Jump to content
Sign in to follow this  
drbubb

The politics of falling UK home prices

Recommended Posts

http://www.home.co.uk/asking_price_index/HAPIndex_DEC10.pdf

 

Prices down 0.5% mom

Time on Market soaring

The first line of their report is a quotation from Frank Shostak! (VMI)

 

“Contrary to popular thinking, it is not a fall in prices as such that weakens real economic growth but the declining pool of

real savings."

 

I knew I like these guys :D

Share this post


Link to post
Share on other sites
http://www.home.co.uk/asking_price_index/HAPIndex_DEC10.pdf

 

Prices down 0.5% mom

Time on Market soaring

The first line of their report is a quotation from Frank Shostak! (VMI)

 

“Contrary to popular thinking, it is not a fall in prices as such that weakens real economic growth but the declining pool of

real savings."

 

I knew I like these guys :D

Share this post


Link to post
Share on other sites
FOGGY THINKING on House prices, is becoming a speciality over at HPC

 

/see: http://www.housepricecrash.co.uk/forum/ind...howtopic=156067

 

First RB "goes Bullish" just after the market crosses over into the Crash Cruise Speed phase.

 

Then ngn comes up with a title worthy of the best bullish-spinning headline writer at the BBC:

"House Prices drop less than last month" (on Rightmove's 3.04% drop)

 

The Crash is underway, as predicted at the beginning of the Dead Cat bounce.

Everything is on schedule, and working "as it says on the can."

 

Why do they HPC-ers keep going "wobbly" on this predicted and predictable process?

 

I reckong, they are just too impatient to let it play out in the customary way, and so don't

want to take onboard how the cycle really works.

 

The thing is people have been waiting a long time for the crash to come and play out. The dead cat bounce has also shown rabbits can be pulled out of hats.

Share this post


Link to post
Share on other sites

I’ve been busy working away on a new charts section for my website.

 

I’ve got a load of Nationwide charts up already and I plan to upload some Halifax charts later this week.

 

Some of the charts update automatically so they will always contain the most recent data. The longer term plan is to have a fully automated chart library including Home, LR, Rightmove etc.

 

I’ve put a couple of examples below as I think they are relevant to this thread. I hope people find the charts useful. Any comments gratefully received by PM or on my own website. I am also happy to produce any variations of these charts (containing more or less data series, combining charts, fixed dates, log axis, etc) as I can produce them in a few seconds with the templates I have created.

 

Unfortunately, the links are not very easy to remember as I couldn’t choose the PNG file names myself. However, they are really really easy to find off my pathetic attempt at a home page. http://www.bustbubbles.com/

 

 

Houses_15592_image001.png

 

sorry, I can't directly post this chart, I will have to fix it http://www.bustbubbles.com/charts/Mortgage...chases_(SA).htm

 

I am particularly enjoying JD’s input on this thread btw.

 

Share this post


Link to post
Share on other sites

Thnx, Z.

 

There are some good charts there.

Well worth a look.

Share this post


Link to post
Share on other sites

Thanks Ziknic,

 

Scary charts!

 

It's interesting that the "nominal" rise for the 80's decade appears the same as for the 1996-2006 decade.

If that's a model, we are nearly at the "nominal" low (about -20%).

 

A couple of other posters have pointed out the inflation effect, 5 years at 3% CPI = ~15% (bit more compounded) in falls.

 

 

Share this post


Link to post
Share on other sites

the thing that got me is how they didnt fall more before. although i did get an insight when my part time public employee landlord informed me that he had purchased a second property right at the bottom in april 2009. i had to concentrate to not laugh out loud when i heard that from him. i have since moved. cant wait to see whan happens when they hike rates to defend the FX but we are way away from that

Share this post


Link to post
Share on other sites
the thing that got me is how they didnt fall more before.

 

It seems that without the massive number of repossessions that would normally arise from people unable to meet their mortgage payments in recessions (due directly to the low IR's and the banks inability to move to foreclose due to their public bailouts), most people, who don't have to sell, simply withdraw from the market when prices fall, thereby restricting supply and putting temporary floors on prices.

Share this post


Link to post
Share on other sites
Thnx, Z.

 

There are some good charts there.

Well worth a look.

some?

 

They're all good charts DrBubb ;):P

 

I've fixed the dodgy one from earlier

 

Houses_14410_image001.png

Share this post


Link to post
Share on other sites

I've got all my Halifax Charts up now

 

some examples

 

Houses_15479_image001.png

 

Houses_26864_image001.png

 

Houses_29836_image001.png

 

I'm going to be producing a few gold trading charts, I might post them here in the next few days ot on 24k. And I will also be checking the charts update automatically. The Home, LR, RightMove etc charts are some time away yet... depends on how much I want to get away from my family at Christmas.

