House Prices in Edinburgh in 09.

[Munch]

All the Economists are predicting a small price gain with Edinburgh House prices in 09, with a strong recovery going into 2010/2011.

 

These are the same guys who get paid fortunes for this work who predicted in July this year WAIT FOR IT (Drum Roll ) That oil would be 200 dollars a barrel by November

 

Do these guys actually ever get anything right ?

[Coco]

All the Economists are predicting a small price gain with Edinburgh House prices in 09, with a strong recovery going into 2010/2011.

 

These are the same guys who get paid fortunes for this work who predicted in July this year WAIT FOR IT (Drum Roll ) That oil would be 200 dollars a barrel by November

 

Do these guys actually ever get anything right ?

 

What economists are predicting price gains in 2009?

[blairdin]

Somebody better send am ambulance to Coppercrutch's place - he will have an MI, spontaneoulsly combust followed by a stroke before before regaining his composure to rubbish this story!

 

Joking apart, whilst I don't subscribe to some of the worst case scenarios that are often discussed and debated here, I certainly don't expect there to be any major gain in house prices in 2009.

[coppercrutch]

Jambosrbarry I think you have been on the funny juice.

 

I think you are getting confused between 'economists' and 'desperate Edinburgh Estate Agents who are about to lose everything'.

 

 

Two very different beasts.

 

99.9% of economists are predicting house prices across the UK falling by at least 15% next year to add to the 15% they have fallen already this year. Edinburgh is no different to that. In fact I think Edinburgh will be one of the hardest hit areas.

 

The only time house prices will start rising again is when people have confidence -The economy is growing again - Lots of jobs are available and redundancies have slowed to a trickle. Only at that point will people even consider paying more than they have to for something that is falling in price. All these thoughts that house prices will magically pick up again in 2010 are optimistic in the extreme. If the economy is in the ****s for 5 years, which is looking more and more likely, house prices will not rise in any amount great amount for at least 5 years. It really is pretty simple.

 

House price in Edinburgh will fall by at least 40% in real terms from their peak in the summer of 2007 - 99.99% FACT.

 

The only question is how long this will take and in what form will it will come. That is dependant on what happens with inflation, specifically wage inflation.

 

Anyway I think this has ben done to death has it not.

[Rab]

Any chance people could stop talking about what mythical economists are saying, and start posting links?

[coppercrutch]

Any chance people could stop talking about what mythical economists are saying, and start posting links?

 

Would be nice !! I think the OP must be confused. Either that or invented a time machine !!

 

Anyway to give you the picture pretty much every report you see on TV and in the papers these days states prices will fall by another 15% next year at least and be down over 30% from their peak. They all also seem to think that in 2010 the economy will pick up again, we will be through the worst and house prices will start to creep back up again.

 

I can't see it really. Economy has to take more than a few years to pick up again ? Maybe not but it is in such a mess I can't see anything like a quick recovery.

 

As for houses - the simple fact people expect prices to fall that much, and are being told it almost every day, means most buyers will factor that 'discount' into their offers. This will only push prices down further.

 

Interesting piece on Ch4 news last night about the foreclosure bus tours in Las Vegas. People were actually only looking at the moment whereas 6 months ago they were buying 'bargains'. Problem being the 'bargains' of 6 motnhs ago are now overpriced. Everyone is scared as what is the point in buying when it looks like they will go lower.

 

Houses they were looking at were large detached 4 bed villas. Down from $350k to $150k. Even at this price most were not interested.

 

Just shows how insane it is paying $200k for a one bed flat in Gorgie !! You can get a nice big house with a pool for that in many places in the states.

 

How is it in your neck of the woods ? Reckon there will be a wee uprising of exhuberance following Obamas victory* next week ? Few weeks of stock rises etc.. until people realise the same issues are still apparent ?

 

If I had a pension linked to the stock market I would be using the middle of November as a nice exit point to get into cash. But then again who ****ing knows these days !!

 

 

*Assumption

[Rab]

Would be nice !! I think the OP must be confused. Either that or invented a time machine !!

 

Anyway to give you the picture pretty much every report you see on TV and in the papers these days states prices will fall by another 15% next year at least and be down over 30% from their peak. They all also seem to think that in 2010 the economy will pick up again, we will be through the worst and house prices will start to creep back up again.

 

Link?

 

I can't see it really. Economy has to take more than a few years to pick up again ? Maybe not but it is in such a mess I can't see anything like a quick recovery.

 

The optimist in me says we'll see signs of the bottom being hit in early 2009. By then hopefully the governmental strategies will be paying off, banks will start lending again and people waiting for house prices to fall will be chomping at the bit to get a bargain.

 

As for houses - the simple fact people expect prices to fall that much, and are being told it almost every day, means most buyers will factor that 'discount' into their offers. This will only push prices down further.

