2006-11-12 05:34:56 · 20 answers · asked by Naz 1 in Business & Finance ➔ Renting & Real Estate
No. Interest rates may have gone up but so has the amount that lenders are willing to give out. They may level out but I doubt they will crash.
2006-11-12 05:38:20 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Yes.
Heres my theory.
We know that people in the Uk are in a lot of debt from credit cards, loans etc (it amounts to billions) most of these people will probably own their own homes, and most would be struggling if they had to take a month off work due to the massive repayments they will be making on their cards,mortgage etc.
The interest rates are going up all the time at the moment.
Now just suppose, in 5 years time the "normal" people (ie; not the super rich) living in huge houses cant make the repayments on their credit because the interest rates have gone so high, they will be left with few choices.
Their house may be repossessed. They may have to sell their house at a fraction of what they paid for it in order to meet their payments. This could result in massive sales of "cut price" houses which, in turn, would force the prices down on the whole housing market.
Then the whole thing would start again.
2006-11-12 23:11:14 · answer #2 · answered by Catwhiskers 5 · 0⤊ 0⤋
The only thing that would crash the housing market would be a steep rise in interest rates. Otherwise, the housing market will probably increase at a slower rate and may level out or drop slightly to take into account the fact that it will soon be physically impossible for a lender to lend a mortgage that people can afford. At this moment in time, lenders and buyers are being innovative i.e. lenders lending high income multiples, buyers grouping together, parents helping children get on the property ladder etc.
2006-11-12 06:30:36 · answer #3 · answered by nemesis 5 · 0⤊ 0⤋
I think that this is a local issue. Overall, I don't believe that there will be any significant change in the near future. Most people cannot afford to lose equity, and this will stave off any major decline in prices.
The TV media is bombarding the public with the issue, often saying that the "bottom is falling out" in house prices. Is this some type of "sel-fullfilling" prophecy?" From what I've read,there is no general trend in prices falling.
2006-11-12 05:56:45 · answer #4 · answered by ursaitaliano70 7 · 0⤊ 0⤋
No way, I think we will see a settling period after the interest rate rises predicted in the new year, but overall they will contiue to rise with or above inflation.
Since I started working the price of a house has risen far far more than the average working wage. That is why you can now get a mortgage for 5 times your salary. This wasn't needed before..
2006-11-12 05:48:53 · answer #5 · answered by Very Dangerous 2 · 0⤊ 0⤋
I'm no financial wizard, my bank balance is proof of that!
But it doesn't take a genius to wok out that house prices will never 'crash' in the long term, they never have yet, and I could never visualise them ever dropping in the long term.
Let us assume that overnight millions and millions of new built houses suddenly 'popped up', all for sale , the price of all houses would certainly drop, (supply and demand) but only in the short term never in the long term.
And millions of new built houses are not about to pop up anywhere are they?
Think about any scenario, look back in history, houses have never dropped in price over the long term.
Now the short term is a different matter, we will of course have the usual rise in interest rates people wont be able to afford to buy, prices will drop, (not crash) Interest rates will eventually drop again, same old story over and over again.
2006-11-12 06:04:38 · answer #6 · answered by budding author 7 · 0⤊ 0⤋
I live in California and the market went way to high for people to afford. So it is starting to come down a little. But CRASH I doubt it. With minimum wage going up I think everything else will follow right along.
2006-11-12 05:53:38 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Inflation is already creeping up. Council taxes are rising out of scale with middle incomes. Council tax is going to be based on the value of your home so increases of 50% are very likely next year. First time buyers are being offered 6* their salary which is going to lead to huge numbers going bankrupt. And Renting property has now overtaken buying. All this will lead to a property crash like in the early 70's. Spending, like a Labours scale hastens this collapse.
2006-11-12 05:43:09 · answer #8 · answered by Old Man of Coniston!. 5 · 1⤊ 1⤋
yes ....they cant keep going up when salaries are not keeping up and the young can no longer get on the property ladder have been there when interest rates kept rising think it went to 17% really struggled it was a nightmare starved but got there in the end lots of my friends didn't know the interest rate is minor to that era but every % is an issue just be aware and be careful its no longer boom and bust its just bust
2006-11-12 05:54:06 · answer #9 · answered by bobonumpty 6 · 0⤊ 0⤋
Nope, here are the reasons why:
Statistics on real estate from the Feds: http://www.fedstats.gov/
Historical statistics on Mortgage rates: http://www.bestrates.com/mtghst.html
Retail and Wholesale Trade gives the data seasonably adjusted by sectors: http://www.census.gov/econ/www/retmenu.html
And besides if they did sellers can always go and do this:
Burying old St Joseph to sell your home: http://www.snopes.com/luck/stjoseph.asp
Buena Suerte
2006-11-12 05:41:51 · answer #10 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