fall ?

Sibley

This thread should be titles 'If you are renting how much do you want prices to fall?'

In reality they will go up again. People are stashing loads away due to low mortgage rates. Its helping the next step up for homeowners.

Jack_Johnson_the_acorn

ukcarper wrote: »

Looked at land reg and house prices in north west seem to be over 50% more than they were in 2002.

They are unfortunately in my area... maybe more.

John_Pierpoint

This poll was initiated in 2008.
Luckily, we don't live in Ireland.
However if you had £100,000 invested in housing wealth, in money terms your property might have stayed roughly the same if you live in one of the "hot" spots.
However the real sea change took place in in the 6 months after the collapse of Lehman Bros. in Autumn 2008.
Assuming your housing wealth would have bought 100,000 "items" of goods and services three years ago and the nominal price of the house has not fallen, you can now buy less than 90,000 "items" of goods and services. So your real "wealth" has been decimated (reduced by a tenth), as you and the rest of us are tending to get poorer, because our government is choosing to debase the currency.

The only way realistically to have conserved your wealth in real terms would be to have bought gold or emigrated to Australia.
[The government knows what is happening, that is why the third option of buying inflation proof national savings is no longer available]

Those of us who have failed to emigrate or have a pile of yellow metal under the floorboards, are either sitting on a lot of cash and renting, or sitting on a pile of difficult to sell bricks. The renter has flexibility in their life, the owner has a hostage to fortune in uncertain times.

[ When looking at real estate for sale; you don't need "property bee" to get an insight on how long the property has been on the market, just look at the date on the Energy Performance Certificate. ]

These are dangerous times economies could go the default route and thus the hyper inflation route, or they could go the double dip recession.
In the UK we should do the latter.
Either way is is looking like further house price falls in the next three years. Eventually there could be a massive inflation but now is still a bad time to buy on a large mortgage and risk negative equity and maybe default.
Those with low gearing might as well sit tight as a pile of cash is a depreciating asset.

Eventually living standards will fall to a level where our imports will be reduced and our wage levels are low enough to (re)employ some of our unemployed/ables and put some of their surplus value into exports - but we are nowhere near that point yet.

For any one individual, the outlook could be better or worse than the average poor outlook.
There will always those who are "intelligent" enough or hard working enough to pull themselves up by their own bootstraps.
In the 1990 recession, a co-operative group of the unemployed in East London, managed to self build their own homes, while living on benefits. Unfortunately this time round the pressures of high land prices and high population pressures and loss of an oil based balance of payments plus changes in regulations about heating, electrics and insulation, have made it much more difficult for the true self builder.
Back in 1990 one of the self building co-operative observed to me that their only real problem was "avoiding killing each other" and he was not talking about industrial accidents.

Jimmy_31

ukcarper wrote: »

Looked at land reg and house prices in north west seem to be over 50% more than they were in 2002.

That doesnt really change what i said.

When i should have bought a house in 2002 they were already above what i could afford on the wages i was earning as they had already risen in price by enough to price me out.

By the time i was earning the correct wage for the job i was doing, house prices had got even more laughable so i couldnt justify paying such a high price for a house even if i could have afforded it. The banks said i could afford it but i was 100% sure i wouldnt be able to afford it once the crash came and i would be in and out of work all the time.

Im back looking at the housing market now as my wages could pay a mortgage. Thats if the banks would give me a mortgage, im self employed in the construction industry so nobody will entertain me for a mortgage.

John_Pierpoint

Not even a self build mortgage?

Percy1983

Jimmy_31 wrote: »

That doesnt really change what i said.

When i should have bought a house in 2002 they were already above what i could afford on the wages i was earning as they had already risen in price by enough to price me out.

By the time i was earning the correct wage for the job i was doing, house prices had got even more laughable so i couldnt justify paying such a high price for a house even if i could have afforded it. The banks said i could afford it but i was 100% sure i wouldnt be able to afford it once the crash came and i would be in and out of work all the time.

Im back looking at the housing market now as my wages could pay a mortgage. Thats if the banks would give me a mortgage, im self employed in the construction industry so nobody will entertain me for a mortgage.

I was in a similar situation, due to getting on the job training by the time my income was enough prices had gone out of reach.

As it is I am now in the process of buying and the mortgage will only be 22% on income, which is nice. :j