House Prices

[LGBirmingham]

House prices still seem to be rising? Does anyone else think this?

If you find that you are not emotionally attached to a house then you could grab a bargain. You could be upfront with the estate agents and say you want to buy but explain that value for money is the most important criteria. Most people are emotionally driven when buying and that is their downfall which doesn’t equate to getting the best value property out there. Good luck.

i just read this
House prices fell at their fastest annual rate in 14 years in August, according to the Halifax, as rising mortgage rates affected the market.
The lender said that property values had dropped by 4.6% in the year to the end of August, representing a fall of £14,000 for the average home.

https://www.bbc.co.uk/news/business-66728391

very concerning x

Now now, there’s no such thing as house price values declining as it’s all in the mind. @rainingsnoring can confirm. We’ve been told that by our friend Mark on here.

Also given the time lag in reporting, is the reality that things have actually dropped 10% and how much more will they go?

I doubt Mark ever claimed there is no such thing as house prices falling. What he probably said - and I agree - is that there is no history of house prices falling and not eventually recovering.

It’s strange to me that some people on here think house prices could fall and stay low forever but everyone is entitled to their opinion I guess 🤷🏼‍♀️

He did indeed have very unusual views about how the housing market works!

I wonder if he will come back on here next Spring as we agreed.

No @Twiglets1 , that's not what he said but I do recall that you always took his side in whatever he did say. You can always check the old posts if you can't remember.

I normally agreed with his views yes. Just like you tend to agree with Lightscribe and Crashy most of the time.

@Lightscribe , yes. @CrashyTime to some extent in terms of the financial reasons why this is happening.

concerning maybe if you bought in the last year with a small LTV. For everything else this is positive.

House price to earning ratio did once fall for 70 years (late 19th century to mid 20th). It wasn't "forever" but for the people living then it might as well have been. I'm not saying that will happen now, but there's nothing magical about houses which means they always become more expensive.

This...
Problem is we won't know where the market is now - for a good six months in terms of the reporting of actual sales prices. It's a crap system. Actual sold prices could easily be well over 10% down yoy for August and continuing to fall.

I find that a very strange statement, house prices returning to the levels they were at when base rate averaged 5 -7% and there was a noticeable cost for debt wouldnt be "low" it would just be house prices returning to price levels people could afford with debt priced at historically normal levels, for your scenario to work - i.e that the prices of 2020/21 are "normal" and somehow will be reached again due to the normal economic cycle completely ignores that the last decade and a half of zero rates, QE and all the other money printing and schemes to bump house prices was abnormal, it has never happened before and I dont think that it will happen again in our lifetimes TBH (Truss budget gave a taste of what will happen now if they try to use inflationary measures to bail out the housing market) the global economic and political conditions that allowed that financial experiment are gone and not coming back IMO.

Love the subliminal message of the girl with earphones in walking straight past and not even looking at the properties as opposed to the usual staged shot of the couple gazing in the window nearly drooling at the thought of getting massively into debt for basic shelter, the media has a lot to answer for in this mess, I only wish the public had woken up sooner.

Surely the house price fall and the mortgage interest rate increase just levels it out.

Yes absolutely it will, given time for expectations to adjust. Probably a year or two I guess to balance out again. You have to remember a lot of people are still on teaser mortgage rates and haven't felt the pain yet. Or let go of the idea that prices only go up.

good observation.
the media are pure poison.

Maybe we’re both a bit strange Crashy! You with your dodgy keyboard & dogged pessimism, me with my relentless optimism (not that you see it as a good thing) that house prices will eventually recover & be on the rise again.
I’d love to return to this debate in a few years time.

House prices "recovering" to ridiculously overpriced levels so that ordinary people need 40 years of debt payments to buy them as "relentless optimism", and basic shelter affordable to all working people at reasonable prices as "dogged pessimism", my my we really have entered a brave new world, that is very far removed from what benefits ordinary people IMO, and I find it really scary that many folks would actually agree with you!

Maybe we are here......

https://en.wikipedia.org/wiki/Counter-Clock_World

However I don`t think that history, inflation or bond markets are on your side, but as you say time will tell.

Things are changing fast

Yes, the monthly drops are going to accelerate I think, it could all unravel very quickly once it gets going, dont know if you watch commodity markets but did you see the sugar price yesterday? There is still some wild inflation to come and I cant see the FED changing course now, they would look totally ridiculous if they did, and BOE just has to do what they do, no other choice unless they want Truss 2 in 3D?

Oh Crashy, quoting science fiction at me? It isn’t real, you know 😂

No Crashy I don't watch commodity markets but I get your point about the possibility of more inflation. I am just focused on what's going on with house values at the moment - mainly because I played a large part in stopping some young family members buying recently. I advised them to continue to save like hell and wait for the prices to fall. If they don't fall I will feel I need to make good my bad advice - which would be expensive !

Neither were the house price "gains".

That’s funny Crashy because the gains seemed pretty real when my Dad sold his flat in London and I got half the proceeds! It was actual cash in the bank or maybe you don’t think bank accounts are real either 🤷🏼‍♀️

Of course bank accounts and house sale proceeds are real, the unreality is in thinking that house prices would just keep going up and no matter how much you borrowed you would always get the money back plus a cherry on top just for "keeping" the house, the key things are how much you borrow and when you buy and sell, the fact that many people did get nice windfalls from property just added to the unreality and the belief that this nonsense would never end.

Your notion that prices will somehow return to "normal" even although that "normal" was based on massive central bank intervention on a level that had never happened before at any time in history and is unlikely to ever happen again is in a sense "unreal" in that you are missing or choosing to ignore market signals and central bank statements of intent.