How Far Will House Prices Fall? [Volume 6]
Discussion
JagLover said:
okgo said:
Stuff is moving. If it’s decent.
YesAs mentioned before I am monitoring a specific 1/4 mile radius and something came up that I was interested in and then sold within two days. Stuff that is listed at prices that would have looked high at peak tends to just sit there.
Good stuff (not needing work) listed at a sensible discount to peak goes very quickly, and close to/at list. “Sensible discount” tends to be 10-15%.
Vendors seeking peak pricing are disappointed and the houses just sit there. I’m aware of one house that’s been listed for £1.4M for 6 months, they’ve had 2 offers at +/- £1.2M. Vendors are holding on because “the neighbours sold for £1.375M”.
skwdenyer said:
princeperch said:
https://www.rightmove.co.uk/house-prices/details/e...
This was the one I sold. If the new vendor gets 700k for the one that's just gone up for sale, the new purchaser will have "lost" a loft conversion in the space of a year.
Interesting. According to house metrics, yours is the same size as #81. Not sure of the data source but clearly not right - I’m guessing it is EPC data or similar.This was the one I sold. If the new vendor gets 700k for the one that's just gone up for sale, the new purchaser will have "lost" a loft conversion in the space of a year.
okgo said:
gotoPzero said:
People just dont get it do they, the people who sold at higher price also paid a higher price for their next place.
Does my head in!
That would mean all house prices fell equally. Does my head in!
I spoke to a few agents last week and around here £800k properties are flying off the shelf where as £400k and £1.3m+ are slow…so your 1.3m property could need a big cut to get it sold and your down-size to an £800k means you over[any due to demand in that sector.
https://www.telegraph.co.uk/business/2023/04/09/uk...
It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
princeperch said:
https://www.telegraph.co.uk/business/2023/04/09/uk...
It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
I read that this morning over my porridge and thought the author was obviously in the market to buy a property and desperately trying to talk everything down. It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
Diderot said:
princeperch said:
https://www.telegraph.co.uk/business/2023/04/09/uk...
It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
I read that this morning over my porridge and thought the author was obviously in the market to buy a property and desperately trying to talk everything down. It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
G-wiz said:
Diderot said:
princeperch said:
https://www.telegraph.co.uk/business/2023/04/09/uk...
It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
I read that this morning over my porridge and thought the author was obviously in the market to buy a property and desperately trying to talk everything down. It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
- How many households fall into distress from interest rate hikes?
- How many (non-distressed) homeowners decide to sit tight and not sell, restricting supply?
I think actually we’re seeing it now in some areas. Where I’m looking the transactions that are actually happening prices agreed are 10-15% lower than peak. This will take 6-9 months to show up in the stats, so combined with inflation I wouldn’t the surprised if we are looking at a 25-30% drop in real terms by the end of the year.
But equally there are a lot of transactions not being agreed with vendors unwilling to accept the prices buyers are offering.
Could things fall further? Perhaps.
Equally, if the labour market remains tight then we could see nominal wages increase 10% over the next 18 months, which will increase affordability, reduce distress and undo some of the 10-15% nominal drop we are seeing right now.
To what extent is the housing market based on feel? If we all feel its going tits up will prices go down or will ultimately the lack of supply keep prices reasonably stable
The price rises since Covid are stupid - I saw a 2 bed house rise 40k in 2 years (was 260k then was 300k) - so a drop to that level is the minimum I'd want but ideally something more substantial.
The price rises since Covid are stupid - I saw a 2 bed house rise 40k in 2 years (was 260k then was 300k) - so a drop to that level is the minimum I'd want but ideally something more substantial.
Fusion777 said:
Is there a lack of supply, or has there just been an excess of people stretching to afford housing?
I assume soI suspect there are a lot of people like me who want to buy a house but have been put off by high prices. If prices came down they might go back up again as people start trying to buy at cheaper prices.
G-wiz said:
Diderot said:
princeperch said:
https://www.telegraph.co.uk/business/2023/04/09/uk...
It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
I read that this morning over my porridge and thought the author was obviously in the market to buy a property and desperately trying to talk everything down. It's almost as if the telegraph has shorted the market the amount of doom and gloom they are constantly publishing.
