When will the correction come to house prices?

padington

Bubble_and_Squeak wrote: »

well well well.
i've been wrong all these years.
i thought that a sale agreed in april would take several months to go through the motions and would complete sometime around july.
thanks for putting me straight on that one!

Time to stop talking and start listening.

padington

danothy wrote: »

I guess my point is still "Are you sure about that? Have you actually checked?". Because if you look at London sale prices for those months, or even just inner London there is still no "the" peak in April:



The fact is that houses have sold for more than they did in April of this year since April. That is true across the UK and specifically in London. If you called the peak in April then it seems you called it wrong ...

Good work.

AndyGuil

Bubble_and_Squeak wrote: »

like i've said before i would expect to see a downward trend established by the last quarter.
i have no idea what kind of time lag is involved in LR figures. i'm guessing between 3-5 months.

Ok, so it's moved from April to by the last quarter. Let's see what the land registry says by the end of the year. Very few registrations will go to 5 months, 3 months is far more reasonable as this will cover almost all of them and is certainly the driving number. Now it is has gone electronic the lag will reduce.

danothy

Jason74 wrote: »

To be fair, I think that you and Bubble could be talking at cross purposes here. Certainly, your explanation is the correct one from the technical point of view. But, where Bubble also has a point, is that LR for July will reflect sales agreed in April or thereabouts. So if we take time of sale as being the sale agreed date (as Bubble seems to be doing), it is quite possible that April was the time that prices were at their highest in terms of sales being agreed. Land registry hitting a high in July would actually support that assertion rather than undermining it.


Of course, if LR continues to rise in the coming Months, Bubble's assertion will be proved wrong, but at this stage, the Jury's still out on that one.

There's definitely something to the idea that the LR is a reflection of an initial offer made some time before, but the price agreed at exchange can change from the initial offer based on surveys or the market moving or just greed/spite. Personally, I think that the price people agree to actually pay at exchange and then go on to do so at completion is a better reflection of what prices actually are than an initial non-binding agreement.

Bubble_and_Squeak

AndyGuil wrote: »

Ok, so it's moved from April to by the last quarter. Let's see what the land registry says by the end of the year. Very few registrations will go to 5 months, 3 months is far more reasonable as this will cover almost all of them and is certainly the driving number. Now it is has gone electronic the lag will reduce.

my friends recent purchase took 10 months from offer accepted to completion. a doubt there are many that take that long but probably there are a lot that take longer than 3 months.

Bubble_and_Squeak

AndyGuil wrote: »

Ok, so it's moved from April to by the last quarter. Let's see what the land registry says by the end of the year. Very few registrations will go to 5 months, 3 months is far more reasonable as this will cover almost all of them and is certainly the driving number. Now it is has gone electronic the lag will reduce.

you just want to believe that because it suits your argument.
truth is no one knows.
LR is yesterdays news.

AndyGuil

Bubble_and_Squeak wrote: »

you just want to believe that because it suits your argument.
truth is no one knows.
LR is yesterdays news.

I'm not making a point. Just making sure it is measurable.

AndyGuil

Bubble_and_Squeak wrote: »

my friends recent purchase took 10 months from offer accepted to completion. a doubt there are many that take that long but probably there are a lot that take longer than 3 months.

There are a few that take longer. 95% are 3 months. This is clearly a dominating number.

Jason74

danothy wrote: »

. Personally, I think that the price people agree to actually pay at exchange and then go on to do so at completion is a better reflection of what prices actually are than an initial non-binding agreement.

Of course, nobody's going to argue with that (or at least I'd hope not!). It just needs to be acknowledged that in a fast changing market, the LR data can show a very different picture to what is happening on the ground, as it's effectively three Months out of date. That's certainly been the case in London in the past year or so. Initially, LR data didn't show just how fast prices were rising, as it was effectively three Months behind that particular curve. And likewise now, when there has been a dramatic slowdown in much of London, the LR data is behind that curve now, showing rapidly rising prices when that is certainly not the reality in many parts of the city.

Bubble_and_Squeak

AndyGuil wrote: »

There are a few that take longer. 95% are 3 months. This is clearly a dominating number.

how do we know this for certain?
i'd agree that the majority would take around 3 months but 95% sounds a bit optimistic on your part