" Prices wont fall in my area" - why do some say this?

Conrad

"Prices wont fall 'round here"

I have found that this mindset exists from Scotland to Lands End, Essex to Gloucestershire where many feel thier particular area is special and thus crash - resistant.

CAN SOMEONE EXPLAIN THE LOGIC PLEASE?

tradetime

Simple really, it's called human nature, it's a relative of "It won't happen to me." The reason lots of people do stupid or dangerous things. Most people don't think the bad thing will happen to them. Nothing new there. When it does it's shock, horror, how can this be, the world's so unjust.

mitchaa

Conrad wrote: »

"Prices wont fall 'round here"

I have found that this mindset exists from Scotland to Lands End, Essex to Gloucestershire where many feel thier particular area is special and thus crash - resistant.

CAN SOMEONE EXPLAIN THE LOGIC PLEASE?

You think London will see the same falls as Aberdeen for example?

Average price of a property in Aberdeen, circa £200k
Average price of a property in London circa £350k

Which needs the correction?

Aberdeen may well sufer 10% falls yes, but London is likely to fall heavier 30-40% as they have further to fall.

The answer to your question is, some places have a lot further to fall than others.

Average price of a home in Scotland, currently at around £140k, average price of a home in England, currently at around £200k

So Scotland is going to be more crash resistant than England. In general terms anyway, there will of course be exceptions for vastly over inflated properties, ie newbuild flats etc.

Oh and Aberdeen is special London salaries, Newcastle cost of living

m00m00

Stage 1: Denial 'Prices won't drop in XYZ area because of ABC'
Stage 2 : Anger, well any number of threads on here over the past couple of days


just simple basic psychology

tradetime

I trust you are not suggesting that when this is over the price of an average house in London will be the same of that in Aberdeen? Probably not, so your statement may be a little misleading. In average cash terms prices will decline more in London, that's just a product of mathmatics, but in % probably not greatly, unless of course Aberdeen hasn't gone up in recent years.
So to use big numbers and please the HPC devotees if at the end of this a property in London is worth 175,000 then it is likely the equivalent in Aberdeen will be worth 100,000 all things being eqaul. A disparity in cash but similar %. Personally I think London will hold up better than most of the rest of the country.

mitchaa

tradetime wrote: »

I trust you are not suggesting that when this is over the price of an average house in London will be the same of that in Aberdeen? Probably not, so your statement may be a little misleading. In average cash terms prices will decline more in London, that's just a product of mathmatics, but in % probably not greatly, unless of course Aberdeen hasn't gone up in recent years.
So to use big numbers and please the HPC devotees if at the end of this a property in London is worth 175,000 then it is likely the equivalent in Aberdeen will be worth 100,000 all things being eqaul. A disparity in cash but similar %. Personally I think London will hold up better than most of the rest of the country.

No i do not expect a match but i expect the averages to come in a lot closer together compared to what they are now of a £150k spread. Possibly down to a £75k spread?? I dont know, its only my opinion.

Yes you can use the 50% fall in both cities to get there,, ie.. £200k to £100k in Aberdeen and then £350k down to £175k in London but you could also use....Aberdeen remains stable at £200k (0%) and London drops to £275k (-21%)

FTB in London, simply do not have a cat in hells chance, in Aberdeen it is more than possible.

I have used these 2 cities purely because of their wealth and the fact they are 500 miles apart for a comparison.

I wouldn't be susrprised if the average Aberdonian was better off than the average Londoner, mainly due to the cost of living in each city.

I agree to live in the capital is going to be more expensive and no i dont expect Aberdeen and London to become on a par, what im trying to say is that the gap between the 2 will hopefully get smaller.

We are talking about city averages here, not individual examples.

tradetime

mitchaa wrote: »

No i dont expect a match but i expect the averages to come in a lot closer together than what they are now of £150k spread. Possibly down to a £75k spread

FTB in London, simply do not have a cat in hells chance, in Aberdeen it is more than possible.

I have used these 2 cities purely because of their wealth

Yup understand, which is what my example shows, a 50% decline in both areas produces your 75k spread, again a simple product of maths, the spread decreases relative to the %

m00m00

there simply will not be a uniform drop all across the country on all property types.

there are regional differences at work in terms of income, property types, quality of areas etc, all of which will govern relative declines.

what's becoming clear though is that virtually every area in the country is in the beginning stages of a crash/correction/slump/jelly whatever phrase people want to use

mitchaa

tradetime wrote: »

Yup understand, which is what my example shows, a 50% decline in both areas produces your 75k spread, again a simple product of maths, the spread decreases relative to the %

Yep, i knew you were going to reply with that 1 so i edited my post

You would still get that £75k gap if Aberdeen remained stable at £200k but London dropped 21% down to £275k

I agree with moomoo, the drops will not be uniform across the country. Some areas will drop much heavier than others.

Due to the wealth of Aberdeen and the fairly already reasonable house prices i would be surprised if Aberdeen fell heavy.

Everywhere may fall bar London?

We all have an opinion, no-one has a crystal ball, who knows eh?

tradetime

LOL yes, sa you had edited after I posted, London will / is falling just like everywhere else, though I think the London market is a bit of a law to itself and either will not fall so fast or will recover quicker in the aftermath, (and no I don't own property in London) but I also agree, I'm far from any expert and thus know no better than you how it will really play out.

Conrad

In the last crash my in laws wonderful home in Hadley Wood, Herts, a very up market area full of footballers and surgeons, halved in value. They sold for almost exactly halve the price it had been worth in 1988 - I kid you not.

I remain unconvinced by the notion of large regional variations.

I live in one of those localities where the neighbours are certain the crash wont touch us, but this is a nonsense.

Less cash will be comming into the area from the sale of properties outside the area. This means sellers fighting for a smaller pool of cash.