UK Housing 'could' end the year with gain

Probably the greatest deflationary collapse of our time and UK housing prices are going to finish up? Confused???

It's called media-induced financial depression panic that never was.....

> It's called media-induced financial depression panic that never was.....

Nah, I think its called "are you really this stupid?"

Its now officially the deepest and longest recession since the great depression.

You think it was all just media talking?

Oh my lord, the stupidity never ceases to amaze me.

nyc10022, not making a comment on the UK housing market (don't really know it) but I am surprised that you don't notice the shift of perception in NY. People are feeling a lot better than at their worst moments between Nov-April but you still repeat the same facts over and over again. RE purchases are often emotional so you ought to take this into consideration.

UK RE investment folks have their check books out these days. There is a general feeling in London that the dip we are in is the absolute bottom. The word is now is the time to buy in London. Every town is different.

It's possible that the immediate financial relief is smoke, mirrors and, aprinting press.

"nyc10022, not making a comment on the UK housing market (don't really know it) but I am surprised that you don't notice the shift of perception in NY."

I do notice a shift in NYC, and its the opposite of what you're saying.
This has been discussed here several times already.

You're assuming that people knew we were in a RE decline... they didn't. Tons of folks had no idea there was any decline at all until recently.... and some folks haven't even learned how bad it is yet.

We're on a board, and everything gets discussed quickly. There ar emasses of folks who thought were were still going up just a few months ago!

So, yes, there might be some people on the cusp who have shifted upward... but, in terms of overall manhattan market perception now, I still say its shifting downward.

Some folks only got the news after the Q1 reports came out! That was just months ago. And, guess what, Q3 reports so far look like they'll be down again.

Most folks are months (if not years) behind the market.

Its a painful lesson that folks like SteveF seem to miss... and why it took FOUR YEARS for re to recover after the stock market recovery in 87.

The same intertia that created the bubble, is what streteches out bottoms...

"UK RE investment folks have their check books out these days. There is a general feeling in London that the dip we are in is the absolute bottom."

Sounds like the US in August 2008, no? ha ha.

"It's possible that the immediate financial relief is smoke, mirrors and, aprinting press."

My favorite hypocrisy is that if the media gives bad news - even though it was accurate, as we now officially have the worst recession since the depression - its "media hype" and "doom and gloom" to SteveF and his bulls.

But if its positive hype - even unsupported - he suddenly loves the media.

That is not the shift I am talking about. It's the shift in outlook. People in NYC feel better about their future again, about their earnings potential.

"Tons of folks had no idea there was any decline at all until recently.... and some folks haven't even learned how bad it is yet.
We're on a board, and everything gets discussed quickly. There ar emasses of folks who thought were were still going up just a few months ago!"

Where's the evidence for this? And who are you talking about really? People with no interest in real estate, yeah, you're probably right, but in my conversations with most people with even a fledgling interest in buying or in real estate in general had a pretty good idea what was happening. Those are the people that move the market anyway, so it's a bit silly to focus on the rest. Besides, I think carnegie was speaking more about the general economy. Outlook there is different, though somewhat related.

carnegie,
dom't even bother with this blockhead nyc10022 just put her on ignore....

There's a few people on these boards that if they see a Benjamin on the streets, they would ignore it because they think it's simply too good to be true.
Why not have an open mind, and bent over to take a closer look? Trust me, not everyone out there is looking to fuck you up the ass.

I was in London and a local (in commercial RE) told me that London residential RE was reinflated by foreigners (mostly Russians) who were bargain-hunting. Not very comforting vis a vis the longer trend.

This was about a month ago.

Does it matter who is buying?
Isn't price absolute?

Yes, it matters. Carpetbaggers who just want to flip will all dump their property at the first medium-size uptick.

Really, can you give me an example of this? Did it happen in any of the major cities around the world? What about NYC?

carnegie: i agree that NYers generally feel better about the economy -- of course that is because their feelings roughly correlate with the stock market. But I also think bottoms are slow to catch on. If you look at the price chop thread, you will see many brokers had insane asking prices-- these are professionals who are not accepting the realities of the market. So there are certainly laymen who are not aware of the declines. And it is still going on among brokers and their clients.

To me it is like someone offering to sell you their Google stock at $720 because that is the price they paid for it. Google is a great company and their stock might trade at that price again but I am not willing to buy someone else's loss. If an apartment is priced at 2007/2008 comps, I won't even consider it. There were a million media reports in those years that real estate was in a bubble, yet many bought anyway. They will only come to face the reality of their losses when they need to sell and letting the air out of that bubble is going to take awhile.

Even as salaries go up and bonus pools grow, I think the NY RE market will be slow to recover because so many were burned so badly. You can't buy a put on an apartment and I think wise buyers will buy protection by being conservative in their offers.

ericho:Really, can you give me an example of this? Did it happen in any of the major cities around the world? What about NYC?

Yes. Hong Kong downturn was so severe because foreign speculators in their RE bubble pulled out in a flash in '98. Same thing recently in Dubai. It would be interesting to know how much of NYC's decline is due to europeans -- who propped up the NY market for so long--turning tail when their own economies tanked.

"That is not the shift I am talking about. It's the shift in outlook. People in NYC feel better about their future again, about their earnings potential."

In terms of their earnings, sure, in terms of RE, nope.

"carnegie,
dom't even bother with this blockhead nyc10022 just put her on ignore...."

Yes, if you don't like to bother with facts and logic and things, please ignore me. Jump on SteveF's blog instead, where there is no real estate decline or recession, and people were "stampeding" to buy Manhattan RE in late 2008.