Share this post


Link to post
Share on other sites

I like that Halifax/Nationwide YOY chart.

 

Stick some lines on that chart and from 1992 you have higher highs untill 2002, then lower lows untill the present. With about a 10 year cycle, so making 2 more years and maybe one final lower low left to run and if it takes out the previous low...well :o

Share this post


Link to post
Share on other sites

Went around my sister's tonight, she works in HR and is a member of CIPD so get's their monthly magazine. There was an article saying the public sector job loses could be as high as 1 million and is the private sector able to take up the slack. don't here them figure being banded about in the press do you.

Share this post


Link to post
Share on other sites
some?

They're all good charts DrBubb ;):P

I've fixed the dodgy one from earlier

Even better. That looks much better now

 

I have given you a link on my GPC - DATA Bank thread:

 

CHART SOURCES:

============

Spline's website :: http://www.houseprices.uk.net/

Ziknik's charts - :: http://BurstBubbles.com

 

If you want to "return the favor", the link is: http://tinyurl.com/GPC-Data

Share this post


Link to post
Share on other sites
I've got all my Halifax Charts up now

some examples

Houses_15479_image001.png

Nationwide is the clear leader.

When it turns, Halifax usually follows

 

You might try a "6 month's Early Warning chart".

Take 6 months change in Nationwide, and double it, and compare it with Nationwide & Halifax yoy.

It would give clear early warnings, for some HPC potential backsliders - like RB (haha)

Share this post


Link to post
Share on other sites

RICS survery is still very bearish: -44

 

http://www.bloomberg.com/news/2010-12-14/u...n-november.html

 

(raw data was actually -49, the same as last month, but they have seasonally adjusted it to a slightly less bad figure). That should ensure the NF/NW indices continue to weaken in the next 3 months, giving us some very handsomely -ve YoY figures by spring.

 

New buyers are extinct:

"A gauge of new buyer enquiries dropped to minus 18 in November from minus 12, RICS said. A measure showing the number of new property listings was unchanged at minus 4."

Share this post


Link to post
Share on other sites
New buyers are extinct:

"A gauge of new buyer enquiries dropped to minus 18 in November from minus 12, RICS said. A measure showing the number of new property listings was unchanged at minus 4."

Perhaps their nostrils are sensitive enough "to smell the aroma of morning coffee"

Share this post


Link to post
Share on other sites
New buyers are extinct:

"A gauge of new buyer enquiries dropped to minus 18 in November from minus 12, RICS said. A measure showing the number of new property listings was unchanged at minus 4."

Perhaps their nostrils are sensitive enough "to smell the aroma of morning coffee"

Share this post


Link to post
Share on other sites
Even better. That looks much better now

 

I have given you a link on my GPC - DATA Bank thread:

 

CHART SOURCES:

============

Spline's website :: http://www.houseprices.uk.net/

Ziknik's charts - :: http://BurstBubbles.com

 

If you want to "return the favor", the link is: http://tinyurl.com/GPC-Data

 

:lol: You’ve spelt* my website incorrectly. I chose the name ‘BustBubbles’ (not burst’) because it was easy to get it on the first page of a google search… I’m not sure it makes sense though.

 

You can post you links all over my forum if you want. Did you sign up btw? I hope it is you who has bagged the DrBubb username.

 

I will pop your link in my charts thread on the forum for you.

 

It’s a little more difficult for me to return the favour on my charts page as the index is auto generated by the folder structure and the contents of the folder. Example: I’ve got a folder called ‘Housing Charts’ a sub folder called ‘United Kingdom’ where all my UK house price charts are stored. The Index page auto updates itself every hour with any new/replacement charts.

 

I’m not very clever with computers so this auto update stuff has been a real pain. That’s why my web site looks like a bag of xxxx. I haven’t worked out how to ‘decorate’ my auto updating webpages yet. Every time I decorate, they revert back to default settings after an hour :angry:

 

I wonder if I could create a folder called ‘External Links’ and store a redirection page in the folder. That should provide a link to your data bank…. Actually, that should definitely work. Do you want to provide me with a synopsis to go with your link page? Html preferred so I can upload it and wait for the auto update to pick it up.

 

You’ve given me an idea. I would quite like a link on Approximity.

