London is a joke (moan)

Digsby

I should add to that though, that if the index does go negative, it will not be because prices have been falling (much) but because they'll have not risen by the 30% they did over the year before. But it's still significant, IMO

Jhoney_2

Digsby wrote: »

So many trains of thought! I'm trying to keep on top of them, but I don't want to spend my whole bank holiday chatting on this forum (pleasant as it is). No need to clock in - if, as and when is perfectly usual and common to us all.:)



Yes months. The annual % change in Lambeth will be negative in September or October if the trend continues. Personally, if I found myself quoting data when I thought it supported my view, and doubting it when it didn't, I'd suspect I'm falling foul of confirmation bias, and I try to avoid that particularly unfortunate aspect of he human psyche if possible.

I took that paragraph you are referring to as meaning there will be a HPC within months. That's what I doubt. I do not do the data crunching you do, so if you say that specifically regarding Lambeth, your research will confirm one way or another, bu if the caveats and other points mentioned are not reflected in the source I would suggests a bigger pinch of salt.



It wouldn't take too much effort to find out the % of the market is new builds right at the moment, which would at least give some idea of that factor.

It's essential data imv, the only homes being built are this demographic and that does push up the price of homes in the surrounding areas too.

But still, c'mon, admit that when you asked me "300 out of how many", if you were expecting an answer, you were expecting maybe 400 or 500, weren't you? Certainly nothing like 6k. Even if new build, re-listings, duplicates and whatnot meant the figure was 3k, it's nowhere near what you'd expect. I was shocked myself.

It was interesting, but not shocking. I was not trying to catch you out and I had no preconceived idea about the answer - it was just to complete the picture of your statement. Not much shocks me economically these days Digsby:).

There was an area I was looking at recently which has gone up by 200K in the last 3yrs. Obviously, I could buy elsewhere and get more house/space for my money etc etc, but for my circumstances and criteria that is the new purchase reality.

I agree, but you mentioned January being a quiet month, and I can't think of a better way of testing that as an explanation than comparing with the last few previous January's.

However your recent posts omitted to mention these factors and you concluded that everything was down to price.

When you look at a graph of volumes over the past 5 years, there is a dip every winter as we all know - this year looks unseasonably deep.

This LR report we're talking about is saying that overall in London, sales were 26% down in March compared to a year ago - all sales in March are not logged yet and won't be for a couple of months, but they can extrapolate the sales they have so far and predict the eventual number pretty accurately.

Again March 2014 is an anomaly due to MMR commencing in April... that was the end of the stampede quarter - a race to arrange a mortgage and purchase before things became tougher...which increased prices.

I would expect a significantly lower figure. There were also record sales in this period so I think it is verifiable, should anyone choose to do so. I dont deny it may be significant, but the interpretation (yours or LR stats) is an overview that records hard facts and does not apportion weight to the nuances of/reasons for a fast changing market. It reflects the dry numbers of those historic (post sale) facts but that's all it does - look back.

How many analysts saw interest rates being so low for so long? I don't criticize them for that, it's was not possible - and what they are also doing is looking at probabilities within certain margins by looking back at statistics - but there wasn't a suitable precedent for the cause of what happened, and so there wasn't one for a solution time-frame - we are still in uncharted territory treading water.

Don't dismiss the caveat/anomaly information too soon.

pinpin

Need to be earning MEGA bucks to live there, really.
A Lawyer, or a top plastic surgeon or something.

Digsby

No I wouldn't be so brazen as to insist we're months away from an HPC - unfortunately, I can't see into the future!

The evidence is suggesting though that either the whole of 2014 was an anomaly, and we are returning to the phase we were in before, i.e. a long drawn out stagnation, or 2014 was a mini-boom (or just that the booms are becoming shorter), and we're about to experience the accompanying bust, or we're experiencing an unusually sharp slowdown in the boom phase of the next cycle.

Like you say though, we're in uncharted waters. It's a grand experiment in whether busts can be averted through macroprudential regulation, and a lot could change. It could be down to factors other than market fundamentals, we still don't know the effect of the pension pot changes, and the election results might reverse the trend (though from the little bit of research I've done, historically whatever trend is happening before the election is amplified after it, but this one could be different).

The answer to the question of what happens next is "we don't know". I was just putting it out there that it's not in any way definite that its "upwards and outwards" from here on in.

We aren't so different, in that I *will* be buying within the next year (in an expensive part of the country), whatever the state of the market at the time, i.e. "it is what it is", because I want a secure home for me and my family and don't want to wait any longer.