 

Eventually, as I said above, the people who are holding off, waiting for a bargain, will take the plunge which will raise prices. Not saying prices will rise significantly in 2009, but I think we'll see the bottom of the market.

 

Interesting piece on Ch4 news last night about the foreclosure bus tours in Las Vegas. People were actually only looking at the moment whereas 6 months ago they were buying 'bargains'. Problem being the 'bargains' of 6 motnhs ago are now overpriced. Everyone is scared as what is the point in buying when it looks like they will go lower.

 

Houses they were looking at were large detached 4 bed villas. Down from $350k to $150k. Even at this price most were not interested.

 

Just shows how insane it is paying $200k for a one bed flat in Gorgie !! You can get a nice big house with a pool for that in many places in the states.

 

How is it in your neck of the woods ? Reckon there will be a wee uprising of exhuberance following Obamas victory* next week ? Few weeks of stock rises etc.. until people realise the same issues are still apparent ?

 

It's by no means a forgone conclusion, McCain has narrowed Obamas lead in some key states. I worry that McCain would continue the economic and foreign policies of the Bush Administation, but Obama does offer a glimmer of hope. The Democrats will control both the executive and legislative branches of government, and will at last have a chance to impose some discipline on the financial markets.

 

If I had a pension linked to the stock market I would be using the middle of November as a nice exit point to get into cash. But then again who ****ing knows these days !!

 

It's already been six months since I had a penny linked to the stock market! Last shares I had were Google, bought at 412 several years ago, reached 710 about a year ago, I got out at 570 in the spring.

 

They're now at 350

[Munch]

What economists are predicting price gains in 2009?

 

I Noted some guy from the ESPC Was saying this recently.

[grumpyjambo]

I was speaking to a house developer the other day and they reckon that things will pick up a bit in the spring and his big worry is that he will not have enough staff to cope.

[jambos are go!]

Had my weekly jambo chat with a pal today who works in a lawyers. Said sales are definetly picking up 'at last'. Next spring will be crucial in deciding who is right and wrong. I'd still jump at a bargain if you see one - anything about 15% below what you have expected a few months ago

[The Old Tolbooth]

Oh god, it's started again now that CC has got hold of this thread

 

I predict 9 pages

[coppercrutch]

I Noted some guy from the ESPC Was saying this recently.

 

Work it out.

 

I was speaking to a house developer the other day and they reckon that things will pick up a bit in the spring and his big worry is that he will not have enough staff to cope.

 

 

Work it out.

 

Had my weekly jambo chat with a pal today who works in a lawyers. Said sales are definetly picking up 'at last'. Next spring will be crucial in deciding who is right and wrong. I'd still jump at a bargain if you see one - anything about 15% below what you have expected a few months ago

 

Work it out.

 

Oh god, it's started again now that CC has got hold of this thread

 

I predict 9 pages

 

picking up 'at last'.

 

 

My only question is .................WHY.

[Boaby Ewing]

All the Economists are predicting a small price gain with Edinburgh House prices in 09, with a strong recovery going into 2010/2011.

 

These are the same guys who get paid fortunes for this work who predicted in July this year WAIT FOR IT (Drum Roll ) That oil would be 200 dollars a barrel by November

 

Do these guys actually ever get anything right ?

 

Well that's bollocks for one. arjun Murti at Goldman Sachs (equity, not commodities) predicted that oil would "schuper schpike" to between $150 and $200 sometime between Spring 2008 and the end of 2010.

 

Tbf, given oil got to $147 in July 2008, he wasn't far off... to a degree that's not even worth worrying about in a very short timespan.

 

He's since said oil could drop to $50 if the world heads into recession -- and that currently looks a real possibility.

[coppercrutch]

Had my weekly jambo chat with a pal today who works in a lawyers. Said sales are definetly picking up 'at last'. Next spring will be crucial in deciding who is right and wrong. I'd still jump at a bargain if you see one - anything about 15% below what you have expected a few months ago

 

There is no right or wrong. House prices in Edinburgh will simply sometime in the next 5 years revert to their long term average, or less, in real terms. Tis will require a fall of about 40% in real terms.

 

There is no 'argument' in this IMO. It is going to happen. Unless of course the long term average is broken forever. The chances of that are miniscule. A long term average gets that title for a very good reason.

 

As for sales picking up that will only help the falls. Sales levels cannot actually get much lower. They will have to pick up eventually !!

 

The only way sales will pick up is if people start to be sensible with their pricing.

 

'Jump at a bargain'

 

15% off peak of the biggest UK housing bubble in history is a bargain.

 

I do love thee thoughts that a 10 year boom will be followed by a 1 year bust.

 

Doesn't sound right to me. Can't quite put my finger on it...

[coppercrutch]

Link?

 

Just type it into google !! You can have your choice of articles.

