House prices going down fast in the US how long before it happens here in the UK?

Answer 1

It will happen very soon.

Property prices do go up and they do go down. You need to distinguish between money prices and real prices (real prices are net of the general level of inflation)

Every ten years of so the market corrects by 30% less inflation. In the 1970s and early eighties the general level of inflation being 20-30% masked the house price correction. However in the correction of the early 1990s inflation was at 8% hence a reduction in price of 30-8 approx 22%

This time the general inflation is at 2% so expect 30-2 a 28% correction to the market. Also the time the recovery takes is also determined by the inflation rate. The 1990 recovery took 22/8 about 3 years expect the next correction to take 28/2 about 14 years.

Historically houses rally in price at about 2.5 times average earnings and the rally ends at 5 times average earning currently we are at 7 to 8 times average earnings, as the market has been distorted by buy to let buyers.

The problems with buy to let is that investor never make money on rental. Some may cover mortgage payments but once viods, maintenance, management, and major refurbishments every 7 years are taken into account all rentals lose money in cash terms.

The only money made on buy to let is on the capital appreciation of the property. Hence when crash starts happening expect a lot of people losing a lot of money on buy to let and getting out of the market further depressing property prices

In addition we have a major liquidity issue with the stock market. The charts now resemble 1972 (This was a 40% downturn 1966-69 followed by a 40% recovery 1969-72 followed by a major sell off of up to 90% of the market).

ie Bull markets are generally followed by bear markets of the same length. The last bull market 1974-2000 lasted 26 years. We have now been in a bear market of 6 years ie if you had put 1,000 in the FTSE 100 in 2000 it would be worth 900 now. Expect a major correction soon.

All togther we are facing a perfect storm protect your money and buy gold

Answer 2

House are only going down in a few areas because people are in a panic and don't know any better. If there really was a housing slow down then why are builders still building? there are only three places to live, in a home, rent an apartment or live in the streets. everyone who ever wanted to buy a house, now is still the time!!! 6,7,8,9% interest rates are all great rates. KEEP BUYING.

Answer 3

there isn't any answer on your question. marketplace expenses won't be able to reliably be predicted. Incoming migrants are no longer pushing expenses up and that i've got lived by 2 assets booms as great because of the fact the present one, purely one among which grow to be observed by utilising a marketplace decline. increasing expenses of interest might reason expenses to fall however the economic device is controlled lots greater useful now in view that Brown surpassed over administration to the economic employer of britain.

Answer 4

Their economy hasn't been too good for a while so it's no great surprise.
However, people have made a killing over there buying property when the prices fall and selling when they rise again.

Answer 5

Its not sure they will. Other countries like New Zealand, Denmark and France are more likely to drop in price. Read this report from the OECD

Answer 6

It won't the US and the UK may be linked in many trends but fortunately not where property is concerned.

Answer 7

i hope not, i bought my house for £35 500 7 years ago and i just had it valued at £90 000, so i really ope they don,t come down

Answer 8

It's bound to happen at some point but who knows when? That's the trillion dollar question!!

Answer 9

2009 will start.

Answer 10

they never go down in uk they rise