Has the housing market in ED reached its bottom yet?

[snorky]

Snorky has ?100K in CASH waiting for an SE22 4/5 bed semi detached property

Sell your property to snorky NOW

Snorky pays ???CASH??? for your rapidly depreciating bolt hole with period fittings

Instant decisions 24/7

Dont delay, sell to snorky NOW

Hurry Hurry

this ???? madness cannot last

[macroban]

Sorry, snorky, but the back of your envelope needs new batteries.

You will need at least ?200k at bottom.

[Jeremy]

I imagine prices will fall until properties become a viable buy-to-let investment again. So with current rents, that will probably be about 400 - 450K for a 4 bed house.

[lard]

Jeremy Wrote:

-------------------------------------------------------

> I imagine prices will fall until properties become

> a viable buy-to-let investment again. So with

> current rents, that will probably be about 400 -

> 450K for a 4 bed house.

You are discounting the 10% (at least in this instance) overshoot that happens in any cycle. A herd of sheep are difficult to turn back uphill when they are running at full pace down the hill.

[Jeremy]

You may be right... may possibly still be a useful indication of when we are starting to reach the bottom.

[benmorg]

the collapse of Lehman Bros & takeover of merrill Lynch isn't going to help house prices in East Dulwich. 5000 people made redundant in one fell swoop. A lot of city workers in other firms are also feeling insecure about their jobs and will be putting house buying plans on hold. The market is now being squeezed at both ends: first-time buyers are running scared of negative equity or can't get mortgage finance; city whizzkids are losing their jobs and/or bonuses and won't be buying the top-end stuff.

[lard]

Jeremy Wrote:

-------------------------------------------------------

> You may be right... may possibly still be a useful

> indication of when we are starting to reach the

> bottom.

Yes definitely - the bottom is the time when btl becomes attractive again and this is a decent indicator. However over time variables can change. Factoring in higher inflation, higher interest rates etc and you'll get a totally different figure. Throw in a few hundred thousand more out of a job and you'll get different demand for these houses etc.

Any one of these can change in order to make BTL unattractive and it is too simplistic to only use current figures.

Any way we look at it, they are still only going one way for a little while, and it isn't the bottom yet.

For those that are interested in seeing real prices, and not those quoted in Estate Agent windows which will never sell, here is a link to a house sold today via auction. Needs some work presumably to reconvert back, but gives an indication of current price:

http://www.eigroup.co.uk/onlineauctions/lotpub.asp?a=10721&l=512794

It went for ?287,500

[AcedOut]

I got an offer accepted of ?460 on a 5 bed semi in ED, but I pulled out. It's still on the market at considerably higher than that.

[AcedOut]

lard - but it also states that it requires extensive refurbishment. Even so, looks like a bargain.

[ibilly99]

For folks that have been on Mars this is a historically unprecedented financial crisis - as the front page of the FT says we are on a precipice - nobody is trusting anybody and the credit markets are seizing up LIBOR is soaring and huge wealth is being destroyed - there are no road maps for this but if you are buying at the moment DON'T this is a mega crash and has been expected for a very long time.

Moving forward there is just not the money in the global financial system and where it is they will be very reluctant to loan it to those that have just p**ssed it away. Mortgage resets will be at much higher rates and a load or repos will hit the market prices are going only one way I'm afraid.

[SeanMacGabhann]

But once the dust settles, won't this be a good thing in the longer term?

[Brendan]

Sean, how can you ignore the unfathomable loss society and culture will suffer when people can no longer wank on about house prices? The whole dynamic of the suburban dinner party will never be the same again.

[SeanMacGabhann]

well, since you put it like that Bren

(oh and a belated welcome back btw)

[Peckhamgatecrasher]

Maybe we could discuss the parlous state of education instead?

[????]

housing market - education - healthcare ....all f*cked.... was it only 11 years ago that "Things can only get better"?

[Brendan]

I'll get back to you on that one as soon as I have looked parlous up in the dictionary.

[Shaggy]

ibilly99 Wrote:

-------------------------------------------------------

> For folks that have been on Mars this is a

> historically unprecedented financial crisis - as

> the front page of the FT says we are on a

> precipice - nobody is trusting anybody and the

> credit markets are seizing up LIBOR is soaring and

> huge wealth is being destroyed - there are no road

> maps for this but if you are buying at the moment

> DON'T this is a mega crash and has been expected

> for a very long time.

>

> Moving forward there is just not the money in the

> global financial system and where it is they will

> be very reluctant to loan it to those that have

> just p**ssed it away. Mortgage resets will be at

> much higher rates and a load or repos will hit the

> market prices are going only one way I'm afraid.