What happens to prices after that matters not one jot to me, except that if there is a short sharp correction down, I'll have been able to get more for my money by waiting just a little longer, and that's why I do what I do.

There were also record sales in this period so I think it is verifiable, should anyone choose to do so.

The best we've managed since 2008 is to match the troughs of 1995-2008 in terms of volume. It varies between areas, some beat the troughs and others don't, but no records have been broken, unless you're talking about something else.

What actually happened, was an already established downward trend in volumes intensified, with a small (just about detectable) blip just before MMR was introduced.

I'm saying this from memory because I've already looked into it, as I'm sure you'll have guessed by now

Digsby

Jhoney wrote: »

I dont deny it may be significant, but the interpretation (yours or LR stats) is an overview that records hard facts and does not apportion weight to the nuances of/reasons for a fast changing market. It reflects the dry numbers of those historic (post sale) facts but that's all it does - look back.

Absolutely correct.

The market is not always changing fast though, as evidenced by the 8 months or so of roughly flat, slightly falling prices in Lambeth. Knowing that might not mean you get your dream home for a bargain, but it does inform your purchase decision - right now, there's no need to be in a rush to buy in Lambeth from a purely financial standpoint, you can afford to take your time finding somewhere that is right for you, without worrying about prices running away from you, and that's a big deal, because the general meme at the moment is that if you don't buy right now, you'll be priced out soon, wherever you are, which might lead you to make a rash decision.

Cornocopia seemed to think up thread, that because I said the annual % change in price for Lambeth was 15.2%, that means that prices are rising, that it means that if you divide 15.2 by 12, that tells you how much prices are rising per month (sorry if you didn't didn't think that, it seemed like it, and it's a misconception I have come across with several people).

The main crux of this, for me, is that it's really not a good idea for you, as a buyer, to have misconceptions, in terms of cold, hard facts, about the market you're buying into.

In some parts of the country (more than you might have been led to believe if you haven't looked into it), prices have been flat or falling for years, and are still not even close to 2007 prices - not even nearly close but way off. I'm sure plenty of people in those particular areas know that, but it doesn't seem to be common knowledge that it's the case in as many places as it is.

Merthyr Tydfil was reported by the BBC as one of the top 10 best performing areas in March - prices are at 2004 levels there! Take wage inflation into account (such as it might be), and houses have probably never been as cheap there in the past 15 years, and they are getting cheaper by the month. The level of analysis of the data the BBC presents on house prices is appalling, yet it is where most people's opinions on the state of the housing market are formed.

When you're browsing Rightmove looking for somewhere suitable to buy, you have to make a decision on each about whether you want to pursue it further. Where it's situated, how many bedrooms, if the kitchen is big enough, off road parking, all this practical stuff about whether it's suitable is pretty primary, but also, whether it might be within your reach given your budget.

Going by the asking price alone isn't a good way of doing that, because we know, from independent research, that asking prices on the whole are "unrealistic". Assuming that the seller does actually want to the sell the house, that means that they are likely to accept an offer quite a bit under the asking price - but how can you possibly judge whether this seller is being "realistic" or not?

The point of my research, and the point of the chrome extension, is to inject a little bit of objectivity into an otherwise wholely subjective process. A sanity check, if you will.

Jhoney_2

Digsby wrote: »

Absolutely correct.

The market is not always changing fast though, as evidenced by the 8 months or so of roughly flat, slightly falling prices in Lambeth. Knowing that might not mean you get your dream home for a bargain, but it does inform your purchase decision - right now, there's no need to be in a rush to buy in Lambeth from a purely financial standpoint, you can afford to take your time finding somewhere that is right for you, without worrying about prices running away from you, and that's a big deal, because the general meme at the moment is that if you don't buy right now, you'll be priced out soon, wherever you are, which might lead you to make a rash decision.

Cornocopia seemed to think up thread, that because I said the annual % change in price for Lambeth was 15.2%, that means that prices are rising, that it means that if you divide 15.2 by 12, that tells you how much prices are rising per month (sorry if you didn't didn't think that, it seemed like it, and it's a misconception I have come across with several people).

The main crux of this, for me, is that it's really not a good idea for you, as a buyer, to have misconceptions, in terms of cold, hard facts, about the market you're buying into.

In some parts of the country (more than you might have been led to believe if you haven't looked into it), prices have been flat or falling for years, and are still not even close to 2007 prices - not even nearly close but way off. I'm sure plenty of people in those particular areas know that, but it doesn't seem to be common knowledge that it's the case in as many places as it is.

