So how will a housing crash happen?

The prices go down, that's usually the first pointer.

The point where they begin to turn is not obvious. There are some suggestions through continued demand for housing, a good economy and low interest rates that they will remain high.

Last time the end of double tax relief in 1988 and a reducing economy made the timing far simpler to predict!

A few months after the turning point. A point when people realise houses are sticking and 'reduced' signs appear in agents ads and window displays. Same as boom in that no one knows until well after its happening.

P

There are already reduced signs in a couple of agents ads.

There's a few reduced signs around here too, but new properties still seem to go on at 10k about the last similar house.

Also around here a few houses are not selling and get left empty! The owners normally still don't drop the price though. I'd have thought it better to sell for a bit less than leave a house empty.

M.

Isn't this a possible feature of the turn-around though? A possible period of market stagnation where there are no buyers at the asking price and all the sellers are in a state of denial (expecting further rises). Not forgetting that all the major BSs are still talking it up with 'plenty of headroom'.

There always are. A few doesnt mean anything.

If you can monitor it, the first sign is an increase in stock at most of the agents. This generally means that the peak has passed a short while ago.

30 new on one agent's today...

Or is there a time when people start to think about moving in time to be in new place for next school year? (Is that too soon for now? Is it a myth?)

In message , mogga writes

30 new on one day, (even in one month!), is actually a result for the agent. If his market is still buoyant, they will sell and he gets paid.

What you are really looking for is a gradual increase, or a trend. e.g., say the average agent gets an average 5 houses a week and their stock is say 50 at present. If they continue to get 5 a week, and their stock increases, they arent all selling. This suggests that the prices are too high for the market, and they will have to reduce, wait longer for the market to rise, or not sell. If the market doesnt rise, and they dont reduce, they stay on the market, (complicated a bit by those which withdraw - but nothing is simple )

In 1997, our stock was around 120-140 properties. In 1999, it had dropped to around 80, and is now around 50-60. in 1999, I knew the market was rising, I know it is still rising in my part of Manchester.

Regds

Most crashes happen after someone has been drinking.

___

Is there any way to monitor this, in a given area?

In message , John-Smith writes

Very difficult. Some agents will give you a list of all available properties, others will be protective of the full list and give you only what seems to fit your requirements.

yes you ring up all the local agents every day :) Or look online as some show how many properties are updated every day.

If you're actually looking for a specific "type" across lots of agents site you'll probably know exactly what they've got on their books and approx how many.

Consumer sentiment changes.

Non food retail sales.

Daytona

You might be able to do it via Hometrack - I don't know how accurate they are, but they claim that Standard & Poors have assessed their methodology since I last looked.

Daytona

OK an item on the guardian lists

The danger signs

1 Sharp increase in newspaper articles discussing whether there is a housing bubble.

2 Buy-to-let landlords start selling up as rental yields plunge.

3 The number of first-time buyers collapses as they baulk at high property prices.

4 Lenders talk of a 'gradual slowdown' in the housing market. This has never happened in the UK.

5 Consumer credit spirals, making mortgage repayments difficult. The average Briton is £4,500 in debt.

6 Consumers rein in spending to service interest-rate hikes. Dry cleaners are the first to feel the pinch.

7 Property programmes talk about selling city homes to raise the cash for a flat and a country house.

8 Lenders become selective about those they lend to. A number are restricting buy-to-let mortgages.

9 Politicians voice concern. Australian PM John Howard has said property prices are too high.

10 As land prices soar, developers knock down more properties to build new homes.

"Daytona" wrote

How did they know when you had last looked?? :-))

Journalists start to declare that the current situation has now become permanent.

A schoolboy makes ten grand buying and selling an unbuilt house over a weekend?

FoFP