Tuesday, Jul 10, 2007
The crash because figures were better than expected?
Expert: UK house price crash? Not when figures are better than expected!
A cr@ppy article but it begs a question: if the economic models of Nationwide and Halifax reflect market fundamentals... then the "abnormal" return of housing on the Nationwide and Halifax forecast is the irrational bubble. So, dear Optimist readers, if you wanna know how much house prices will drop, just take out the difference between the actual prices and the Nationwide / Halifax forecasts for the past 7 years... i.e. expect some 30% drop soon
Posted by confused76 @ 01:02 PM (145 views) Add Comment
7 Comments
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1. Stoatgobbler said...
EURUSD bid to buggery right now, Credit Spreads massively widening, Govvies bid up. No-one wants the junk, plus big story that CIBC is wearing 2 yards of sub-prime crapola. Seems that the half year end has brought some focus onto the issue. Straw/Camel's Back Nexus? I dunno. Whoever wrote the attached article is a c**t though, that's for sure.
2. Jr Hartley said...
If the 'experts' are struggling to predict house price movements, what makes you think your prediction is correct? I would hope for the sake of any recent FTB (or any buyer that has recently bought to live in) that there isn't a 30% drop.
3. royston said...
I am getting tired of having to say this: UK HOUSE PRICES ARE NOT RISING - AT ALL - EVEN IN LONDON!!!!!
Banks are no longer lending to the bottom end of the market - so far fewer of these properties are now encompassed in the average. An analogy would be Tescos sacking all their lowest paid staff and stating "We now pay more because the average wage is 6% higher". No, they don't - they pay less because they don't have to pay the lowest paid staff any more. With the housing market, less money is being turned over because the lowest end of the market has stagnated by being starved of credit. But both situations give the illusory effect of the 'average' being higher!
4. dohousescrashinthewoods said...
Slightly off topic, but the FT front page is showing the FTSE as +0.34% but the graph is staring at the floor.
I'm sure it's just a bug, but, as Royston says, all the indicators are trending down.
We may not have hit sea level, but we're on the down slope, and gathering speed.
Barring a fundamental shift, it's literally just a matter of time and Autumn seems to be a favourite.
(also, at this stage the chances of a fundamental shift, should one occur, being a positive one are not great given the number of massive potential negative shocks on the world economy horizon)
5. sold 2 rent 1 said...
The S&P is down 11 to 1520.
It has failed to beat the 1540 high (made in early June) on its second attempt.
Is this the top of the market?
6. confused76 said...
Royston,
What you say is partly true. But properties at the bottom of the market are being snatched by BTLers. Consider this.
However prices have risen in London over the past few months and by a lot. Will they continue? i doubt
7. Ihopeitgoeswithabang said...
What that really proves is that all the banks and buidling societies generally have no clue about prices going up or going down.