House Price Crash!!!!

[nutty]

sorry - just to wake up any EDFers on a Friday afternoon. I'm getting really bored with reading stories about how a crash is around the corner :) Seem to have been reading them for the last 7 years. No doubt it will come eventually, and then they'll rise again ad infinitum

[Mark]

If there was a house price crash and my property went down to its original value should I be bothered? Other property prices would be reduced too so if I wanted to move then, if anything, I get something more for my money? Or am I talking cr*p?

And when is a crash a crash? Do values have to drop a certain amount for it to be called a crash?

[mockney piers]

If a house price crashes in a forest of unseemly estate agents, but it's bank holiday and everyone is in brighton, does it really matter?

[louisiana]

If prices crash at any given time, there will always be a proportion of 'owners' who will be mortgaged to the hilt on the previous value (or worse - see recent 125% mortgages), so could not sell up as they would be significantly out of pocket. This might seize up the housing market. There would likely be far fewer properties on the market. It might be difficult to move.

Many people are now borrowing crazy multiples, so with rates rising, things may get sticky.

[karter]

To put in simply......Karter thinks that as London is now the financial capital of the world and Dulwich seems to house many city folk and people are buying houses in the area using their city bonuses ( fuelling prices) then Duwich will not be affected massively by a bursting bubble. London is working to accomodate the olympics and improving transport. Many folk around the country will undoubtedly lose out as they have over-commited and are not cash rich and rents may not cover mortgage so re-posessions may occur. I don't think many Dulwich folk will lose out but some may obviously will.

Just play it safe and don't over-commit I say or sell now at peak time as many are starting to do. The other thing that seems to prompt people to sell now is this homebuyers survey report that the seller must pay for possibly coming into play soon.Ok ok who's going to start slating what Ive said? (6)

[macroban]

karter's good advice from one year go in April 2007.

Who followed it then instead of now wishing they had?

[bignumber5]

And when is a crash a crash?

Me-thinks negative equity is the key - papers yesterday were quoting various authorities stating a 10% drop in the next year and a further 5% the following year, then levelling out. This equates to a return to 2006 prices.

[karter]

Macroban, rumour has it though that many city jobs are to go, not good for many dulwich folk.

[Brendan]

Ahhh diddums.

[LuvPeckham]

I am looking at the concept of a house price crash which is being fanned by the media at the moment.

It is an interesting thought, that if people who didn't need to sell / move didn't put their houses on the market, then the available stock would be reduced, thus keeping prices buoyant.

However as soon as the media start talking crashes, job losses in the city and so on (like they are now) then some people either panic or are forced to sell (due to lost earnings, inherited home or any other reason) which puts a glut of properties on the market and buyers holding back waiting for prices to spiral downwards.

I guess the real question here is, are the media causing the current crisis in house prices, much like they have been responsible for hyping them up to unrealistic levels over the past few years, or is there a genuine problem in the economy forcing people to sell no matter what they loose?

I believe that it would be an interesting experiment for East Dulwich to see what would happen if there is a reduced number of properties for sale, by choice of the sellers, thus keeping demand for the few available properties high and in turn keeping it a bit of a sellers market.

Would prices here fall in line with the rest of the UK / London, or would they remain as they are? It the latter then it would end up creating media interest into why ED is bucking the trend, features in Homes and Properties (or similar publications) suggesting that ED is the place to buy to avoid the crash and therefore attracting people to the area who have the money to afford the artificially inflated (bit limited availability) housing stock.

I also personally believe that should most people who don?t need to sell, but are selling anyway, then not accept falling house prices (stick to the price they expect), then the statistics for an area would show that the average house price hasn?t fallen (but may take time to sell) resulting in the area bucking the media prediction and general trends.

However this is all academic as it will only effect each one of us when we come to sell our properties, and at which time the choice is simple, accept the market value knowing that where you move to will also be at that new higher or lower market value, which ultimately results in no real gain or loss to people selling up to move on.

Is East Dulwich brave enough to take this on as an experiment (and by reducing available housing stock, maybe, just maybe we can reduce the number of estate agents (F for example) downwards as well?..