What now for house prices?

IveSeenTheLight

What's this topic about again?
Seems it's about getting thanks from a mute sockie

Cleaver

jenner wrote: »

i dont really understand how the house prices are working. i did a search yesterday on the trends for the past years. the area that we have just moved to, for semis (we just bought) has dropped over 20% in the past year. i anticipate that this will drop further, but thats just my guess

i thought i would check my friend's out, in her area, prices have dropped, but not for terrace houses (which she has), they have gone UP by 24% in the last year. even if you do it over 2 years, they have gone up by 21%

how can this be

Think of the housing market along the same lines as the value of companies. You ccould look at a graph of all the listed companies in the UK and their value (or at least their perceived value, set by the market) over a certain period. For sake of argument, let's say this graph is the FTSE All Share, up about 35% over the past 6 months or so. This means UK companies are 'worth' 35% more now than they were in March 09.

Like looking at the average national house price graph, it is possible to look at a chart or figures for both areas and make a judgement. UK companies are risiging in value, for example. The UK stockmarket is up a third in 6 months. Houses are worth about 8% more than they were at the 'bottom' (or the most recent one). These statements tell you everything or nothing about both scenarios, depending on how you look at it.

Going back to UK companies, you can start to dig deeper and in different directions. Are large companies going up along with medium size companies whilst small companies actually fall? This is like the housing market: maybe all flats are still falling in value whilst terrace housing, semi-detached and detached are rising.

You can dig even deeper to sectors on the FTSE. Are banks, mining and oil stocks moving up at a much faster rate than others? You could compare this to different areas for the housing market. Is London holding it's value as the North goes down and Wales goes up?

And if you want to go down to even more detail you could find UK stocks that have dropped 70% in the past 6 months as the market has grown. Maybe the company is not sound and people are getting out. Same in the housing market: averages could be going up nationally, but if someone built a shabby block of flats in a city already full of shabby flats in 2007 it could be that one particulary shabby flat is losing considerable value at present whilst a house round the corner is rising in value.

It's partly the reason why discussion on here is so interesting yet frustrating at the same time. You can look at any graph, chart, stat, individual property, sector, type of house, area, country and come up with a different perspective. When it all comes down to it, your property will be dragged up and down in a loose pattern with the national stats but, at the end of the day, it's worth what someone will pay for it.

I've just realised how sensible and dull this post is compared to the rest of the thread. Sorry about that.

Thrugelmir

Cleaver wrote: »

Think of the housing market along the same lines as the value of companies. You ccould look at a graph of all the listed companies in the UK and their value (or at least their perceived value, set by the market) over a certain period. For sake of argument, let's say this graph is the FTSE All Share, up about 35% over the past 6 months or so. This means UK companies are 'worth' 35% more now than they were in March 09.

Like looking at the average national house price graph, it is possible to look at a chart or figures for both areas and make a judgement. UK companies are risiging in value, for example. The UK stockmarket is up a third in 6 months. Houses are worth about 8% more than they were at the 'bottom' (or the most recent one). These statements tell you everything or nothing about both scenarios, depending on how you look at it.

Going back to UK companies, you can start to dig deeper and in different directions. Are large companies going up along with medium size companies whilst small companies actually fall? This is like the housing market: maybe all flats are still falling in value whilst terrace housing, semi-detached and detached are rising.

You can dig even deeper to sectors on the FTSE. Are banks, mining and oil stocks moving up at a much faster rate than others? You could compare this to different areas for the housing market. Is London holding it's value as the North goes down and Wales goes up?

And if you want to go down to even more detail you could find UK stocks that have dropped 70% in the past 6 months as the market has grown. Maybe the company is not sound and people are getting out. Same in the housing market: averages could be going up nationally, but if someone built a shabby block of flats in a city already full of shabby flats in 2007 it could be that one particulary shabby flat is losing considerable value at present whilst a house round the corner is rising in value.

It's partly the reason why discussion on here is so interesting yet frustrating at the same time. You can look at any graph, chart, stat, individual property, sector, type of house, area, country and come up with a different perspective. When it all comes down to it, your property will be dragged up and down in a loose pattern with the national stats but, at the end of the day, it's worth what someone will pay for it.

I've just realised how sensible and dull this post is compared to the rest of the thread. Sorry about that.

Also markets move with a herd instinct. As they offer the protection of the mass. Trouble is when a pride of lions attacks the herd scatters and the individuals then head in differently directions aimlessly. Regrouping when the situation settles down.

Most great exponents of markets have taken contary views.