Am I stoopid for not buying a house?

Population density:

United States 31/km^2 United Kingdon 246/km^2

There was a property crash in the UK in the 90's. Did the land mass suddenly expand?

There was a property crash in Japan in the 90's. Did the land mass suddenly expand?

No in both cases. So it must be something else then, eh? ...prices were too high.

Steve Firth wrote:

x-no-archive: yes

you really need to consider what's importnant to you.. hopefully a capital gain from any future sale of a property, with all the costs that come with it- mortgage (could you stil lafford repayments, if interest went up?) also insurance, council tax, repairs etc.

also bear in mind that any house you would then have to buy, has probably also gone up in price.

renting- fairly fixed costs, with few (if any) structural repair bills- i am lucky as my landlord is the local council, so the gas boiler is regularly serviced (free!), and we also get periodical improvements- new dub;le glazing, entrphone, smoke alarm etc.., i feel sorru for the poor souls who bought a lease, and have to chip in- though their investment no dount would also improve..

Care to compare property pices then and now, and share values then and now?

Ah reduction ad absurdem, coupled with the use of a strawman. Well done.

The US has low population density and a history of total and complete loss of property value over and over again. Can you point to anything similar in the UK in say the last hundred years or so?

Your point being?

You'll have to explain your "reduction ad absurdem" and "strawman" comments. Simply typing those words with your keyboard bears no weight.

Your implied comment was that property values will not fall in the UK because there is less land in the UK than in the US. However, house prices in the UK have fallen in the past even though there was a fixed amount of land before and after the fall (early 90's). That shows that the supply of land is not the only factor in the movement or prices. It works the other way as well. Why did prices rise so much, so quickly in the UK (past 5 years) when the amount of land and population size did not change much in that time? If it is soley dependent on the amount of land, there would only be gradually rises. This is elementary.

Same thing in Japan.

Have you lost your way in the thread?

Umm no, my point was that comparing the US and the UK property markets and trying to draw conclusions or indeed to make predictions about the timing of events from one economy to the other is not valid.

And irrelevant as is the discussion about the overheated Japanese economy.

There are ghost towns in the Highlands. I've seen 'em.

That very much depends on the factors being compared. For example it would be quite sensible to observe that both the US and UK are experiencing credit bubbles and to note that in both countries, people are bidding with the credit obtained to buy houses.

FoFP

Nope. Prices are always just right where they are settled between willing buyers and sellers.

What changed in Japan in 1990 was credit availability.

FoFP

Certainly: in 1911 land prices in the UK fell 90% Those few people who had taken advantage of the first mortgages also saw their properties in London fall in price by a similar margin.

FoFP

That would be true if it were local property bubbles we were talking about. If I'm correct and it is instead a global credit bubble, then it makes perfect sense to discuss whether events in the US presage events here.

FoFP

So if it's so sparsely populated and this means that house prices must be lower, why did house prices rise considerably in the US?

FoFP

I believe you. I suspect that this is because you have in fact lived for a short term rather than a long term.

That's been true recently. However, if you'd care to check you will discover that the long term trend of property prices in mainland Britain is to rise at very close to half a percent in real terms. For shares it's somewhere above two percent depending on which "long term" you select.

So was that investment over a decade or a century?

The experience of individuals? Perhaps. The experience of pension funds? I doubt it: most of them have been around a long time.

Of course the problem with the long run is, as I think Samuel Clemens put it, is that in the long run, we're all dead.

FoFP

Well, I didn't for one, I merely questioned the omniscience of those who apparently were able to forecast exactly what would happen and when. They were wrong.

Are you trying to argue that people predicting a house price crash in the UK over the last two or so years (a crash that had already started 18+ months ago according to some, IIRC), are now vindicated by a house price fall in some areas of another country 3,000 miles away? Otherwise I dont see the relevance, and I suggest you all retrospectively start a "HPC in the US" thread.

I dunno, this?

Apart from Prechter Senior, everyone I've ever heard forecast the exact timing of a major tunr has been wrong. predicting stuff is hard enough without having to say when it'll happen as well.

I'm not trying to vindicate anyone. I am saying that every reason I've ever seen for why prices wouldn't fall here was also given as a reason why prices couldn't fall there. Lo and behold, Mister Market apparently doesn't read such make-believe.

I guess you've forgotten that a couple of years back I opined that the US was about a year ahead of us as far as the global credit bubble goes. I am still very much of that view. The credit spigots are being turned off and sooner or later it will affect things here too. Meanwhile we should congratulate ourselves on being so much more stubborn than our yank counterparts in continuing to rack up debt.

FoFP

That comes later in the cycle. Right now the US is at the cusp of the switch from falling volumes to falling prices. Next comes layoffs of builders and realtors. Then layoffs amongst retailers as the lack of credit dries up shop sales. Lastly comes the layoffs of bankers and financiers as the debt hangover starts to hit the balance sheets of the big boys.

It's extremely hard to predict when a credit bubble will burst, but they follow a quite predictable pattern once they do. It ain't the time to buy banking shares.

FoFP

Where?

I'm pretty much in your camp on house prices, but just about everything in the highlands is being snapped up by people who got out at high prices down South and cannot believe how much cheaper prices are up here. We came in at the tail end of the boom in the Eighties as well.

Neb

And in North Wales, not to mention England.

Not in the summer when the holiday homes are full :-)