House Price "Crash"

carolt

OP - you're right. It's not a 'crash' - yet.

It's just the biggest monthly drop in house prices since the last crash.

Will it turn into a crash? Lots think it likely but they might be wrong.

Repost on here in about 10 months, and then we can discuss the annual figures.

Would you agree -20% was a 'crash'? Or is that only if it happens overnight?

If it's got to be overnight, then you're safe - there won't ever be a crash, as as PasturesNew points out, property being illiquid, price falls always take months to show.
You're NEVER going to have an overnight crash of 20%, ever - it's not like the stockmarket, with famous dates, Black Monday type things, and screens turning red everywhere.

House price crashes are less dramatic, slower - but just as bad.

So see you in 10 months - looking forward to chatting then.

jamescredmond

my tuppenceworth:

'crash' is an emotive and misapplied term, found on some posts here but mainly in the popular (and sensationalist) press, along with 'meltdown' and 'slump'.

but other misapplied terms could include 'correction','slow-down' and 'weakness'.

2 terms rarely used (by the BBC, at least) are 'market falls' and 'market reversal'.

so there's an element of irresponsibility across the media spectrum.

but no-one should p1ss down your back and tell you it's raining: this is, without question, a 'fall'; the only argument now centres on 'how far' and 'for how long'.

jamescredmond

I should've added this for clarification:

a drop of 10-20%, think: a sizeable fall.

20-40%, think: dramatic reversal.

40%+, think: crash.

dannyboycey

We're arguing over labels here.... call it a 'crash', 'slowdown', 'reversal' or 'Dave'.... either way prices are plummeting that's all that matters :beer:

Though, being the sensationalist that I am, I'd go for "The massive implosion of the housing market"!

mitchaa

According to nationwide, so 1 independent lender out of a list of many there has been a 6.7% slump in the average property price within the space of 8 months from the peak last October.

6.7% decrease from peak price, is that defined as a crash, a slump, a correction?

Some people on here are predicting 25-30% BY THE END OF THE YEAR :rotfl:

Long way to go then before we're in that kind of mess and that i would define as a crash.

10% no i would not define that as a ''crash''

jamescredmond

now steady on danny! there's no need to be like that.

think what you're saying: ' massive implosion '.

if this were to happen, just think of the consequences:

no more equity increase boasting,

fewer 4x4's as MEW comes to a halt,

my children being able to purchase their own pads at a sensible cost.

er.........

tradetime

Graeme7777 wrote: »

Hi,

As someone who doesn't watch house price movements nor the prophecies of either the optimists or the pessimists, I'm afraid that I'm at a loss as to how the current situation can be described as a "crash". Newspaper headlines blaze that some survey has recorded that the average house price is something like 5% cheaper than it was a year ago. Given the stellar price rises during the past few years, why are such small downward moves such a big deal?

Or am I totally missing the point?

Thanks!

By and large it's typical media hype. sansationalism, the term "crash" evokes much more emotion than the term correction. After years of strong house price growth, we have merely entered a long overdue period of correction, there is of course the concept of perception, if you bought your house 10 or 12 years ago it is much easier to see it as a correction then if you bought it last year. Discussions like this vindicate the media, because as much as people slate them for sensationalising, it is clear by looking around, deep down the majority love a bit of the sensational, thus the media are simply giving the masses what they crave, however much they deny it.

mystic_trev

beingjdc wrote: »

Then we didn't really have a crash in 1989-1995 either. Because even then prices 'only' fell 9% in a year from the peak.

This time they're down 6% in 6 months.

Yes- that's what I can't understand! 1989 - 1995 has always been referred to as a 'Crash' now we're being told 'no it wasn't' Well I was a homeowner then and I can tell you it certainly felt like a crash!

I really don't think there's any point in looking in the 'rear view mirror' to the last 'crash' It's a new paradigm, don't you know.Just as the price rises of the last few years have been spectacular, so will be the falls.

dannyboycey

mitchaa wrote: »

6.7% decrease from peak price

It's more than that now. Factor in inflation and it's already over 10%.

mitchaa

dannyboycey wrote: »

It's more than that now. Factor in inflation and it's already over 10%.

Nationwides figures only a few days old so is very recent..

http://www.nationwide.co.uk/hpi/historical/May_2008.pdf

Shows a drop from oct 2007 where the market peaked to end of May 08 where it has taken its figures and its dropped by 6.7%

Yes when you factor in inflation, it works out more than the 6.7% but actual falls are only 6.7%. So far anyway.

So even if a house rose by 2.4% in value over the year, its actually really dropped in value by 0.6% due to the 3% inflation rate, even though on paper it is worth more now than what it was then

Inflation just makes it complicated