 

 

 

The optimist in me says we'll see signs of the bottom being hit in early 2009. By then hopefully the governmental strategies will be paying off, banks will start lending again and people waiting for house prices to fall will be chomping at the bit to get a bargain.

 

 

 

Eventually, as I said above, the people who are holding off, waiting for a bargain, will take the plunge which will raise prices. Not saying prices will rise significantly in 2009, but I think we'll see the bottom of the market.

 

 

You talking about the US I take it ? When did the falls start happening over there ? 2006ish ?

 

So you reckon a 3 year bust if prices stop falling sometime next year ?

 

If the same happens here we will be talking about the start of 2011. That would fit pretty well.

[coppercrutch]

Just did a quick check. Good stats below:

 

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/2,3,4,0,0,0,0,0,0,0,0,0,0,0,0,0.html

 

Seems in the US the drops started in July 2006 for most areas.

So you could be looking at a 3 year bust if things stabilise next year.

 

Our drops started in Mar 2008 IIRC.

 

If we follow the same route we will be looking at early/mid 2011 for bottom out.

 

I will be watching the US with intersest. Will be a good barometer of what we can expect to see here.

 

IMO the 2010 recovery being banded about by most UK 'experts' is just wishful thinking. Most of their predictions have been pish so far. I don't expect that to change now !!

[Charlie-Brown]

Lack of credit is what created this recession and what might sustain it however generally it is confidence/lack of confidence ie what people 'believe' will happen in the future that helps to dictate their spending & investment decisions - if they believe things will improve then they will more likely spend & invest whilst the opposite is true if they believe things will get worse - and aggregated together this becomes something of a self fulfilling prophecy .... that is why people are trying to talk up future prospects to bost consumer & business confidence levels.

 

CC is correct about prices though and not just Edinburgh house prices .... there has been a long boom in house prices and also in the stock market which turned into a bubble - if you look at long term prices on a chart you see a gradual steady rise then followed a big jump so that prices were way above were the curve-line would be if they'd followed a more modest growth pattern ..... it is likely that is where house prices will fall back to ...... ultimately all prices of everything are related to peoples ability to buy .... in the case of edinburgh house prices it is related to their income and availability credit and if these are at a combined lower level then prices will be lower - high availability of credit and higher multiples of earnings is what fuelled the housing bubble.

[Charlie-Brown]

http://www.upmystreet.com/property-prices/trends/l/Edinburgh.html

[coppercrutch]

Lack of credit is what created this recession and what might sustain it however generally it is confidence/lack of confidence ie what people 'believe' will happen in the future that helps to dictate their spending & investment decisions - if they believe things will improve then they will more likely spend & invest whilst the opposite is true if they believe things will get worse - and aggregated together this becomes something of a self fulfilling prophecy .... that is why people are trying to talk up future prospects to bost consumer & business confidence levels.

 

CC is correct about prices though and not just Edinburgh house prices .... there has been a long boom in house prices and also in the stock market which turned into a bubble - if you look at long term prices on a chart you see a gradual steady rise then followed a big jump so that prices were way above were the curve-line would be if they'd followed a more modest growth pattern ..... it is likely that is where house prices will fall back to ...... ultimately all prices of everything are related to peoples ability to buy .... in the case of edinburgh house prices it is related to their income and availability credit and if these are at a combined lower level then prices will be lower - high availability of credit and higher multiples of earnings is what fuelled the housing bubble.

 

Indeed - and this has been forgotten for the last few years.

 

Long term average is 3-4 times average salary for the average price of a house. Last year in Edinburgh it was 8 times.

 

These are the most important figures when trying to predict what is likely to happen. I simply predict the average will be reached again. It is very unlikely I will be wrong. Very simple really.

[Munch]

Work it out.

 

 

 

 

Work it out.

 

 

 

Work it out.

 

 

 

picking up 'at last'.

 

 

My only question is .................WHY.

 

I'm like a roller coaster with this one Copper, some days i think they will drop another 20%, other days i think its almost at the bottom now and about to bounce again.

 

I'm going with the bounce theory at the moment this is why.

 

1. Interest rates will be down to around 2 % over the next year.

 

2. Prices are currently down aroud 15% on last year so bargains to be had.

 

3. Finance is coming back into the market, and with libor and BOE Int erst rates falling more 1st time buyers and investors will flood the market.

 

4. Rental market is still very good 800 per month for a 2 bed and 600 for one beds are very much the norm rentals.

 

5. Browns Bounce he will win in fife, and he will do whatever it takes to save his skin thus the UK Avoiding a deep recession, he will become a hero.

 

6. Stamp duty at 175:eek:K good new for ist time buyers.

 

7. My prediction is come next Spring things will move again in the property market.

 

8. Supply and demand issues, as there are no new houses being built the existing stock is gobbled up. leading to a shortage of property supply in a few years, thus promoting a house price bubble again.