House prices need to drop 40% to be affordable discussion

wotsthat

ukcarper wrote: »

I don't think he'll ever admit it even if he does see it.

I've seen him do this before when he's misunderstood data. Instead of taking 5 minutes out just to check what's being explained he just keeps ploughing on.

I'm afraid 3.7x average income is the long term average as far as GD is concerned and he just can't see that even using his own figures it isn't.

IveSeenTheLight

Caveat_Mortgagor wrote: »

What you are asking is should we compare apples with apples, or apples with oranges?

The OP post was written in line with what others wished to happen.

Of course I prefer to compare like with like, hence the stance change to use average median is changing to long term comparison of using full time male mean.

example Halifax methodology

Halifax are showing: -

House Prices - Earnings ratio is 4.19
Long term (28 year) average is 4.06
Currently only 3.1% above the long term trend

Mortgage repayments as a percentage of income is currently 26.5%
Long term (28 year average) is 36.6%
Currently 38.1% (ratio) under the long term trend

Looking at this data, where is the driver for 40% reductions?

Jimmy_31

IveSeenTheLight wrote: »

Hmmm, yet you are predicting that increasing unemployment would drive prices 40% lower and thus give you the opportunity to buy



Classic, so you wish house prices to lower to an extent that you could buy for cash, without a mortgage.

Would that potentially not mean that those with a similar deposit could outbid you with a mortgage?



You seem to be saying you can afford to cover a mortgage, surely many more can also, so where's the drive and need to lower prices

I think you are misunderstanding me, the crash is already well under way here.

There are houses sat empty everywhere but not many people round here have the means to buy them so im quite happy to wait a bit longer as i see nothing improving around here for a long time.

Nobody will be outbidding anybody around here for many years to come.

Graham_Devon

wotsthat wrote: »

I've seen him do this before when he's misunderstood data. Instead of taking 5 minutes out just to check what's being explained he just keeps ploughing on.

I'm afraid 3.7x average income is the long term average as far as GD is concerned and he just can't see that even using his own figures it isn't.

Seems you can't see anything written.

For the second time. I didn't say, type, or suggest that 3.7 was the long term average. I've already corrected you once, so take it you are just being argumentative for the crack.

Graham_Devon

IveSeenTheLight wrote: »

The OP post was written in line with what others wished to happen.

Of course I prefer to compare like with like, hence the stance change to use average median is changing to long term comparison of using full time male mean.

example Halifax methodology

Halifax are showing: -

House Prices - Earnings ratio is 4.19
Long term (28 year) average is 4.06
Currently only 3.1% above the long term trend

Mortgage repayments as a percentage of income is currently 26.5%
Long term (28 year average) is 36.6%
Currently 38.1% (ratio) under the long term trend

Looking at this data, where is the driver for 40% reductions?

Oh look, back to the Halifax!! I can't even begin to wonder why!!!

Next time halifax reports a fall, it will be back to "but the Halifax admit their data is wrong, take no notice of them, the preferred measure is Nationwide".

IveSeenTheLight

Graham_Devon wrote: »

Oh look, back to the Halifax!! I can't even begin to wonder why!!!

Next time halifax reports a fall, it will be back to "but the Halifax admit their data is wrong, take no notice of them, the preferred measure is Nationwide".

You have no comment on the data then

Jimmy_31

IveSeenTheLight wrote: »

If it is that rough and work is hard to come by, have you considered moving to a better area?

I am planning on moving a couple of miles up the road from where i currently am, its a bit better of an area but most people would think it was rough but if you spend your life surrounded by lots of scroungers , thieves, drug dealers, sharks, smack heads etc then it comes to a point where you become a bit immune to it all and it doesnt really affect your way of life.

I know that might sound stupid to some people but if you know all the scum in the area and never ever let them take advantage of you then you and your family and friends will be left alone.

Lots of people made the mistake of moving to my area once all the new build estates went up during the boom because houses were a bit cheaper than surrounding areas and it was all they could afford.
I got to know quite a few of them through working on their homes and every single one of them regrets moving here.

This is how i know nobody will be rushing into these areas to buy up the cheaper houses.

wotsthat

Graham_Devon wrote: »

Seems you can't see anything written.

For the second time. I didn't say, type, or suggest that 3.7 was the long term average. I've already corrected you once, so take it you are just being argumentative for the crack.

Originally Posted by Graham_Devon

3.7x is just slightly below the long run average. So 40% slightly over does it if we want to hit the long term average.

On page 2 of this PDF from the CML, there is a long running average prices to average wage graph:
http://docs.google.com/viewer?a=v&q=...hWe66_1ty-tqMA

Page two of your 'proof' does indeed show a long running average. It doesn't however show that 3.7x is the long term average (or just slightly below it).

Can you not see that?

Graham_Devon

IveSeenTheLight wrote: »

You have no comment on the data then

I've commented on that data many times.

Why not use nationwide yourself?

ukcarper

Graham_Devon wrote: »

Seems you can't see anything written.

For the second time. I didn't say, type, or suggest that 3.7 was the long term average. I've already corrected you once, so take it you are just being argumentative for the crack.

You said it was just below and it is for Halifax but not CML.