House Price Slowdown Vs House Price Crash
22 May 2008It seems as though the nation has been bitten by the stupid bug. The symptom of the bug is complete inability to appreciate the difference between a “house price slowdown” and a “house price crash”. Have you been bitten?
In true scientific form; before diagnosing a problem, the source of the problem needs to be identified. I’m confident the confusion stems from two misinformed types of specie:
1) The hippy hopefuls
These are the people that pray for a crash every night, meaning they will take any small sign as victory. They’re on the same par as supernaturalists that claim any flashing light in the sky is a message from another life form. These people have been predicting property crashes for 5 years, and now that the market has been hit with the King of all gentle strokes, the kind that mothers’ apply to their newly born, they’re claiming victory. Come on now, we all know it doesn’t work like that…
2) The sheep
These are the people that don’t really have a clue what the fuck is going on, but they saw a headline in the paper, “PROPERTY, CRASH, NOW”, and ran with it. These people also believe that you can contract H.I.V from swimming in the same pool as a carrier. These people are a major problem, because they’re the head cheerleaders of self-fulfilling prophecy.
Ultimately, it seems as though any dip in the market is attached with a “crash” alert, which is absurd, because that’s like calling a semi-erection a full-on erection. If you ask a heterosexual female to choose between the two before intercourse- do you think she’ll label it a close call? FUCK NO. And that’s exactly what she’ll say to the semi- “FUCK? NO!“. Of course, the semi-erection could develop into a full-on raging triumph, but during the early phases it could go either way. But alas, for now the semi is still a semi, as the dip in the market is still only a dip (for now).
What the UK is going through currently is a much needed correction/slowdown; it’s a dip in the market which is bringing house prices in line with inflation. Over the recent years house prices rocketed way beyond the rate of salary increases, but people were still happy to spend their hard earned cash on bricks and mortar, and that had a direct impact on increasing interest rates, consequently the average person is now struggling to a) get onto the property ladder and b) remain on the property ladder.
It’s the first time property prices have dropped since the boom began about 8 years ago; now the herds of irrationals are flapping their arms like the world is coming to an end because they’re not used to change. It seems as though the slightest of change is the common enemy of the common fool. Did people honestly expect prices to keep shooting up at the pace it was? It wasn’t ever going to happen. The market was always going to slowdown and take a knock- but that’s not to say that the market is taking a beating.
I’m under no illusion, there’s plenty of scope for this dip to manifest into a full out crash. But right now, it’s not a crash. I’ll be the first person screaming “IT’S A FUKING DUCK” when it looks like a duck, walks like a duck, swims like a duck and quacks like a duck.
Is there anyone else on the same groovy train as me, wondering why the hell people are crying, “CRASH, CRASH” when there is no crash as of yet?
Attention! If you're new here, you may want to subscribe to my RSS feed so you're notified of all new blog entries.
Talk / 3 Comments left so far
I keep reading in bbc about house prices falling and my first thought as a first time buyer was thank god! HOWEVER! Some more digging into the stats and what did I find out? Scotland's house prices are still rising and here is a quote:
"The Scottish House Price Monitor showed that quarterly figures to the end of April rose by 2.3%, giving an average house price of £163,639.
Despite a fall in the previous quarter, Scottish house prices have risen by 11.6% in a year."
So all I can say is bummer, I guess it won't matter too much when I buy.
2
EAF: House prices are falling nationally, however, that's just a "national trend". In certain parts of the country, house prices are both increasing and remaining stable :)
3
Please leave a comment
I initially started this website because I wanted to document my every step from property idiot to property landlord,
in hope that people would find my site and help me along the way. I literally didn't have a clue about being a landlord
when I started this website.
And, what exactly, is 2.5 per cent monthly drop as per Halifax's latest figures, annualised? Is it:
a) An increase of 5 per cent?
b) No change?
or c) A drop of over 20 per cent?
1