Van

Probably not a bad time to do some short-term profit-taking if you have been long since Mid-Dec (like me). My trading account has just hit a new high

Looking good for PoG. We've definitely broken through the downward sloping resistance line running from the last two peaks in Sept & Oct, and confirmed by the big jump in silver price on Friday.

But the market always overshoots (that's how you end up with 'very cheap' in 1996).

I think we'll ultimately get a bottom when some exogenous Sterling crisis forces interest rates to rise, but it's anyone's guess when that might come about. It could easily be 5 years away. Until then we are in a mini-Japan and prices will just meander along.

Yes. 25%-30% would be pretty much all my savings in, hence why I'm hesitating.

Yeah, it's a tough one, but savings are depreciating at the moment, and I don't think there's much upside left in stocks. You could hold some gold, but that is not without short term risks as it's so volatile.

I think it's sensible to hold some gold as a hedge. I do expect the gold:house ratio to fall further, so I'm long (paper) gold by about 10% the value of my house. Neither the house nor the gold position are over-leveraged, so I sleep well at night. If gold goes to the sort of ratios that many here predict then this will go towards paying off a large chunk of the house.

You can get good 5yr fixed deals for around 4% if you can get the 25%-30% deposit together. That's cheaper than renting in most places. Make overpayments while on this cheap rate, and at the end of the fixed period, if prices have fallen (nominally) then trading up will be easier and cheaper, and if they have risen then you will have a big equity cushion and be able to remortgage for a good rate again.

Of course this requires that you can put down a large deposit in the first place...

IMO the best thing that house prices can do is to remain level in nominal terms; I don't want them falling much as this will just kill the economy (better to have expensive houses and jobs, rather than cheap houses and no jobs), and more expensive houses are not desirable either and put them further out of reach of everyone. At that rate houses should fall back to long term trend in 3-4 years.

I think Gold needs a small technical pullback around here, but longer term, we could see a rapid move back up to near the highs as the USD is at risk of reversing: http://www.thetechnicaltake.com/2012/01/13/dollar-bull-trend-likely-over/

Nov 2011 520.4 -1.5 160,801

Dec 2011 510.7 -2.3 157,803

-2.3% NSA.

That's quite a drop!

Nominal low was Mar-2009 @ 157,066

New lows likely? It will be interesting to see how it unfolds in the coming month. FWIW I do expect a stronger H1, but new lows seem inevitable, whether it is next month, or at some later date.

edit: sorry, the SA figure is -0.9%, not -0.6% as I previously said.

Anyway, that's Crash Cruise speed range

Maybe so, but the market is traditionally pretty weak over the last 3rd of the year anyway. Seasonality plays a big role - I expect that we'll run into the traditiona spring bounce sooner rather than later, especially as this winter has been remarkably mild so far.

Halifax Dec-11 was -0.6% @ £160,063.

The Halifax price-to-ASHE earnings is now lower than it has been since Dec-02.

Looking v good today considering the strength of the USD.

Bodes well for the short term.

gold leaf is so thin it can be transparent (gold is actually green when you look through it - interesting fact there).

covering a building in gold leaf requires very little. (just look at the number of books etc with gold leaf on them - it all adds up to only a small amount).

Howabout-

Only in a supernova is it possible to create atoms with 30 protons, 40 protons, 50 protons or even 60 protons. Nature prefers even numbers for stability, but every so often, the star will forge an odd-numbered atom, a real rarity: gold!

So you need your own personal Death Star to create gold? Maybe Darth Vader was just a misunderstood gold bug!

Time to back the truck up?

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June 2011 = 195.6

December 2011 = 183.7

Asking prices down -6.08% since June!

4 out of the last 6 months negative.

RM seems very seasonal to me. I expect the usual kite-flyers to emerge as we roll into 2012.

I just posted this...

 

Clearly, Mr Livingstone is trying to gain votes, using the popular anger against high rents, without any attempt to understand what has driven rents higher.

