What house price crash?

Hippychick

I would be worried as to why they are selling so soon, especially if it's a new build as they won't have done anything to improve it to possibly justify an increase..

Do they have valid reasons for sale? if not then i'd check out the neighbours, estate etc to see if anything is dodgy.

Blacklight

Cannon_Fodder wrote: »

Would love to see a link to the facts of post #7. I thought we were a touch over the trend line, again, since the 'recovery'.

Strange for such insight to come from a newbie poster. Who is behind the mask?

Starting with the index of 100 in 1952 and adding 8.6% year on year (8.6% being the average annual increase since 1952) we get to 11,165. Compare that with the actual index of 8,574 for Q4 2009 and you will see that we have a deficit of 2,591 points below the 'trend'.

Years where actual house price indexes have matched the 8.6% pa rise are 1978, 1992, 2003 and with 15% inflation in prices for the next five years, 2014.

At the end of 2009 the mismatch with the historical information (-2,591 index points) is the farthest below trend we have ever been. Even when house price inflation was flagging in the late 90's (1998 being the lowest point of the trough) due to inflation of 0% on average between Q4 1989 and Q4 1996 we are now behind by an additional 1,606 points on this severely depressed period (although you can see that by 2003 we were back on trend).

I hope that makes sense.

Arthritic_Toe

Blacklight wrote: »

I hope that makes sense.

Your figures are complete twaddle. It looks like you averaged the annual % change from 1952 to 2009 from the Nationwide data to get your 8.6%. You can't do that.

Say your house is worth 100,000. It then increases by 20% one year and then decreases by 16.7% the next year. The average annual increase according to you is +1.65% but guess what! -your house is still worth 100,000. Herein lies the clue as to why your figures are twaddle.

Cannon_Fodder

Source, please? Nationwide, Land Registry, Halifax, HMRC, CLG ?

Haven't seen figures back to 1952. Would be interesting.

A common trend graph used on here is;



(or variations thereof)

A period of +40% HPI in the 70s would skew things from the average 2.9% on this graph, but I doubt by as much as near tripling a 60 year average.

As a new poster you might have trouble adding links - just create a post with minimal text, post it, then go back and edit it to add the link, that should work.


(Or it could be twaddle)

Arthritic_Toe

Cannon_Fodder wrote: »

Source, please? Nationwide, Land Registry, Halifax, HMRC, CLG ?

Haven't seen figures back to 1952. Would be interesting.

Hi Mr (or Ms) Fodder,
FYI - The Nationwde data since 1952 is here:
http://www.nationwide.co.uk/hpi/downloads/UK_house_price_since_1952.xls
If that link has been removed, go to the Nationwide site and look under /hpi.

Blacklight

Arthritic_Toe wrote: »

Your figures are complete twaddle. It looks like you averaged the annual % change from 1952 to 2009 from the Nationwide data to get your 8.6%. You can't do that.

Say your house is worth 100,000. It then increases by 20% one year and then decreases by 16.7% the next year. The average annual increase according to you is +1.65% but guess what! -your house is still worth 100,000. Herein lies the clue as to why your figures are twaddle.

As far as I can see £120k / 1.167 = £102,827.76. Which is more than a 1.65% increase, but that's beside the point.

If you're using data for two years (i.e. two numbers) I can follow your logic however in this case we have fifty seven years to work with.

The point really remains that prices increase historically and nothing leads me to belive that there will be a further catastrophic event that ultimately yeilds a permanant decrease to the 8.6% over the last 60 years.

I'd invite you to select blocks of ten years and see what results you come up with.

@ Cannon Fodder - the exponential curve alters with whatever data is inputted. My point is that there is also an underlying linear trend which one may take into account when discussing 'double dip'.

bodgerx

CloudCuckooLand wrote: »

What did other new builds on the development go for? i.e. was this a particular one-off bargain, perhaps the last plot extra discount, which might mean its not now being too cheeky.

Or have they all gone around £152k, so that should have set that price as the going rate for the house type.

But, as always, asking price is a starting point. They will probably have built in some leeway. EA may have priced based on the recent report that says sold prices are -7% of asking price on average, and given themselves negotiating room, which would make £162k-ish their target.

The vendor will also be thinking your first offer is not your best offer.

So its now a case of who blinks first...how badly do you want it?

use Rightmove Price Comparison to check nearby similar properties;

They went for similar if not slightly less. On this row (of 5, pretty much identical) they ranged from £140K-£157K.

Using the Mouseprice estimator, it thinks the price should be now £155K. This is taking into account the small rise in our area since the original sale date.

I'm guessing he wants mid 160's. Thing is, he wants out by April (moving Job, and has to be some distance away). So, if he doesn't get anyone sniffing closer to his deadline, there might be a deal to be done.

As far as the house itself is concerned, we would really like it. Not bad room sizes for a new build. Garden lets it down a little. I think if the garden was more useable we would be tempted to up the offer quite a bit.

I'm very fearful of paying too much - if, for some reason we had to sell in future, we don't want to find ourselves in negative equity. We have a 10%+ deposit for this, but I'm not sure it would be protection enough given the large premium of the initial sale price.

I admit, I dislike the idea of lining this guy's pockets to the tune of 20K for sitting on it for 6 months.

It is such a hard thing to judge on a new estate - the valuations must be difficult to judge even for the experts.

Arthritic_Toe

Blacklight wrote: »

As far as I can see £120k / 1.167 = £102,827.76. Which is more than a 1.65% increase, but that's beside the point.

If you're using data for two years (i.e. two numbers) I can follow your logic however in this case we have fifty seven years to work with.

The point really remains that prices increase historically and nothing leads me to belive that there will be a further catastrophic event that ultimately yeilds a permanant decrease to the 8.6% over the last 60 years.

I'd invite you to select blocks of ten years and see what results you come up with.

@ Cannon Fodder - the exponential curve alters with whatever data is inputted. My point is that there is also an underlying linear trend which one may take into account when discussing 'double dip'.

You completely missed the point. You have come to all these nice wordy conclusions based on a primary school maths error. Your 8.6% figure is wrong. You cannot average the % increases and decreases, which is what you have done to arrive at your 8.6%.

Blacklight

Arthritic_Toe wrote: »

You completely missed the point. You have come to all these nice wordy conclusions based on a primary school maths error. Your 8.6% figure is wrong. You cannot average the % increases and decreases, which is what you have done to arrive at your 8.6%.

Are you arguing that 8% is too high? Perhaps you'd like to calculate it another way and report back your own conclusions?

bodgerx

Blacklight wrote: »

Are you arguing that 8% is too high? Perhaps you'd like to calculate it another way and report back your own conclusions?

Hey, back to the topic at hand!