CALM DOWN!! This is not an historically unprecedented financial crisis yet. Things could get much worse or the boil could be lanced. Market sentiment moves from greed to panic. Now we are in panic-mode. . We haven't entered a second Great Depression just yet, and frankly anybody who was surprised by Fannie, Freddie and Lehman hasn't been paying attention. The FT, by the way, isn't the Oracle of All Wisdom. They are happy to whip up hysteria now that some people are actually reading their turgid, complacently-written articles.

It really would not be a good idea to put in an offer for a house this week, or next for that matter. The economy isn't going to get better overnight and a housing boom isn't on the cards any time soon. The only problem is that we have to trust our political leaders to act sensibly, and hope that people in Canary Wharf making their own decisions stop running around the room with their underpants on their heads shrieking ``THE WORLD IS ON THE BRINK!!!!!! THE MARKET IS PUKING ALL OVER US!!!! THERE IS NO CAPITAL LEFT IN THE WORLD!!!!"

[AcedOut]

It's interesting that when Lloyds-TSB wanted to take over Abbey last year that they were rejected by the competition & monopolies commission. But in the current climate, the government are practically begging LLOY to buy HBOS! This is fine in the short term, but when the high-street only has two retail banks, that's not going to be good for the consumer. It will translate to uncompetitive rates in just about every banking product - mortgages included.

I can't see how any of this is going to be good in the medium-term. Long term, perhaps the increased regulation will strength and secure capital markets, but that's a good decade away now I'd say.

[danrees]

Shaggy Wrote:

-------------------------------------------------------

> ibilly99 Wrote:

> --------------------------------------------------

> -----

> > For folks that have been on Mars this is a

> > historically unprecedented financial crisis -

> as

> > the front page of the FT says we are on a

> > precipice - nobody is trusting anybody and the

> > credit markets are seizing up LIBOR is soaring

> and

> > huge wealth is being destroyed - there are no

> road

> > maps for this but if you are buying at the

> moment

> > DON'T this is a mega crash and has been

> expected

> > for a very long time.

> >

> > Moving forward there is just not the money in

> the

> > global financial system and where it is they

> will

> > be very reluctant to loan it to those that have

> > just p**ssed it away. Mortgage resets will be

> at

> > much higher rates and a load or repos will hit

> the

> > market prices are going only one way I'm

> afraid.

>

>

> CALM DOWN!! This is not an historically

> unprecedented financial crisis yet. Things could

> get much worse or the boil could be lanced. Market

> sentiment moves from greed to panic. Now we are in

> panic-mode. . We haven't entered a second Great

> Depression just yet, and frankly anybody who was

> surprised by Fannie, Freddie and Lehman hasn't

> been paying attention. The FT, by the way, isn't

> the Oracle of All Wisdom. They are happy to whip

> up hysteria now that some people are actually

> reading their turgid, complacently-written

> articles.

Agree with this. I am a Chartered Accountant with an Economics degree but bloody hell, the FT is boring as it gets. Poorly written articles, whose authors do not seem to understand that news needs to entertain as well as present facts in the most sterile manner possible.

[Shaggy]

Guess what? The FTSE 100 is having its biggest rally since it started in 1984. Bank shares are surging, and property shares moving up faster than they have ever done in the last 23 years. See what I mean by the markets flipping between greed and panic? We may not be all doomed after all. Unless they flip back over to panic tomorrow, in which case people will wtart shouting:

"WE ARE STANDING ON THE BRINK OF A GREAT DEPRESSION THAT WILL MEAN THAT ALL HOMES IN EAST DULWICH WILL BE WORTH LESS THAN NOTHING AND ANBODY WHO HAS A MORTGAGE SHOULD JUST JUMP INTO THE POND IN PECKHAM RYE WITH STONES IN THEIR POCKETS AND ACCORING TO THE FT THING ARE WORSE NOW THEN THEY WERE DURING THE BLACK DEATH"

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5ltLvxOzjvA&refer=worldwide

[*Bob*]

What's going on? Is something bad happening?

Honestly.. I wish we could all be kept more informed about these things by the press, news etc.

[macroban]

Dead cat bounce.

[Peckhamgatecrasher]

At least there's a precedent for having a plague pit at Goose Green.

[SteveT]

They should throw into the plague pit, all the bankers with an estate agent under each arm.

[AcedOut]

SteveT - You must be a lucky man being able to buy a house with cash. Most people need some form of lending, so it would be tough without the banks around. I'll happily allow the estate agents to fall in the pit though - it's not like we need people to tell us what a room looks like and taking a fee for doing so...