 

Truly, it is beyond ridiculous to think that rents should be set according to a tenants wage packet, rather than using a free market system to balance supply and demand, In Death-stone's vision, how would a scarce resource, like nice flats in Kensington, be balanced against the huge demand from people who would want to pay just 1/3 of their wages to live there?

 

I suppose he has in mind some Death-stone supporter sitting inside a Not-for-Profits Letting agency turning the keys over to a friend, who has bribed him by buying him a meal, or perhaps giving the agent a car. That's the sort of corruption that would become endemic in Red Ken's system.

 

If London voters elect this idiot, then will wind up living in a third world society, and that will be exactly what they deserve.

As Peter Schiff continually points out with college education fees, anything that receives a subsidy is going to be more expensive.

Remove housing benefit and all housing will be cheaper.

What, the price of bread goes up 5% and you think a house goes down 5% - in 'real terms'?

I guess things are only priced in gold around here.

I don't buy this end of the world stuff. Heard it all before, many times. If the SHTF big time, then there will be co-ordinated world action, printing or debt relief or something new, but life will go on.

Really?

All great civilisations destroy themselves in the end. The seeds of the own destruction are sown from within. Life will go on until it doesn't.

Spot gold just briefly dipped below the 200dma @ 1614. Went as low as 1605.

There should be a lot of technical support here; it it goes, it will head much lower.

Come on guys, you know it isn't that easy.

A 6% yield will probably be something more like 4 - 4.5% once service charges, repairs, voids, are taken in.

Add £4k in buying costs.

and don't kid yourself that yield doesn't matter whether you are buying with cash or not; would you still buy it if it was returning 1%? Of course not, you'd stick your money in a bank as the return on your investment would be lousy.

FreeTrader's HPC charts:

As calculated by me a few posts earlier, prices hit a new real low 30.4% below peak.

This time next year I reckon we'll be talking about another 5% off in real terms... and possibly more.

Halifax peak: Oct 2007, £199,770

Current price: £161,731

Nominal price fall = 19.4%

YoY CPI Inflation:

Oct 2008 = 4.5

Oct 2009 = 1.5

Oct 2010 = 3.2

Oct 2011 = 5.0

Oct - Dec 2011 = 0.8%

Inflation

1 / (1.045 x 1.015 x 1.032 x 1.032 x 1.008) = 0.863

Real CPI-adjusted house fall prices since Oct 2007 = 80.96 * 0.863 = 69.8%

Halifax index has fallen 30.2% in real terms since the Oct 2007 peak.

Clearly, the effects of inflation are having more of an effect with each passing year, but if prices stay flat then even if inflation runs at 4% in future, it will take another 4 or 5 years for us to return to the long term averages.

- 5.4% RPI

= -6.4% CRASH!!!

Yes, slow-mo crash in real terms, but no new nominal crash. Been saying it for a while now. If that's a crash then anything that didn't go up nominally is also crashing, which was quite a few things and not just houses the last time I checked.

Probably will a lurch down at some point in the future when rates are forced to rise substantially, but this is not on the 3 year horizon.

-0.9% from Halifax this month.

http://www.lloydsbankinggroup.com/media/pdfs/research/2011/HousePriceIndexNovember2011.pdf

YoY is -1.0%

These sort of flat figures will go on for a long time yet.

2012 should be worse for housing than 2011 in my opinion, as mortgage rates cannot really go any lower, while rising unemployment and falling real incomes continue to bite. No big lurch down, though, as long as ZIRP is maintained. Just a soft 3-4% fall overall at best for the housing bears.

It amazes me that rents have gone on rising while incomes have been rather stagnant.

 

Does anyone want to speculate on why that is happening?

I really do think that it is a demand/supply thing. Housing construction is not keeping up with population growth in the SE - we are getting migration from both Europe AND from other UK regions.

The hard time are falling disproportionately on the young stay-at-home English generation, whom don't have much housing demand anyway.

N2. £4k is very average for moderate houses round here.

Your definition of "moderate" is not the same as mine!

I'd rather spend substantially less and put the money I save into other things, but of course, each to their own.