"To me it is like someone offering to sell you their Google stock at $720 because that is the price they paid for it. Google is a great company and their stock might trade at that price again but I am not willing to buy someone else's loss. If an apartment is priced at 2007/2008 comps, I won't even consider it. There were a million media reports in those years that real estate was in a bubble, yet many bought anyway. They will only come to face the reality of their losses when they need to sell and letting the air out of that bubble is going to take awhile. "

Good analogy.

Yes, people feel better for sure, but better than what? Better than fear of the end of the world, sure. But even SteveF's favorite indicator, the dow, is off THIRTY SEVEN PERCENT still.

Yes, better than 45%, for sure. But "better" doesn't mean a whole lot of its anticipation of a further 20% decline turning into anticipation of a 10% decline.

"Really, can you give me an example of this? Did it happen in any of the major cities around the world? "

Alan is right. And its not just the carpetbaggers.

Zillow survey a couple months back said 2/3 of homeowners would sell their houses if prices rose. Its not just the flippers... you want to talk about pent up demand... there is a ton of that on the seller side.

nyc10022, how do you know with certainty that it will be another 10% decline? Plus, if you are within 10% of the bottom, not too many will try to time this perfectly. An apt purchase is not instant. Not every apt fits the bill for you. So once you see something you love, you are not going to wait for the next apt you love just to get a potential discount of 10%. A daytrader mentality doesn't work for apt purchases imo.

> nyc10022, how do you know with certainty that it will be another 10% decline? Plus

I don't... never said it was certain. I was just giving an example to explore the idea of "better".

I've said many times that nothing is guaranteed, but I think renters are being well paid to wait to see if there is further decline, with little risk on upside (given slow movement of RE markets if they turn up).

> Plus, if you are within 10% of the bottom, not too many will try to time this perfectly.

This isn't an issue of trying to time in perfectly, this is an issue of the fundamentals are still bad.

" Not every apt fits the bill for you. So once you see something you love, you are not going to wait for the next apt you love just to get a potential discount of 10%."

True, if there was something I fell in love with, sure, I'd be willing to consider overpaying. But I'd certainly rather fall in love at 10% off, wouldn't you?

Plus, you talk about 10% like its small potatoes. On a leverages investment, it simply is not.

nyc10022, I think you are pretty naive if you really believe you can time your purchase w/i a 10% decline. Have you ever bought an apt? Most people see countless apts before they find one they love. And not every type of apt will be at the same bottom. You truly talk like a daytrader.

Carnegie, I was pretty clear in my post... I said the opposite of what you are inferring.

"This isn't an issue of trying to time i[t] perfectly, this is an issue of the fundamentals are still bad."

I'm not sitting here waiting for x% to pull the trigger - in fact, I've said several times that I'm not even sure its going to happen.

I'm just saying the fundamentals are still lousy, and renters are essentially being subsidized to wait it out.

I quote you: "True, if there was something I fell in love with, sure, I'd be willing to consider overpaying. But I'd certainly rather fall in love at 10% off, wouldn't you?" That is what I am referring to.

Yes, and I didn't say it there either. so...

1) I didn't say it

and

2) I said the opposite in the same post

Seems pretty clear to me that you were mistaken in what you attributed to me.

> And not every type of apt will be at the same bottom.

Of course, but if the stuff I like is still declining... (which it is)

You didn't say it? I took it straight from your post!

Carnegie: Aside from your riff with nyc10022, I think the OP was wondering how the London re market could be going up. And I think we have to ask the same question here in NYC. I don't know and I don't think anyone knows if it goes down from here. That said, as a follower of the miami market over the past couple of years, I don't think anyone should say it couldn't.

But to me the point is that the NYC re market has arguably gone down here 20 - 25% and I don't think that is reflected yet in the mentality of the professionals or the sellers ( or at least the majority of them). Though nyc10022's point of view is none too subtle, I don't think anyone should be shutting out that pov. Just as I think your more benign view that' the mood is lifting' is accurate and should be accommodated.

My point is that I don't think the uplift in psychology will translate to higher re prices any time soon. I believe the economy will be in relatively good shape within two years and we will all be chugging along. But I don't believe we have popped the re bubble quite yet. Prices are not reflecting the actual downturn. True, you can't time the bottom, but you can conclude if the current market conditions are priced in. And in NYC, I do not believe they are.

"Yes. Hong Kong downturn was so severe because foreign speculators in their RE bubble pulled out in a flash in '98. Same thing recently in Dubai. It would be interesting to know how much of NYC's decline is due to europeans -- who propped up the NY market for so long--turning tail when their own economies tanked."

But at the same time, Hong Kong went through a bad stretch in the economic front during that period of time. How quickly did Hong Kong's property prices turned around?

A friend of mine who is a professional real estate financier (commercial) has just sold his place in central London to rent for a bit. I'm not sure he's seeing a sustained uptick in London.
Also, the building societies are notorious for their upbeat forecasts

Looks like it took 5 yrs to reach a bottom after the Hong Kong bubble.

In "The Anatomy of a Housing Bubble" Grace Wong, a professor of real estate at Wharton, offers ways to spot future real estate bubbles in time to introduce corrective measures before the damage takes its toll. Wong's research explores the Hong Kong housing market, which saw a "real increase" in prices of 50% from 1995 to 1997, followed by a "real decrease" of 57% from 1997 to 2002. (Real increases and decreases refer to changes adjusted for inflation.) Transaction volumes, too, rose dramatically from 68,000 in 1995 to more than 172,000 in 1997, but fell to 85,000 the following year.

And the correlation to the stock market not directly attributable. http://knowledge.wharton.upenn.edu/article.cfm?articleid=1194