Are we heading for the biggest housing crash in history?

fluxo

Distinguished Member
Central banks are under pressure to do something and there's only one something they can do - raise interest rates.

Yeah.. that'll get the supply chains moving and stop Putin's tanks.

I think it’s about secondary effects, not the initial drivers of inflation.
 

domtheone

Distinguished Member
I totally agree with you.

This inflation monster is getting totally getting out of control. I believe by the end of the year the state of the economy is going to be so bad we will be seeing mass job cuts due to many people cutting back on their spending and only buying the essentials.

I expect to see bonds crash, the housing market will crash and the biggest one of them all to crash will be the stock markets, this will send shockwaves through to the global economy.

This will be carnage.
Wouldn’t necessarily disagree but, Bonds, may well do. Stock markets. We’ve had crashes and mini crashes (hell another mini one today stateside) so not too worried about that. US markets were in cloud cuckoo land already though and due a correction. As usual, the UK markets will follow the US as it can’t stand on its own 2 feet.

The biggest one of all to me though is the housing market. This wont crash. They simply wont let it. Maybe a small correction by 10% or so. (I’d consider a full blown crash as 30-70%).

If rates were to rise to what they should be (several %%%) then that may very well crash the housing market. Our government won’t let rate rises go that far. Already some nutters are calling for rate cuts (lol) due to the recession that’ll be coming along soon.
 

TonyTeacake

Active Member
Outlook For 2022 - 2023 Doesn't Look Good

We aren’t seeing wages rising above inflationary levels so a wage-price growth spiral seems unlikely at the moment. Whilst Western economies were awash with central bank printed cash it has mostly ended up inflating assets (property and shares) rather than in the pockets of the average member of the public; some cash savings were built up during the pandemic (due to support measures and enforced economic inactivity) but those surpluses seem to have been unwound fairly quickly as economies reopened, leaving little to drive demand-side inflation.

The outlook for 2022-2023 doesn't look good, as we get closer to winter it looks like it will be getting a lot worse, especially when we are going to see more energy price hikes. The cracks are now starting to show in the economy after the pandemic. It looks like many businesses are already starting to suffer and it won't be too long before we start seeing some of them closing their doors for good.

The housing market is already slowing down with all that pent-up demand disappearing, I think most of us knew it wouldn't last. Unfortunately, these are going to be very tough times for a lot of people. There is a lot of talk about there being food shortages in the upcoming months which is a major concern. The longer this war goes on with all the sanctions the West has imposed on Russia are going to have a huge effect on all of us.

It looks like we are heading into recession officially this year, although I think we are already in one. Do you think we will see global economies collapse in the near future?

Please share your thoughts?
 
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Outlook For 2022 - 2023 Doesn't Look Good

We aren’t seeing wages rising above inflationary levels so a wage-price growth spiral seems unlikely at the moment. Whilst Western economies were awash with central bank printed cash it has mostly ended up inflating assets (property and shares) rather than in the pockets of the average member of the public; some cash savings were built up during the pandemic (due to support measures and enforced economic inactivity) but those surpluses seem to have been unwound fairly quickly as economies reopened, leaving little to drive demand-side inflation.

The outlook for 2022-2023 doesn't look good, as we get closer to winter it looks like it will be getting a lot worse, especially when we are going to see more energy price hikes. The cracks are now starting to show in the economy after the pandemic. It looks like many businesses are already starting to suffer and it won't be too long before we start seeing some of them closing their doors for good.

The housing market is already slowing down with all that pent-up demand disappearing, I think most of us knew it wouldn't last. Unfortunately, these are going to be very tough times for a lot of people. There is a lot of talk about there being food shortages in the upcoming months which is a major concern. The longer this war goes on with all the sanctions the West has imposed on Russia are going to have a huge effect on all of us.

It looks like we are heading into recession officially this year, although I think we are already in one. Do you think we will see global economies collapse in the near future?

Please share your thoughts?

Sounds about right.

