Where did all the House Price Crash people go?

Apologies. I'm busy watching the start of the crash in the US. I'll come back here next year when it's our turn.

BTW: They've begun to realise in the US that it was a credit bubble rather than a housing bubble. The penny should be dropping here in the Spring...

Now that Fannie and Freddie have lived down to my expectations, and the US is starting to, I'd advise watching the derivatives markets. I expect something interesting to happen there sooner or later, most likely in the default swaps markets.

Meanwhile I note gold is up over 50% since our last little chat...

FoFP

pushing it back a year+ from your original predictions?

is there a credit bubble here? I though I'd read that credit card lending was down recently?

Out of interest, how much would prices have to fall to get back to where they were when you moved into rented accomm?

You did read that about the BOE not belueving the govts inflation figures from the cpi?

Never heard of that. Can you provide a link ?

Daytona

Tumbleweed wrote

So is the housing market. There have been six houses for sale in my road, some for six months at least. None have been sold.

Anybody can put a high price on a item , does not mean it will sell .

so your *road* is 'the housing market'? I dont think so.

I've know of a house for sale this week, will be interesting to see how long it takes. If its quick, does that mean the housing market is booming?

I wish I could agree with you. The US market is different since supply has surpassed demand with stacks of new builds in recent years.

The UK market is now dominated by demand somewhat due to the massive immigration we've had. It's not just a credit bubble. With the potential of Romanians and Bulgarians entering the UK there might be more immigration to come with the associated demand.

If you consider the *massive* immigration we've had (and it is massive, much more than the Govt. would have us believe), then I think the static state of the housing market is remarkable.

Now consider that inflation is higher and rising faster than for many years, interest rate pressure is upwards, consumer debt is at record levels, bankruptcies similarly.....it's not a good scenario for the bulls.

As we enter the autumn I see prices dropping 10% +, and that's if we get an orderly drop. If the political situation worsens (Iran invasion, for example) then I smell a crash and more.

Tro

Surely if Iran invades us, there will be more demand for housing.

I'll put my hand up as a crash person. On virtually any historical measure house prices are 'crazily high'. There are a few things supporting prices:-

1) There is a lot of demand for houses - although this may stem largely/partially from an expectation of rising prices

2) With today's low interest rates, houses are reasonably affordable for most people - at the moment

3) Finance is readily available

On point (1) demand would fall a fair bit if the expectation changed to stable rather than rising. If the expectation changed to falling prices, then virtually no new buyers would come into the market. So confidence is crucially important. If prices start to fall then a change in confidence could snow-ball the effect.

On point (2) I don't see much change at the moment. Any recession, even a mild one, could alter that.

On point (3) the Bank of England is very concerned about current lending levels. If the bank reins in the lenders, then this could trigger a fall in prices. That, in turn, could lead to a drop in confidence, etc.

Finally, I'm not too sure about a crash. However, I could see a really long period of stagnation or very slow increases in prices.

It's a 70 year cycle. What can you do? You'll notice I was always mealy-mouthed about timing for specifically that reason.

If I could time cycles of that length, I'd be too rich to talk to y'all.

Does the Pope shit in the woods?

Swapped onto second mortgages. That's a sign of the end times.

I moved into rented accomodation at 18 so I guess a 90% fall would about cover it. It's the wrong question though since when I was 18 I wanted to blow my money on sex, drugs and rock'n'roll, not a sodding mortgage debt.

FoFP

Nobody wants to catch a falling knife. Not even Romulans. When psychology flips, it flips whatever the prevailing circumstances. Credit bubbles are irrational.

FoFP

Why else would they be following in Iraqs footsteps and building Nuclear Weapons, if not to invade us (or our allies) ?

Nuclear weapons are about insurance in this day & age, and Iran has had a lot of reasons to feel oppressed in recent decades (thanks mainly to Iraq). That breeds a defensive mentality and promotes radicalism.

Now Bush's cronies have it targeted as the latest "Evil Empire" because it's always important for the neocon war machine to have an Evil Empire to fight.

I'm not saying I want Iran to have nuclear weapons, but I think we & the USA are currently doing our level best to make sure moderate Iranians are overwhelmed by the radicals. *That* is the problem, not theoretical weaponry.

Andrew McP

Stay tuned, it will crash... it always does after a boom.

Predicting exactly when is hard though. It was hard to say exactly when the US bubble was going to burst. But, it is in free-fall now.

Tumbleweed wrote:

I notice Tumbleweed set something off there!! In my area there are still a lot of reductions in the estate agents...but not just north lincolnshire. I notice on a recent visit to pickering north yorks that even there the estate agents have reduced prices. Its still a buyers market....