There are indeed lots of places outside of the M25/NE and elsewhere that are experiencing what you describe. We are all very much aware there is a North/West divide in terms of investment/development and good/comparable job opportunities. There were/are also parts of London that were 'undervalued' e.g East London pre Olympics, SE so the recent investment and subsequent 'correction' has seen them shoot up in price too - by which I mean the jump has been marked.

Merthyr Tydfil was reported by the BBC as one of the top 10 best performing areas in March - prices are at 2004 levels there! Take wage inflation into account (such as it might be), and houses have probably never been as cheap there in the past 15 years, and they are getting cheaper by the month. The level of analysis of the data the BBC presents on house prices is appalling, yet it is where most people's opinions on the state of the housing market are formed. The top 10 info was from Land registry - saw it there as a graphic and cut/pasted it.

When you're browsing Rightmove looking for somewhere suitable to buy, you have to make a decision on each about whether you want to pursue it further. Where it's situated, how many bedrooms, if the kitchen is big enough, off road parking, all this practical stuff about whether it's suitable is pretty primary, but also, whether it might be within your reach given your budget.


Going by the asking price alone isn't a good way of doing that, because we know, from independent research, that asking prices on the whole are "unrealistic". Assuming that the seller does actually want to the sell the house, that means that they are likely to accept an offer quite a bit under the asking price - but how can you possibly judge whether this seller is being "realistic" or not?

It does also provide previous sales/ sales nearby detail so just not asking price alone as a preliminary consideration.

The point of my research, and the point of the chrome extension, is to inject a little bit of objectivity into an otherwise wholely subjective process. A sanity check, if you will.

If you can unearth sanity in this quagmire, then you are to be congratulated.

Digsby

Cornucopia wrote: »

I'm slightly confused by some of that. I understood that you had the capability to follow each individual property. This is clearly different to following trends by Postcode or Borough.

In terms of volumes of properties being marketed versus sales, I too find that surprising, though because property sales take so long, you probably need to be following this over a period of 6 months-a year to see the true picture.

It's certainly not my personal experience. I've withdrawn properties from sale twice, and sold from initial marketing maybe 10 times over the past 20 years.

The Chrome extension is for individual properties (although it also lets you explore the LR HPI data for the area the property is in which I've been using throughout this conversation for information about price trends, in Lambeth or Merthyr for example). But, like you, I have various bits of software for different purposes.

Cornucopia wrote: »

If we take the figures at face value, it suggests that the pent-up demand we are also told exists is not being satisfied because of high prices, not because of under-supply (though it would be interesting to know how that works in London).

I've already described a mechanism for this, which is that sellers (particularly sellers-in-residence) will not or cannot sell for a significantly lower price, and suffer little or no financial impact whilst the property is on the market for an extended period.

It certainly seems that way and that's how I've described it in the past - that there isn't so much a shortage of supply, but more a shortage of supply at a price that buyers can pay.

If that research about asking prices being "unrealistic" is true, it's not surprising if this is the case - the two bits of research appear confirm and complement each other.

I keep meaning to write a report that will tell me how long the average RM listing has been listed for. We know properties are re-listed, so it wouldn't be wholly accurate, but it might confirm if it is indeed the case that sellers are sitting on the market for extended periods.

We're told by Rightmove that the average property takes 6 weeks to sell - but that's only counting those properties that *do* sell!

I do have data about the number and extent of price reductions on the market, if you're interested in exploring that.

Cornucopia wrote: »

I also wonder about the impact of price-related commission on the part of Estate Agents.

I wonder that too. If it is (or starts) hurting agents bottom line, then what can they do? They can't change buyers ability to pay, and if they can't talk their sellers into reducing their prices, then as far as can see they will have to stop out bidding each other on valuations and start setting lower price expectations from the outset.

Jhoney_2

....or more sellers will use online EAs...thus having less fees to pay and thereby having room to negotiate should they choose to do so.

Digsby

How much are agents fees in general? 5%? (not rhetorical)

Jhoney_2

Digsby wrote: »

How much are agents fees in general? 5%? (not rhetorical)

It's come down a lot in london anyway - was about that 10yrs ago, now due to competition it's 0.5-3%. However that's a lot of money when you are talking london house prices.

A typical 3b terrace gets them c8-10K+vat on 1% and then the quality suffers as they really wanted more money so don't put in the effort - until they sell the others or promote those ones less... Online is less /fixed/lower, no tie ins, make your own packages and they still use principal sites RM etc.