House prices: 50% falls before fair value

HammersFan

mr.broderick wrote: »

Crunch is stalling, confidence coming back we'll be lucky to realise 5% drops before the upturn.

The longer the slow / minimal drop occurs, the bigger the upswing will be because of the increasing pent up demand (as partly evidenced by the posters on this board intent on buying). Maybe even some of those on here are already seeing drops in their area that are tempting them. And maybe the banks will be lending out loadsa money again soon (because doing so generates big profits).

Some of those waiting for big falls might get their fingers burned when prices do shoot up again. There are plenty of investors / speculators ready to jump in when the time is right (mainly because they have built up large deposits courtesy of previous price rises), hence pushing prices on again.

Which may, or may not happen. which may or may not be a good thing. Best to be ready just in case though, eh?

mr.broderick

abaxas wrote: »

Only 95%?

If you look back to the last housing bust, whole areas went into negative valuation. IE people couldnt even give it away.

Heavens abaxas if that's the case don't bother waiting for the bottom i mean whats the point if could be worth newt ? Just keep renting.

brit1234

PhilDS wrote: »

I was merely disputing the fact given that "there is no money around". There is. It just costs a little more.

You have to realise the way banks have worked in the last few years. They have been selling off there mortgages to 3rd parties and using that money to fund further mortgages. That allowed lending to get lax and prices go through the roof. That option isn't there anymore and they have to rely on their savers. Their access to money has shrunk dramatically whilst prices remain 100% up from when they use to lend on basis of savings.

If they are not short of money why do you think they are tightening there lending criteria especially when people flood to certain banks for the best deal.:D

mr.broderick

brit1234 wrote: »

You have to realise the way banks have worked in the last few years. They have been selling off there mortgages to 3rd parties and using that money to fund further mortgages. That allowed lending to get lax and prices go through the roof. That option isn't there anymore and they have to rely on their savers. Their access to money has shrunk dramatically whilst prices remain 100% up from when they use to lend on basis of savings.

If they are not short of money why do you think they are tightening there lending criteria especially when people flood to certain banks for the best deal.:D

Thanks for explaining that for the millionth time on here ..

brit1234

HammersFan wrote: »

Some of those waiting for big falls might get their fingers burned when prices do shoot up again. There are plenty of investors / speculators ready to jump in when the time is right (mainly because they have built up large deposits courtesy of previous price rises), hence pushing prices on again.

Those investors are likely to have their equity wiped out in the price falls unless they have converted it to cash by selling in the past.

MrDT

HammersFan wrote: »

Which must a be relief to you sine you can stop saving for a deposit right now as really nice desirable house will be worth £0 in no time. Can't wait!

Not that there's any scaremongering on here of course.

Now I never said desirable did I I have specific ideas of what I want to buy, and more importantly 'where'. I know the saying "not in my area, it's different here" is usually frowned upon, but I really do doubt that houses in my area will drop to £0 :rotfl:

Saving for a deposit is no hardship, I'm not sure where the 'relief' comes in. I know I will be able to buy what I want, and am quite happy as I am in the meantime

There's got to be some truth in abaxas' post though, if some houses could be bought for £0 in 2004/2005, do you honestly expect there won't be any in 2009/2010?

mitchaa

The average price of a home in the UK as of May 2008 is £176k

Does anyone really believe this figure is going to fall to £88k :rolleyes:

Some people are in the clouds.

HammersFan

brit1234 wrote: »

Those investors are likely to have their equity wiped out in the price falls unless they have converted it to cash by selling in the past.

Which enough have to make it a very competitive market still when they see the time is right. There is a still a lot of money kicking around out there waiting for the right deal, its still going to be a scrap for FTB'ers IMO.

mr.broderick

mitchaa wrote: »

The average price of a home in the UK as of May 2008 is £176k

Does anyone really believe this figure is going to fall to £88k :rolleyes:

Some people are in the clouds.

It wont but it is nice for people to think this, gives them something to live for.

HammersFan

MrDT wrote: »

There's got to be some truth in abaxas' post though, if some houses could be bought for £0 in 2004/2005, do you honestly expect there won't be any in 2009/2010?

I really don't expect there to be any, no.