House Price Crash 5

roswell

Hereward wrote:

I want proof of a bubble. I seem to recall that average property prices have only just passed the 100% increase in value since 1997 (this isn't evidence of a bubble, as property prices were subdued during the 1990's).

Can you show me proof of your statistics ?
if a property in 1997 was 100 K I dont think you will find its 200K now, of course this all depends on area, market demand / supply, if the property was over valued when it was 100 000 or under valued (which cant be proven).

But I think in most of the UK you are looking at 200 % or more inflation in the last 10 years. I know this is right for my location in the north east which generaly is well behind Average or london trends.

cwcw

RHemmings wrote:

Yes, that's possible. It's also possible that Haliwide are cooking the books. The interesting question is which of these two situations is more likely.

Yes, that's possible. But I'm not sure the Land Registry, reporting actual house prices at the sold price, are also cooking the books. http://www.landregistry.gov.uk/houseprices/

Currently they report annual house price inflation at 7%, monthly (October) at 1.2%, and an average price of £171,709.

Also, sales volumes in May - August 2006 averaged 107,000 per month. This was up from 93,500 per month in the same period in 2005.

So, from an official source which includes all properties (not just sales of new builds from one company), actual house prices are still going up steadily and sales volumes are healthy. Crash? What crash?

Alan_M_2

It is quite bizarre how the figures can differ so much, maybe booming areas are outselling flat areas?

If depressed areas aren't producing sales, then figures won't reflect that, they will only reflect the areas of the Country (London, Glasgow etc) where things are still running rampant.

The landregistry is historical fact and as a result indesputable, however using these figures to report inflation/deflation is again only as good as the information, if all the declining areas are failing to produce sales, then these findings are again somewhat scewed, by definition that they are more likely to contain a larger number of properties from booming areas.

This is where statistics fall flat on their face every time, negative or positive
statistics......

Without and in depth and extensive breakdown at how you actually arrived at them they are no more informative than a tabloid headline.....indeed, maybe Freddie Starr ate my equity

PoorDave

Alan_M wrote:

It is quite bizarre how the figures can differ so much, maybe booming areas are outselling flat areas?

If depressed areas aren't producing sales, then figures won't reflect that, they will only reflect the areas of the Country (London, Glasgow etc) where things are still running rampant.

The landregistry is historical fact and as a result indesputable, however using these figures to report inflation/deflation is again only as good as the information, if all the declining areas are failing to produce sales, then these findings are again somewhat scewed, by definition that they are more likely to contain a larger number of properties from booming areas.

This is where statistics fall flat on their face every time, negative or positive
statistics......

Without and in depth and extensive breakdown at how you actually arrived at them they are no more informative than a tabloid headline.....indeed, maybe Freddie Starr ate my equity

The problem is you never get a fair sample. If 100 houses were considered, in varying areas, and the sale prices were assessed, you'd have a problem, as one would be bound to take over a year to sell, thus leaving you waiting around!

However, anyone expecting a national statistic like "house prices are currently increasing at 7%" to accurately reflect all areas is in for a long wait. As you rightly say, it'll overestimate in flat growth areas, and by definition underestimate in higher growth areas. In actual fact, very few houses will rise at the "average" so people are (as always) better off considering sold prices in their street or thereabouts.

abaxas

Maybe it's time to remind everyone what during the last crash/correction the average houseprice still went up and by a healthy margin too.

Average house prices mean nothing.

cwcw

Alan_M wrote:

It is quite bizarre how the figures can differ so much, maybe booming areas are outselling flat areas?

If depressed areas aren't producing sales, then figures won't reflect that, they will only reflect the areas of the Country (London, Glasgow etc) where things are still running rampant.

The landregistry is historical fact and as a result indesputable, however using these figures to report inflation/deflation is again only as good as the information, if all the declining areas are failing to produce sales, then these findings are again somewhat scewed, by definition that they are more likely to contain a larger number of properties from booming areas.

This is where statistics fall flat on their face every time, negative or positive
statistics......

Without and in depth and extensive breakdown at how you actually arrived at them they are no more informative than a tabloid headline.....indeed, maybe Freddie Starr ate my equity

If you click the link I provided and download the full .pdf report, it does a breakdown of regions and local authorities. The only region with deflation is the East Midlands at 0.3% for October, but still 3.5% annual inflation. Specifically, the only authority with annual house price deflation is Nottingham, with a 0.7% downturn on a year ago, which is probably due to local factors that don't concern the wider market(i.e. a big problem with crime, especially gun crime, and the associated bad press that goes with it). All the other local authorities have healthy growth, some in double figures and very few in the 2/3% range.

Alan_M_2

Don't get me wrong, I'm not disagreeing with the statistics, what it can never include is houses that aren't selling because the values are dropping, and as the values are dropping the houses won't sell.

There's no area in the statistics for this eventuality, it may never be picked up at all, because as many people as possible will hang on and ride the drop if they can manage it, so in theory their house will never be sold for a drop in value even though for say, an 8 year timespan it could have theoretically lost 40% of it's value it will never be recorded as doing so.

Only once a sale occurs do you have a factual statistic.

Example. you bought a house in 1989 for £72,000

in 1993 it was worth £45,000

But you hung on and sold it in 2005 for £250,000

Statistically the value of that house never dropped, as no sale was recorded between 1989 and 2005.

It doesn't actually take away from the fact that the value of the house did actually drop, it was just never recorded as doing so.:)

Alan_M_2

abaxas wrote:

Maybe it's time to remind everyone what during the last crash/correction the average houseprice still went up and by a healthy margin too.

Average house prices mean nothing.

Explained in my post above how this occurs for statistical averages.

nelly_2

House price threads here, are like smoking threads down in Disscusion Time they used to be great fun but their just the same old sh1te now.

Actually maybe when were all thouroughly bored of house prices...thats when they'll drop

cwcw

Alan_M wrote:

Don't get me wrong, I'm not disagreeing with the statistics, what it can never include is houses that aren't selling because the values are dropping, and as the values are dropping the houses won't sell.

There's no area in the statistics for this eventuality, it may never be picked up at all, because as many people as possible will hang on and ride the drop if they can manage it, so in theory their house will never be sold for a drop in value even though for say, an 8 year timespan it could have theoretically lost 40% of it's value it will never be recorded as doing so.

Only once a sale occurs do you have a factual statistic.

Example. you bought a house in 1989 for £72,000

in 1993 it was worth £45,000

But you hung on and sold it in 2005 for £250,000

Statistically the value of that house never dropped, as no sale was recorded between 1989 and 2005.

It doesn't actually take away from the fact that the value of the house did actually drop, it was just never recorded as doing so.:)

Yes, but the sales volumes have increased by around 14% (107,000 a month May - Aug 2006 Vs 93,5000 a month May - Aug 2005). There might be some houses somewhere in the country not selling, but it seems a bit like clutching at straws when the volumes of sales have increased, the average house price is still increasing, and only 1 local authority in the country has had a (very slight and with explicable local factors) drop in its average sale price. Observing my local market, houses tend to display the "Sold" sign within 2 - 3 weeks of going on sale.