The bloke in the article looks exactly like the type of bloke to come steaming into a deal kicking everyone in the nuts after finding out they are one step away from insolvency.
okgo said:
But now you’re just paying the difference in interest?
.
In abstract isn't it better to buy when rates are high and prices are low than when rates are low and prices high?.
Falling rates may lead to higher prices (easy to sell and scope for capital appreciation) and lower monthlies.
Rising rates may lead to lower prices (so it is hard to sell) and higher monthlies.
xeny said:
In abstract isn't it better to buy when rates are high and prices are low than when rates are low and prices high?
Falling rates may lead to higher prices (easy to sell and scope for capital appreciation) and lower monthlies.
Rising rates may lead to lower prices (so it is hard to sell) and higher monthlies.
Yes.Falling rates may lead to higher prices (easy to sell and scope for capital appreciation) and lower monthlies.
Rising rates may lead to lower prices (so it is hard to sell) and higher monthlies.
(If you can afford it)
I don’t think we’ll see much “full fire sale”.
a) There won’t be masses in distress. Whilst a lot of people will see significant rate rises as fixes end, this is spread over a long period and the majority will have enough headroom in their income to cover it, especially if they extend the term.
b) Banks will try to avoid repossession if they can possibly do so. And in most cases there will be significant equity in the property.
The two big unknowns are
- How many people levered up and bought at the peak? They are most at risk. However they’re also the most likely to have a 5-year fix.
- What happens to the labour market? If it remains tight then people will keep their jobs and see 5% (close to inflation) pay rises over the next year or two - that will really help affordability. But if people start losing jobs then it’s a very different situation.
a) There won’t be masses in distress. Whilst a lot of people will see significant rate rises as fixes end, this is spread over a long period and the majority will have enough headroom in their income to cover it, especially if they extend the term.
b) Banks will try to avoid repossession if they can possibly do so. And in most cases there will be significant equity in the property.
The two big unknowns are
- How many people levered up and bought at the peak? They are most at risk. However they’re also the most likely to have a 5-year fix.
- What happens to the labour market? If it remains tight then people will keep their jobs and see 5% (close to inflation) pay rises over the next year or two - that will really help affordability. But if people start losing jobs then it’s a very different situation.
Not sure if this has been posted before but it gives a useful picture of the potential for crash and repossessions (or lack of)
https://residential.jll.co.uk/insights/research/jl...
https://residential.jll.co.uk/insights/research/jl...
brickwall said:
I don’t think we’ll see much “full fire sale”.
a) There won’t be masses in distress. Whilst a lot of people will see significant rate rises as fixes end, this is spread over a long period and the majority will have enough headroom in their income to cover it, especially if they extend the term.
b) Banks will try to avoid repossession if they can possibly do so. And in most cases there will be significant equity in the property.
The two big unknowns are
- How many people levered up and bought at the peak? They are most at risk. However they’re also the most likely to have a 5-year fix.
- What happens to the labour market? If it remains tight then people will keep their jobs and see 5% (close to inflation) pay rises over the next year or two - that will really help affordability. But if people start losing jobs then it’s a very different situation.
People only have headroom if they have a job, or maintain their income. If everyone tightens their belts (rising rates, inflation, mostly-below-inflation pay rises, etc) then consumer spending tanks, which in turn pulls down quite a lot of the economy.a) There won’t be masses in distress. Whilst a lot of people will see significant rate rises as fixes end, this is spread over a long period and the majority will have enough headroom in their income to cover it, especially if they extend the term.
b) Banks will try to avoid repossession if they can possibly do so. And in most cases there will be significant equity in the property.
The two big unknowns are
- How many people levered up and bought at the peak? They are most at risk. However they’re also the most likely to have a 5-year fix.
- What happens to the labour market? If it remains tight then people will keep their jobs and see 5% (close to inflation) pay rises over the next year or two - that will really help affordability. But if people start losing jobs then it’s a very different situation.
There are an awful lot of people who seem to think reduced consumer spending won’t impact the economy. It isn’t clear why this is.
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