It's an ongoing problem of complex global supply chains having been disrupted, plus plain old price gouging. Not over-heating demand or wage-price spirals.

Given which, raising interest rates is unlikely to help and might well hinder.
 

TonyTeacake

Active Member
Sounds about right.

It's an ongoing problem of complex global supply chains having been disrupted, plus plain old price gouging. Not over-heating demand or wage-price spirals.

Given which, raising interest rates is unlikely to help and might well hinder.
I think the heat is starting to cool in the housing market. It will be interesting to see where we are in a few months.

I can see house prices slowly starting to drop and once this inflation monster deepens into the economy I expect we will see a big crash in prices.
 
I think the heat is starting to cool in the housing market. It will be interesting to see where we are in a few months.

I can see house prices slowly starting to drop and once this inflation monster deepens into the economy I expect we will see a big crash in prices.

Yep, likely direction of travel.

I'd guess before the housing market crashes, the "independent" central bank will help the govt find a few hundred £Bn down the back of the sofa to throw at first time buyers, subsidise private rents and maybe even build some social housing.

It might or might not keep the housing bubble economy going, but things that can't go on forever can go on for a surprisingly long time. By the time it bursts, the Tories will have popularised a new narrative by which they have saved the housing market, and which the "opposition" will have bottled out of challenging.
 

LakieLady

Distinguished Member
I think the heat is starting to cool in the housing market. It will be interesting to see where we are in a few months.

I can see house prices slowly starting to drop and once this inflation monster deepens into the economy I expect we will see a big crash in prices.

I think so too.

A few months ago, a house near me came on the market, had six viewings on the first day It and 4 offers from those viewings. It was sold for a fair bit over the asking price. There's one on the market at the moment, essentially identical but in better nick and more modern. It's been on the market 3 weeks, and not under offer yet.

It's the first time in years that a house round here hasn't sold quickly, save for a couple that were massively overpriced.
 

TonyTeacake

Active Member
I think so too.

A few months ago, a house near me came on the market, had six viewings on the first day It and 4 offers from those viewings. It was sold for a fair bit over the asking price. There's one on the market at the moment, essentially identical but in better nick and more modern. It's been on the market 3 weeks, and not under offer yet.

It's the first time in years that a house round here hasn't sold quickly, save for a couple that were massively overpriced.
I am also noticing this with houses not shifting as quick, I can see a big slowing playing out.

Personally, I don't think this inflation will be dealt with in the next 12-18 Months. If you look back in history we had high inflation from the late 60s through to the early 80s and it was only when Paul Volcker who was the head of the Fed raised interest rates to 20% that it brought inflation under control. We are way off with interest rates being at 1% to get this under control. The government can't really print any more money as this will only push inflation even higher, plus the government have so much debt caused by the pandemic.

I believe one thing that will cause the housing crash is the job markets. Many businesses are already seeing a big slowdown in turnover which will inevitably lead to many job losses. When many people have to spend most of their incomes on the basics like food, gas & electricity, utilities, fuel, etc, this is where the real economy starts to suffer. As long as all of these prices stay high we will see a big slowdown in the economy and we will see many people losing their jobs.

Let us not forget there is a big problem with a lot of commercial properties being empty. Now the owners of these buildings cannot afford these anymore due to them being empty, they are going to give these back to the banks or put them on the market selling for great losses. But these commercial backed securities are derivatives on these things, pension funds and life insurance companies are the holders of these notes. This will be one of the major contributors to the housing market collapse it will be like a domino effect. Also if the stock market crashes this will take the real estate market down.

People have to understand everything is tied in together. Like I've said before this crash will be worse than 2008 and I can already see this playing out already, but with the housing market, you don't always see it straight away. but one thing is for sure it is coming and I believe it will be well over 30%.
 

TonyTeacake

Active Member
Yep, likely direction of travel.

I'd guess before the housing market crashes, the "independent" central bank will help the govt find a few hundred £Bn down the back of the sofa to throw at first time buyers, subsidise private rents and maybe even build some social housing.

