Prices will fall by 50% in four years

tradetime

What has to be taken into consideration though is that futures markets contain a substantial amount of rampant speculation and invariably overshoot by some considerable distance. I personally would not consider a widespread 50% reduction as at all likely until the futures market was pricing in a 75% fall. Since futures markets price well out into the future they a constantly adjusting and really only represent the current sentiment amongst traders.
I am not familiar with the futures contract in house prices, but can only assume by the natuer of housing that it is a cash settled contract, and thus has minimal impact on driving prices

tradetime

!!!!!!? wrote: »

I'm wondering why it's only obvious to these financial 'professionals' now that the slide has well and truly started.

All of this was utterly predictable more than 18 months ago. The only thing in question was 'when will it start'? However, the general 'wisdom' in the financial world seemed to be that at worst prices would level off for a bit and then resume their rises.

The "smart money" as it is often termed would have entered the market some time back, the point at which the the issue becomes big and noticeable and worthy of attention is when the herd also enters the market, which is generally the point at which the smart money starts to scale out.

iyiarz

Well said mymatebob and pickles. It kind of reminds me of the HBOS fiasco. Just because some Investment firm, (Never even heard of Oakeshott !) Writes some nonsence scaremongering article, dosen't mean it will happen. Doesn't anyone understand that if we all listened to them, nobody will move, ever. We'll all be caught in gridlock. I'm not disagreeing that there will be some sort of price drops. But nothing like these numpties are saying.

tradetime

mymatebob wrote: »

Thank goodness I bought my house a long time ago.

50% drop would still leave me well in profit.

But then I bought my house to live it - not for speculation or to let or to be an investment - it is my home.

Quite right, and your position should likely be one of mild amusement at all the fuss. As property prices decline you will not suffer from any less bedroom space, your garden will not shrink, so kick back and enjoy the fuss.

m00m00

iyiarz wrote: »

Well said mymatebob and pickles. It kind of reminds me of the HBOS fiasco. Just because some Investment firm, (Never even heard of Oakeshott !) Writes some nonsence scaremongering article, dosen't mean it will happen. Doesn't anyone understand that if we all listened to them, nobody will move, ever. We'll all be caught in gridlock. I'm not disagreeing that there will be some sort of price drops. But nothing like these numpties are saying.

not quite what the 'numpties' are saying, but quite impressive none the less

6th Jun 2008

• Price changed: from '£130,000' to '£100,000'

9th May 2008

• Brief Description changed: EXEMPT FROM STAMP DUTY DUTY. NO UPWARD CHAIN. Spacious and well presented, this gable end terrace property has a large side garden with vehicle access to a detached garage and is ideal for the growing family. The property backs onto the park and benefits from majority UPVC double glazing, gas central heating, burglar... cen...
• Price changed: from 'Offers in Region of £145,995' to '£130,000'

19th Apr 2008

• Price changed: from 'Offers in Region of £148,500' to 'Offers in Region of £145,995'

1st Mar 2008

• Brief Description changed: EXEMPT FROM STAMP DUTY Spacious and well presented, this gable end terrace property has a large side garden with vehicle access to a detached garage and is ideal for the growing family. The property backs onto the park and benefits from majority UPVC double glazing, gas central heating, burglar alarm system and compri... burglar...
• Price changed: from 'Offers in Region of £151,995' to 'Offers in Region of £148,500'

9th Feb 2008

• Initial entry found.

http://www.rightmove.co.uk/viewdetails-16098671.rsp?pa_n=1&tr_t=buy

and it's not a shoddy newbuild, or in a vile area

Kez100

A fall of 50% would make financial sense to me. Our home would then be worth 3.5x our present joint income and cost (at todays mortgage rates) £875 a month in mortgage which is circa £25-75 a month less than one could, in all probablility, rent it for.


Of course if interest rates rise......

I still think FTBs will jump on the ladder quicker than this though and there are plenty out there waiting to bite. The question is, do they/will they have the deposits?

wibble68_2

pickles110564 wrote: »

Glad to see you are still wishing for misery on normal home owners, cant wait for the bad luck to hit you.
By the way a curse is on you until you stop wishing misery on others.;)

I for one don't wish to see the misery of others who will be affected
by the housing slump.

However, I'm very glad that when I have conversations with friends and family regarding the housing market / economy, I don't have to hear the
following misguided and arrogant comments:-

1. House prices won't fall
2. Houses are making 20k per year
3. Last time the market crashed interest rates were 15%
4. The government won't let the housing market crash
5. My house is my pension
6. The market won't crash because lenders are more sophisticated now.
(ie 130% mortgages, 40 year mortgages 10 x incomes etc):rotfl: :rotfl:
7. The market won't crash because of 2 income households
8. We have a supply and demand issue in this country

WTF?_2

iyiarz wrote: »

Well said mymatebob and pickles. It kind of reminds me of the HBOS fiasco. Just because some Investment firm, (Never even heard of Oakeshott !) Writes some nonsence scaremongering article, dosen't mean it will happen. Doesn't anyone understand that if we all listened to them, nobody will move, ever. We'll all be caught in gridlock. I'm not disagreeing that there will be some sort of price drops. But nothing like these numpties are saying.

Ahem... HBOS shares are now below the level they plunged to in the wake of the alleged 'short selling' plot a couple of months back.

Therefore, the evidence would tend to suggest that there were very good reasons for their fall in value, not just some sort of alleged dodgy dealing behind the scenes.

The real action hasn't even begun yet - look for plunges in the value of sterling, large drops in the stock market, job losses and industrial unrest in the coming year.

dopester

tradetime wrote: »

Quite right, and your position should likely be one of mild amusement at all the fuss. As property prices decline you will not suffer from any less bedroom space, your garden will not shrink, so kick back and enjoy the fuss.

Trouble is, whilst mymatebob has treated his house purchase, and the mortgage payments as for a "home", and not an investment...

how many others who should now be in a similar secure position of comfortable full ownership of their house.... have MEWed some of their considerable (imagined) "equity" to help their children on property ladder, or to buy flash new cars, few luxury holidays, new kitchen and conservatory, or used it as security for getting in to BTL?

pickles110564

Snooze wrote: »

There is no price crash. It's just a blip. It'll all be over in a couple of months.

Signed,

Pickles110564, Mr. Broderick, IveSeenTheLight, Dan:, BTLnewbie, etc

No surprise really with your handle.
Just to go over this one last time for you.
I have always said that houses are only sold for what they are worth.
In thickie terms for you to understand, the price they are worth is what they get after you complete on the deal.
Therefore no crash, correction or whatever else you want to call it, Houses are selling for what they are worth.
Have you got it yet? Has the penny dropped? Can we talk about something more exciting? Like how Ipswich Town will be in the premiership in season 2009/2010.