 

 

*spelled?

 

Share this post


Link to post
Share on other sites
Nationwide is the clear leader.

When it turns, Halifax usually follows

 

You might try a "6 month's Early Warning chart".

Take 6 months change in Nationwide, and double it, and compare it with Nationwide & Halifax yoy.

It would give clear early warnings, for some HPC potential backsliders - like RB (haha)

I think that would exaggerate the previous 6 months and miss any turns in the market.

 

When the data is going UP the early warning will show it going UP for the next 6 months regardless.

 

Share this post


Link to post
Share on other sites
I think that would exaggerate the previous 6 months and miss any turns in the market.

When the data is going UP the early warning will show it going UP for the next 6 months regardless.

Have a look at the chart, and I think you will see some value in it.

 

Here's my roughly-drawn version of it

ukhpi.gif

 

Look how 6mos SPED thru zero. Can there be any doubt that a big yoy drop lies ahead ?

 

And "BurstBubbles" has just gone BUST, and become: http://BustBubbles.com

Share this post


Link to post
Share on other sites
Have a look at the chart, and I think you will see some value in it.

 

Here's my roughly-drawn version of it

ukhpi.gif

 

Look how 6mos SPED thru zero. Can there be any doubt that a big yoy drop lies ahead ?

 

And "BurstBubbles" has just gone BUST, and become: http://BustBubbles.com

Oh, I understand - The annualised and YoY is on the same x-axis. Yes, I can knock that up in a couple of minutes (when I get home from work)

 

BTW, ‘Annualising 6 month on 6 months’ is not the same as ‘doubling 6 months on 6 months’. My chart will look a little different to yours. See link for explanation http://www.dallasfed.org/data/basics/annualizing.html

 

 

Share this post


Link to post
Share on other sites
Went around my sister's tonight, she works in HR and is a member of CIPD so get's their monthly magazine. There was an article saying the public sector job loses could be as high as 1 million and is the private sector able to take up the slack. don't here them figure being banded about in the press do you.

 

No, recently there has been bullish spin on the number of job losses. IMO we have yet to learn exactly how many will be effected. There may have been some propaganda effect made when the coalition came to power exaggerating how many would have to loose their jobs only to ratchet back the number and claim to have been merciful etc. However, the opposite may also be true: that it has been seen that 1 million job losses are bad publicity and they now want to downplay this.

 

Anyway we are seeing stories like this in the Telegraph.

 

 

 

Almost a million households are in arrears with their rent or mortgage, twice as many as a year ago, according to homeless charity Shelter.

Charities warned numbers would rise in the New Year

 

...

 

Shelter’s survey of 2,000 Britons found 3 per cent of households admit to being in arrears with their rent or mortgage, the equivalent of 835,000 – up from 405,000 a year ago.

 

A third of these turn into repossession cases at court, according to Shelter. It equates to every two minutes someone facing the real threat of being evicted from their home.

 

Home owners are struggling to escape their misery by selling up as estate agents warn they are doing just one transaction a week amid a drop in demand from buyers who are unable to obtain affordable mortgages.

 

...

 

Andrew Grant, a RICS member from Worcester, said: “We are seeing surprisingly low transaction levels which seem to result from a combination of economic fear and harsh mortgage constraints. Prices are also under pressure and slipping back.”

Chris Armstrong, a RICS member based in Wales, said: “The cuts are starting to bite. I can see very dark months ahead and very little anybody can do about

it.”

 

...

 

It comes amid historically low interest rates, which financial experts expect to rise next year amid rising inflation.

 

Melanie Bien, of mortgage brokers Private Finance, said: “Despite interest rates at record lows, a worrying number of homeowners are struggling to pay their mortgages.

 

“While normally these owners would sell up, with properties taking longer to shift as confidence falls in the housing market, this is not an option for many. When interest rates do start to rise, which many economists believe will happen in the second half of next year, this situation is only going to worsen and the number of repossessions could soar.”

 

The highlighted text is key here. With many struggling in a record low rate environment and prices already sliding forced rate rises will be the final nail.

 

 

Share this post


Link to post
Share on other sites
The highlighted text is key here. With many struggling in a record low rate environment and prices already sliding forced rate rises will be the final nail.

Indeed

Home owners are struggling to escape their misery by selling up as estate agents warn they are doing just one transaction a week amid a drop in demand from buyers who are unable to obtain affordable mortgages.

 

Selling out and beating the price drops may make great sense. AS more realise that, it should help start a trend of more aggressive selling

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×