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House Price Deflation - Who it affected
Pimperne1
Posts: 2,177 Forumite
How much have house prices actually gone down? Is it a crash or a correction? Who was closest in their House Price Prediction?
Using Land Registry Data the following is evident (although using their first published source without revisions as I am not sure how to get to their revised data anymore since they changed their website).
House Price Inflation/Deflation
In Sep 06 the average price was £169,568
In Jan 08 (peak) it was £186,045
In May 09 (trough) it was £152,497
Now it is £163,083
Number of Houses Sold
Between Sep 06 and Jan 08 an average of 90k homes sold each month
Between Feb 08 and May 09 an average of 42k homes sold each month
Between Jun 09 and present an average of 51k homes sold each month
Percentage change in prices
Between Sep 06 and Jan 08 house prices went up by about 10%
Between Jan 08 and May 09 house prices went down by about 18%
Between Jun 09 and present house prices went up by about 7%
Effectively, from peak, house prices are down about 11%.
How many purchasers, if they sold in the correction period, would lose out
(Just for clarity) If you bought before Jan 08 and sold now (ie the “correction period”) you could lose up to 11%.
If you bought in Jan 08 and sold before May 09 you could have lost between nothing and a maximum of 18% (there must be very few of these surely unless they were distressed sellers). Maximum numbers of these (excluding those sales excluded from Land Registry) 750k – maybe we should allow for the fact those who bought during that period have also benefitted from HPI since.
If you bought in Jan 08 and sold between Jun 09 and present then you could have lost between 18% and 11%. Maximum number of these (again excluding those Land Registry missed) 1.2m.
If you bought after Jun 09 then you could have made some money (if you sold now) although there have been some ups and down in the interim.
How many privately owned homes are there in the UK - 20m? If so then this puts the numbers who have lost out into perspective.
Who was closest in their prediction?
Not me, that’s for sure. Since 2007 I have been predicting a “soft landing” which I would describe as house prices remaining at the same level as when I started predicting (ie Jun 07 – average price £180,594 on LR on the day I joined).
Who are the worst at predicting then? Firstly, Moneyweek have been predicting an HPC since 2004 so in terms of length of time of being wrong then they are relative muppets. Worst still though is a guy called Jonathan Davis (who is a Financial Planner would you believe) who Sold to Rent back in 2002 and has been predicting HP Armageddon since then (although earliest recorded prediction is back in 2004). Not only that but Jonathan continues to predict an HPC (although not at 2004 prices you understand) and his latest iteration in October 2010 was for a nominal crash of between 40% and 50% before the end of 2013 (although he could still be right).
Anyway, this is back of a fag packet stuff but worth considering (and happy for DervProf to rip my figures up for toilet paper).:o
Using Land Registry Data the following is evident (although using their first published source without revisions as I am not sure how to get to their revised data anymore since they changed their website).
House Price Inflation/Deflation
In Sep 06 the average price was £169,568
In Jan 08 (peak) it was £186,045
In May 09 (trough) it was £152,497
Now it is £163,083
Number of Houses Sold
Between Sep 06 and Jan 08 an average of 90k homes sold each month
Between Feb 08 and May 09 an average of 42k homes sold each month
Between Jun 09 and present an average of 51k homes sold each month
Percentage change in prices
Between Sep 06 and Jan 08 house prices went up by about 10%
Between Jan 08 and May 09 house prices went down by about 18%
Between Jun 09 and present house prices went up by about 7%
Effectively, from peak, house prices are down about 11%.
How many purchasers, if they sold in the correction period, would lose out
(Just for clarity) If you bought before Jan 08 and sold now (ie the “correction period”) you could lose up to 11%.
If you bought in Jan 08 and sold before May 09 you could have lost between nothing and a maximum of 18% (there must be very few of these surely unless they were distressed sellers). Maximum numbers of these (excluding those sales excluded from Land Registry) 750k – maybe we should allow for the fact those who bought during that period have also benefitted from HPI since.
If you bought in Jan 08 and sold between Jun 09 and present then you could have lost between 18% and 11%. Maximum number of these (again excluding those Land Registry missed) 1.2m.
If you bought after Jun 09 then you could have made some money (if you sold now) although there have been some ups and down in the interim.
How many privately owned homes are there in the UK - 20m? If so then this puts the numbers who have lost out into perspective.
Who was closest in their prediction?
Not me, that’s for sure. Since 2007 I have been predicting a “soft landing” which I would describe as house prices remaining at the same level as when I started predicting (ie Jun 07 – average price £180,594 on LR on the day I joined).
Who are the worst at predicting then? Firstly, Moneyweek have been predicting an HPC since 2004 so in terms of length of time of being wrong then they are relative muppets. Worst still though is a guy called Jonathan Davis (who is a Financial Planner would you believe) who Sold to Rent back in 2002 and has been predicting HP Armageddon since then (although earliest recorded prediction is back in 2004). Not only that but Jonathan continues to predict an HPC (although not at 2004 prices you understand) and his latest iteration in October 2010 was for a nominal crash of between 40% and 50% before the end of 2013 (although he could still be right).
Anyway, this is back of a fag packet stuff but worth considering (and happy for DervProf to rip my figures up for toilet paper).:o
0
Comments
-
Howcome those who DID predict falling house prices, are the worst at predictions?
