Own up. Do you regret it

Woby_Tide

Nelly and meanmachine get together to discuss house prices and dispute the notion that they can't actually appreciate there is something such as a region....

Nick_C_4

Most people who bought in the last year or so probably don't know whether they're in negative equity or not. Don't know about the rest of you, but I stopped looking at estate agent windows when I moved into our new house (about two years ago now).

I'm lucky in that I know I'm not in negative equity because we put a lot of money down on our house, but I can honestly say I have no idea of its value. The only thing I can say germane to the original question is: even if our house is worth less than I paid for it, I don't regret buying it at the price we paid for it. We intend to live there long term. If house prices fell significantly that woud be a good thing, as it would make it easier (read: possible) to trade up.

John_M_Business

I'm really sorry, but I can see some logic in people saying... we COULD be:
- heading into recession
- seeing demand dropping
- seeing prices dropping

However, the reality is that this HASN'T happened yet. And, if in some localised areas, definitely not over the whole country. And, guess what, it doesn't look like it's going to happen this side of Christmas. Have you seen the massive bonuses coming out of the city?

As for people overpricing their houses and accepting lower offers... this ALWAYS happens, even in a 'bull' marketing. It doesn't mean anything (apart from that the EA who can get away with offering the highest sale price often misleads).

wibble68_2

John_M_Business wrote:

I'm really sorry, but I can see some logic in people saying... we COULD be:
- heading into recession
- seeing demand dropping
- seeing prices dropping

However, the reality is that this HASN'T happened yet. And, if in some localised areas, definitely not over the whole country. And, guess what, it doesn't look like it's going to happen this side of Christmas. Have you seen the massive bonuses coming out of the city?

In Oxfordshire where I live prices have remained roughly the same as they were 12 months ago.

John, I would agree that some peoples veiws are pessimistic. But you seem to discard these opinions as though they could never happen.

The reality is that it's possible house price inflation can go below 0% and it's also possible we could end up in recession.

We can't say these things won't happen as we can't predict world events.

Woby_Tide

if you read John's post I believe that's exactly what he is saying. His dismissal was of those who post that the above has happened, in every area in the UK. Whereas he has pointed out that it could happen everywhere, but so far hasn't happened in every single area, only some.


i.e.

Everyone who bought a house in Summer 2004 is now in negative equity because the Hometrack survey says that annual house price inflation is negative.

whereas in reality it is 'Some people who bought in Summer 2004 may be in negative equity due to negative price inflation in their area, whilst others have experienced a rise in property prices.'

John_M_Business

wibble68 wrote:

In Oxfordshire where I live prices have remained roughly the same as they were 12 months ago.

John, I would agree that some peoples veiws are pessimistic. But you seem to discard these opinions as though they could never happen.

The reality is that it's possible house price inflation can go below 0% and it's also possible we could end up in recession.

We can't say these things won't happen as we can't predict world events.

If you read my message, I said that there is some logic in there - but these opinions should not be assumed as they may not occur. Woby said the rest for me - but please read the post closely before firing from the hip!!

meanmachine_2

I do find it curious that homeowners get so uppity at the merest possibility that house prices could be 10% less, say, in 12 months' time than they are now.

As others on this thread have said, once you've bought your house, why should you care?

If I'm then rewarded for my patience by being able to buy something at 10% less than you, so what?

After all, it's only a tiny shift in the balance of things following 10 years of a bull market.

And if you're conceding we've had a bull market, then you must accept that there also exists a bear market. Otherwise we should stop calling the property market a market and rename it a property escalator.

John_M_Business

I don't, in fact I'm quite prepared for a drop and, actually, given my position it would actually benefit me if they did (give it two weeks!).

HOWEVER what I do find a little rich is people who:
- Claim that house prices have already fallen sharply
- Are absolutely certain that house prices will fall significantly
- Use hearsay to justify their statements (i.e. I have a friend... blah, blah, blah)
- Claim that the stats back their view (they don't - it's very mixed messages at the moment)

Most are wishing it to happen... but the point is that it hasn't happened yet and may or may not.

However, I do agree that if you are a homeowner, then unless you have the threat of negative equity, there's no reason to worry - it can sometimes mean the gap to your next property (if you're going up the ladder) is actually smaller.

Plasticman

John_M_Business wrote:

However, I do agree that if you are a homeowner, then unless you have the threat of negative equity, there's no reason to worry - it can sometimes mean the gap to your next property (if you're going up the ladder) is actually smaller.

and even if you're in negative equity it only becomes a problem if you have to (or want to) sell. That's why negative equity was such a big issue in the past, because it was linked to a recession, high interest rates and increasing unemployment. People couldn't afford to keep their houses and couldn't afford to move either.

Personally I don't care because I won't be in negative equity unless they drop by 50%.

meanmachine_2

I don't personally recall claiming that prices have fallen sharply.

My position remains that prices will still be "squelchy" if int rates stay where they are. That's because they just about sustain current levels of affordability.

If they nudge up, then we could see a correction above 5% year on year.

If they nudge down you could see HPI matching inflation for the next few years.

However, you also have to look at unemployment. Again that currently sustains prices where they are. But that stat is rising, so could have a negative bearing.

I believe that the BoE will try their utmost not to put rates up, due to political pressure. In the States, the system seems much more independent. Can you imagine the BoE putting up rates had the UK been hit by a hurricane?