It’s one of the most successful local blogs I have seen, in that it attracts lots of comment and readers, and almost all of it is constructive and interesting.
There is, however, one part of the conversation that I find rather alienating – the parts about house prices. This is not the blog’s fault – Nick, who runs the site, barely talks about house prices – but that of the people on the site, who use Nick’s articles as a launch point to discuss what they wish.
And a number of them wish to discuss the price of houses. This is – as the cliché goes – a favourite middle-class pastime, and for Brockley Central, with its substantial middle-class readership, it is almost inevitable that such discussions will be commonplace.
But not only does such talk remind me of my biggest personal investment mistake – thinking that house price peaks of early 2004 were as high as prices would go – these conversations are full of basic (and soon to be painful) errors.
I won’t go into detail on all of these, but I will mention one: things can change. Just because house prices have been at a level does not mean they always will. As I found out in 2004, prices can rise when they ‘shouldn’t’; they can also fall further than they ‘should’. This is because the intellectual structures backing pricing decisions can change very suddenly.
House prices rose beyond their 2004 peaks mainly because of easier credit conditions – housing finance was offered in huge quantities. That easier credit is no longer available, and so is likely to mean we will see a fairly large drop in house prices.
However, unlike market professionals, normal people take a long time to change their minds, and adjust to new market realities. This means that house prices may not recover for some years to come.
I won’t go into detail on all of these, but I will mention one: things can change. Just because house prices have been at a level does not mean they always will. As I found out in 2004, prices can rise when they ‘shouldn’t’; they can also fall further than they ‘should’. This is because the intellectual structures backing pricing decisions can change very suddenly.
House prices rose beyond their 2004 peaks mainly because of easier credit conditions – housing finance was offered in huge quantities. That easier credit is no longer available, and so is likely to mean we will see a fairly large drop in house prices.
However, unlike market professionals, normal people take a long time to change their minds, and adjust to new market realities. This means that house prices may not recover for some years to come.
Corbusier wanted to build homes that were machines for living. The home owners of this country wanted homes that were machines for profit. It would be nice, though naive, if homes could simply be places to live.
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