Surely those who never even gave a thought to predicting prices would fall, are worse at predicting?
The ones that predicted house prices would fall, may have got the total fall wrong and time frame wrong. However, those that didn't even predict prices falling have quite frankly, got it completely wrong.0 -
Graham_Devon wrote: »Howcome those who DID predict falling house prices, are the worst at predictions?
Surely those who never even gave a thought to predicting prices would fall, are worse at predicting?
The ones that predicted house prices would fall, may have got the total fall wrong and time frame wrong. However, those that didn't even predict prices falling have quite frankly, got it completely wrong.
Okay Graham, there's going to be a terrorist bombing in the UK. Does that make me good at predicting?0 -
-
Graham_Devon wrote: »Slightly weird example.
Well how about this (I am very confident by the way)? There will be a house price crash.0 -
Well how about this (I am very confident by the way)? There will be a house price crash.
How about a real example.
Whos closer with their prediction...
Person A: 2009, says the price of oil is going to increase 50%.
Person B: 2009, says the price of oil is going to stagnate.
Person C: 2009, says the price of oil is going to fall 20%
You can answer A, B or C.0 -
Graham_Devon wrote: »How about a real example.
Whos closer with their prediction...
Person A: 2009, says the price of oil is going to increase 50%.
Person B: 2009, says the price of oil is going to stagnate.
Person C: 2009, says the price of oil is going to fall 20%
You can answer A, B or C.
I would say that they are all likely to be correct.0 -
I would say that they are all likely to be correct.
Indeed.
Sorry, I thought you would have been able to follow the jist.
Who's most correct as of todays date.
Hard work this. I am therefore inclined to believe you know exactly the point I'm making. It's easy to laugh at those who DID predict the correct outcome, but got the variables wrong, while completely forgetting others couldn't even predict the correct outcome, let alone the variables.0 -
Graham_Devon wrote: »Indeed.
Sorry, I thought you would have been able to follow the jist.
Who's most correct as of todays date.
Hard work this. I am therefore inclined to believe you know exactly the point I'm making. It's easy to laugh at those who DID predict the correct outcome, but got the variables wrong, while completely forgetting others couldn't even predict the correct outcome, let alone the variables.
So what you are saying is that if I predict a house price crash of 30% today and you don't and in 2018 there is an 18% drop in prices then I am better at predicting the housing market than you?0 -
Oh look. Timing. zzzzzzzz
Hows that 2002 soft landing looking pimp?0 -
How much have house prices actually gone down? Is it a crash or a correction? Who was closest in their House Price Prediction?
Using Land Registry Data the following is evident (although using their first published source without revisions as I am not sure how to get to their revised data anymore since they changed their website).
House Price Inflation/Deflation
In Sep 06 the average price was £169,568
In Jan 08 (peak) it was £186,045
In May 09 (trough) it was £152,497
Now it is £163,083
Number of Houses Sold
Between Sep 06 and Jan 08 an average of 90k homes sold each month
Between Feb 08 and May 09 an average of 42k homes sold each month
Between Jun 09 and present an average of 51k homes sold each month
Percentage change in prices
Between Sep 06 and Jan 08 house prices went up by about 10%
Between Jan 08 and May 09 house prices went down by about 18%
Between Jun 09 and present house prices went up by about 7%
Effectively, from peak, house prices are down about 11%.
How many purchasers, if they sold in the correction period, would lose out
(Just for clarity) If you bought before Jan 08 and sold now (ie the “correction period”) you could lose up to 11%.
If you bought in Jan 08 and sold before May 09 you could have lost between nothing and a maximum of 18% (there must be very few of these surely unless they were distressed sellers). Maximum numbers of these (excluding those sales excluded from Land Registry) 750k – maybe we should allow for the fact those who bought during that period have also benefitted from HPI since.
If you bought in Jan 08 and sold between Jun 09 and present then you could have lost between 18% and 11%. Maximum number of these (again excluding those Land Registry missed) 1.2m.
If you bought after Jun 09 then you could have made some money (if you sold now) although there have been some ups and down in the interim.
How many privately owned homes are there in the UK - 20m? If so then this puts the numbers who have lost out into perspective.
Who was closest in their prediction?
Not me, that’s for sure. Since 2007 I have been predicting a “soft landing” which I would describe as house prices remaining at the same level as when I started predicting (ie Jun 07 – average price £180,594 on LR on the day I joined).
Who are the worst at predicting then? Firstly, Moneyweek have been predicting an HPC since 2004 so in terms of length of time of being wrong then they are relative muppets. Worst still though is a guy called Jonathan Davis (who is a Financial Planner would you believe) who Sold to Rent back in 2002 and has been predicting HP Armageddon since then (although earliest recorded prediction is back in 2004). Not only that but Jonathan continues to predict an HPC (although not at 2004 prices you understand) and his latest iteration in October 2010 was for a nominal crash of between 40% and 50% before the end of 2013 (although he could still be right).
Anyway, this is back of a fag packet stuff but worth considering (and happy for DervProf to rip my figures up for toilet paper).:o
Average prices yeah.
Is it fair to say that average prices effected, basically, no one.
I think most will understand the point I'm making.
Maybe not the pimperni1.0
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