Senior economist predicts house price crash of between 20 to 50%

Come on! You do not have to be very bright to see that speculators make money only when share prices are fluctuating. Their whole profits come from buying cheap and selling dear. No fluctuation then no profits. It is quite silly to speculate unless you expect your shares to grow in value. These people thus thrive on other folks misfortunes. Investments in property are no different.

.

are making their houses more affordable by

That barely makes sense it just shows more people have cars which we know anyway. That just shows cars are cheap (100 each). ANway even uf they were 10,000 you can remorgage to raise the dosh.

Is NPV the same as MNI?

Obviouly in real terms they realised that prices were about the same, but a little more expensive in terms of disposable income.

Not so. Even with offers made and accepted in writing, the buyer can pull out at any time before the missives are signed, as my mother found to her chagrin a few years ago.

True. I've never placed a spread bet, so I admit I don't know the mechanics of how they work.

Having said that, the IG Index web page seems to suggest that they accept bets for the next four quarters:

So if you bet on a crash for the 4th quarter, you should be protected from any short-term volatility in the mean time.

.. but anyway. I'm not actually going to do this, but I would seriously consider it if I was conviced there was going to be a crash. Which I'm not.

Regards,

Nick

The interpretation of council tax legislation by my local council which appeared to be correct when I looked into it further.

Yes I should have done. Normally my tenant should have paid gas and elec but because of the lethargic nature of these services these days it was difficult to get them organised.

Now I wouldn't consider letting to anyone who wasn't going to stay 6 months but I'm quite happy for them to stay on a month by month basis thereafter.

Custos Custodum wrote in news: snipped-for-privacy@4ax.com:

They can do that but, if the agreement is verbal between the respective solicitors, it's legally binding, deemed breach of contract and you can sue for expenses. Whether its worth your while is a different question and most folks don't bother as the costs outweigh the returns. If there was a small claims court in Scotland, it might be a different matter.

Theoretically, but you're dealing with agents - agents who make money for getting new tennants... not for keeping ones they've got, I've yet to get one who's not insisted on new contract or bugger off after 1 year.

Jim.

You assume an economist is correct because he is an economist?

I am sure you will find another economist who is not predicting a housing crash. Hence 1 of the two has to be wrong. What should we conclude?

If the data is telling us anything (bubble, crash just around the corner and similar) how come similar data and similar messages 1, 2, 3 years ago did not result in the predicted crash? What is new with the data that indicates a change in the results compared to the last 3 years?

It might be argued that a crash takes a long time to happen. We could also then drop the term crash as something that happens over a long time is not a crash. It makes for great headlines to call something a crash. Stable or minor correction just does not leap out at people so no papers are sold.

I find economists interesting to listen to as they stimulate my thinking. They rarely discuss if they are making any bets with their own money as to the trends they are predicting. I suspect that when this guy and his partner (assuming he has one) discuss their living arrangements he think in terms of a home and not a market instrument that he will trade in and out of. Stated more simply, how many people predicting a crash actually have sold and are renting?

I have run into a number of folks who did take action to become short term renters on the Motley Fool board. Do you post there?

Many though they were saving tons while getting ready to buy in at a discount in 2004, 2005, 2006. Some reported how their partner was not always happy with being in temporary accommodations (they all expected to buy back when prices corrected). Some even had the guts to say they had the timing wrong and purchased again before a correction with the subsequent crystallization of a real loss compared to never selling. Happy partner, poor market timing.

Then there are the transactions costs in terms of money and actual hassle to look and move twice (to a rented property and then to a purchased property). Market timing for property is not a fun game. Proper market timing depends in lower transaction costs, low holding costs and speed of execution. Marketing timing and property do not mix well.

This forum and others are great fun like the same crap that gets discussed at the pub. Each day we are a day older and we feel good about arguing our position while another beer is pulled. Rarely do people pull their finger out, swim against the grain and then reap the rewards for being correct when others argued against them. For each person who does take a contrarian position and wins there are other people who did so and lost. Most order another round and discuss how things could be.

Fish or cut bait. Put up or shut up. Put your money where your mouth is. These are not phrases you will hear an economist speak. Economist might be hired by people who do place real bets. If you bet wrong you can not save your job by claiming that the economist did not get it right. Economists are economist because they like to study the data and write about it, not because they want to be business people who take action based on what they are seeing.

Credit goes to the landlords and the people who are short term renters (STR) as both are taking an actual position to back up their strongly held beliefs. Most property is owned by people who want a home and not because they think they are taking a correct financial position. That might be a bit unfair. Many home owners want a home and know that over a long period there are more benefits (including financial) if they are owners compared to being a renter. It was also true that until 1996 there were structural reasons that there was very little rental housing stock that was privately available to a renter.

Back to the landlords vs. the STR folks. One is expecting a rising market and the other is expecting a falling one. I claim the landlords have two aces in the hole. First, the long term trends are up if you average over a long enough period of time. Second, it is the tenants paying rent that let a landlord hang in there forever if the cash flow lines up. Hence it is almost the presence of the STRss helping to mildly push up rents when house prices seem to be peaking or when prices are falling that lets the landlords to hold a stronger hand.

John Corey

alking about the individual and his prediction. It is because it is extreme and contrary to the majority of the economists that it even makes it to this forum.

No, it depends on *your* definition since you are the one predicting it.

Do I detect a note of petulance TW ? :-0

No, pedantry :-)

But on a serious note, if you predict a crash, the onus is on you to say what you mean.

I suffer from it too ;-)

Personally I would regard 25 to 30% or more nominal falls (price cuts) over a year to 18 months or thereabouts as a 'house price crash'.

But it's subjective, ask me again tomorrow and I might have changed my mind and ask any of this lot and you'll get a hundred different answers ............

"

OK so you now have 9 months to get your 25% fall into the rest of this year, then the tar and feathers come out :-)

Gulp .............

Didn't I predict 20% in a year at the end of Feb just gone to the end of Feb 2007 or is my memory playing tricks on me ? Not trying to backpedal, I'll stand by my forecast and take public humiliation if wrong.

QUite probably, but you also posted about a crash on 9th jan (nothing special about that date, I think you've pretty much been predicting one every day :-) but I found that one,and you mentioned a year in that post. ISTR that one because only a few days later there was a story about how prices had risen!!

It's a fair cop

LOL. Perfect timing !