Nationwide: prices down 1.4% in October, down 14.6% since last year

neas

Why do they lie, and say the rate is slowing?

Sep 2008 unadjusted drop = 1.7%
Oct 2008 unadjusted drop = 1.8%

The rate of fall is flattening out at around 1.7% month to month.


Good news for people like me

A person falling off at terminal velocity is it falling at the same rate.... yet the end result is still the same. ... BAD.

I love how they sugar coat these things.

Generali

The thing is, we have had house prices come down 15% without any particular rise in interest rates or unemployment. Typically, the direct effects of a recession last at least 2 years. Given that the housing market moves pretty slowly (according to the Nationwide it takes 12 weeks to sell a property) we can assume that the impact of recession will last at least 27 months and that's before we take into account the lost GDP that has to be made up too.

1.5% losses per month for the next 27 months is another third off prices. Of course that makes a lot of assumptions but is as good a back-of-envelope calculation as any.

ad9898_3

poppy10 wrote: »

Looks like with us entering recession now if you draw an imaginary line down from that peak we will perhaps see the trough around 2011-12 at around 120k.

Unless it's different this time:rolleyes:

Generali

neas wrote: »

Why do they lie, and say the rate is slowing?

They're not lying, they're talking about the change in the rate of change.

It's something of a pointless metric though IMO as there is no good reason for house price changes to gain and lose momentum like a downhill skier.

neas

The seasonally adjusted rate of change is changing... not the real rate of change.

In real terms the rate of decrease increased by 0.1% from 1.7% to 1.8%.

I never look at their quoted value but calculate my own percent drop from the table.

Assuming we are now 15% from the peak (which i believe is a optimistic view.... as 14.6% is yoy)

Falling at 1.7% for the next 23 months gives a house price drop of:

43% in 2 more years.

Cannon_Fodder

lethal0r

ah, my favourite graph! easy to understand

ad9898_3

Well done Cannon Fodder, as I can see its levelling off now.:D

moanymoany

The discussion about house prices is interesting - but not really that useful. Talk of smaller falls and 'stabilisation' is too soon.

The 90's crash was so much slower than this has been. It ended up being a terrible time for house prices - not to mention the people. As the time went by small business crumbled faster than a squeezed digestive biscuit.

Someone who had run a successful business - kids in private schools, lovely house, two good cars and au pair - a year later, kids in state schools, business gone, cars gone, living in emergency council accommodation. This was not a rare accurance. People's houses had been used to secure business debt and everything had to go!

This time the initial fall has been rapid. It was only May that there was widespread talk of house prices crashing. The follow on must be taken into account. The rapid falls on the financial market have become everyday and we have stopped gasping at the falls. 'Only 5% today.....!' I have not heard or read one article from respected pundits that has not said 'we ain't seen nothin' yet'.

A world recession will not lead to stabilisation of house prices. Brown Darling can say they are going to 'spend their way out of the recession' - for the whole world? By doing this they are somehow going to buck the whole world trend - I don't think so!

The outsiders are now saying we are going to have to completely rethink how we live because things are going to get very bad indeed. Remember them? They are the ones who said there was going to be a complete crash on the stock markets, with the banks who were involved in the dodgy financial dealings, with the inflated housing market. Those who said this amazing 'wealth' we all felt we had was just an illusion as there was nothing solid to back it. They are the ones who were laughed at and pilloried by the establishment - but they were right. I'm inclined to think they are right about the future as well.

Only time will tell - heading that way so far!

hoggums

It's interesting to see how the drops are now far in excess of the high of 11.5% on the graph.