It might or might not keep the housing bubble economy going, but things that can't go on forever can go on for a surprisingly long time. By the time it bursts, the Tories will have popularised a new narrative by which they have saved the housing market, and which the "opposition" will have bottled out of challenging.
It does make you wonder what Boris and his cronies will try and do to save the housing market. Personally, I can't see any way out of this one as things in the economy are going to get so bad.
 

domtheone

Distinguished Member
^^^
They'll find a way. Dream up some new joke of a policy to keep the house of cards propped up.

Not just exclusive to the UK as the crazy housing bubble exists all over the world.

Even prices in America have gone ballistic over the last few years. Be interesting to see if they let nature take its course over there. Assuming Sleepy Joe is aware of such matters.
 

Xenomorph

Member
There's a house up for sale near us. They bought it for £415k two years ago. The asking price now is an incredible £625k. It's nothing special either. I'd be amazed if they get that money, but we'll keep an eye on it.
Crazy if it sells for that.
 

Roger3

Well-known Member
No sign of any slow down around me. Almost all new listings still getting multiple offers above asking. The only ones staying on the market have serious issues and even they're going quite quickly.
 

TonyTeacake

Active Member
Reminds me of this!


The Big Short movie.

If you remember just before the 2008 crash there was a few people saying they will be a crash and Peter Schiff was one of them. He was laughed at by the so called experts and then we all know what happened next. He is also saying this time around this will be a lot worse than 2008, much worse.

You can find him on YouTube.
 

TonyTeacake

Active Member
No sign of any slow down around me. Almost all new listings still getting multiple offers above asking. The only ones staying on the market have serious issues and even they're going quite quickly.
Not sure where you are. Looking on rightmove and zoopla properties are definitely not shifting as quick. I've seen quite a few reduced which is a good indicator to where we are heading.
 

TonyTeacake

Active Member
There's a house up for sale near us. They bought it for £415k two years ago. The asking price now is an incredible £625k. It's nothing special either. I'd be amazed if they get that money, but we'll keep an eye on it.
Crazy if it sells for that.
You will have to keep is posted. A house is only sold when contracts are exchanged.
 

Tight Git

Distinguished Member
Ever since I bought my first house in 1968, there's been talk of a crash, but (apart from the occasional short term blip) the prices just keep going up and up.

Supply & demand rules, ok? :smashin:
 

TonyTeacake

Active Member
Ever since I bought my first house in 1968, there's been talk of a crash, but (apart from the occasional short term blip) the prices just keep going up and up.

Supply & demand rules, ok? :smashin:
Long term prices will always go up. Supply and demand goes out of the window when we have recessions.

I believe we are heading for one of the worse recessions in history so expect some big drops in house prices.
 

TonyTeacake

Active Member
Are these the same financial "experts" who keep saying a house price crash is round the corner?

Obviously it's up to you who to believe, but I've been right for the last half century! :thumbsup:
We had a big crash in the early 90s. Also a crash in 2008. If my maths are correct that is within the last 50 years.
 

Tight Git

Distinguished Member
We had a big crash in the early 90s. Also a crash in 2008. If my maths are correct that is within the last 50 years.

What you call crashes, I call blips, because they are short term only and the market soon recovers.

Overall, it's been up up up for the last half century.

My first bungalow cost £4,500, my present bungalow £700,000, and the house I used to own in London, well over a million.
 

TonyTeacake

Active Member
What you call crashes, I call blips, because they are short term only and the market soon recovers.

Overall, it's been up up up for the last half century.

My first bungalow cost £4,500, my present bungalow £700,000, and the house I used to own in London, well over a million.
I think many people will disagree with you especially the one's who lost there properties during these times.
 

Tight Git

Distinguished Member
It's not me they would be disagreeing with, I've simply stated the statistics, that house prices have increased approx 100 fold in the last half century.

Whether that's a good or bad thing is debatable, but as a long term investment, you can't go wrong.
 

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