Saturday, May 30, 2009
Another article on nationwide/RICS
Financial times: Evidence mounts to suggest worst is over
Chris Giles discusses the latest Nationwide & RICS figures
"Is a bottom to the housing downturn in sight? Latest figures from the Nationwide Building Society, showing that house prices rose in two of the past three months, mean the question can be asked with a straight face for the first time in well over a year. "
Capital Econics quoted, as usual. New think tank/consultant media types Fathom Financial Consulting quoted as well.
Posted by hmm @ 10:14 AM (2543 views) Add Comment
26 Comments
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1. greytornado said...
So - the presses are rolling and you have been lulled into thinking the worst is over? We ain't seen nothing yet as the saying goes................this is the calm before the real storm. Ask yourself, why have the Chinese doubled their gold bullion reserves?
2. This comment has been removed as it was found to be in breach of our Blog Policies.
3. icarus said...
Nowadays if the room starts smelling of roses you look for the coffin.
4. paul said...
if the room starts smelling of roses you look for the coffin
Very good. I like that.
5. nomad said...
mander @ 2. When you find out that you have cancer you are too depressed to start with but in few months time you start to dream that you will recover (the stage housing market it is right now) but deep inside you know you are going to die in about 5 years time.
Your speaking out of ignorance there Mander, just to make a point graphically. Cancer is a great fear for many people concerning themselves and their families. Fact is catch it early and the prognosis for most forms is better than most people are aware of. Trouble is we are all so scared of the "big C" that we don't take an interest until it touches us personally.
PS. Eat your greens.
6. tommyweaves said...
More delusional nonsense, and yet another article suggesting that high house prices are good. I wish I could sell these people my car; I paid £17k for it in 2005, I reckon it's still worth that now. (Not that I'm suggesting houses depreciate the same way, but you get my point!)
Is there a way to search the news archive from the last crash to find similar nonsense from 1991 or 1992?
7. crunchy said...
3. icarus... Brilliant!
That's a new one on me.
Very fitting!
8. letthemfall said...
There are databases to search old articles, though might be hard to find one with free access. A while ago I looked through headlines from the early 90s and there were indeed plenty of propping-up headlines, as you'd expect, although I wonder if they are more excitable this time - even more money riding on high prices than in the last boom.
9. Sneaker said...
Do the 600k US workers losing their job EVERY MONTH think the worst is over? Maybe, once you lose your job and your house, you have nothing left to lose.
The amazing wave of optimistic commentary sweeping our newspapers, based on no serious awareness of the economic data let alone economic reality, sounds like the top of a bear market rally. How many journalists writing these articles have lost their jobs and therefore know what it's really like out there? Clearly none, otherwise they wouldn't be writing such delusional nonsense.
10. sneaker said...
Do the 600k US workers losing their job EVERY MONTH think the worst is over? Maybe, once you lose your job and your house, you have nothing left to lose.
The amazing wave of optimistic commentary sweeping our newspapers, based on no serious awareness of the economic data let alone economic reality, sounds like the top of a bear market rally. How many journalists writing these articles have lost their jobs and therefore know what it's really like out there? Clearly none, otherwise they wouldn't be writing such delusional nonsense.
11. alan said...
At first sight, things may look rosy (great post, Icarus). Most businesses are still running at a profit, folk are getting paid.
Have we so quickly forgotten the low BoE Interest Rate? Mortgage rates have traditionally been much higher. It is only because of banking/credit crunch problems that they are down to their lowest in my memory.
When they go up again, this thin revival of interest in buying houses will be extinguised. I have noted that few journalists have raised this point in their property ramping articles.
Sovereigns traded at £146 each, yesterday (as scrap @ £140). Buying some would be a useful insurance policy. I see gold going to $1250 in under a year.
12. quiet guy said...
We have followed closely and cheered Nationwide's HPI on the way down. Now Nationwide have presented evidence of an uptick. I don't think we should just dismiss data because it doesn't fit our wishes.
So am I saying that I think prices may be about to recover? No.
There are two main things that bother me about this apparent bounce: unemployment figures and interest rates. The idea of rising house prices and unemplyment at the same time seems really odd unless there are legions of cash rich investors snapping up properties. Interest rates are at ridiculously low levels that are artificial and not based upon free market economics. The BoE has indicated that it intends to keep interest rates at these low rates for at least the next year so I assume rates will stay put until next summer but keeping rates at their current level in the long term looks rather difficult. I'd be rather nervous of betting on cheap mortgages for years to come.
13. quiet guy said...
@alan
"I see gold going to $1250 in under a year."
You could be right but I'd suggest that any metal speculators keep in mid the possibility that gold will form its own bubble in much the same way that dotcom shares and property has in the past. Getting in to gold is pretty easy. Deciding when to get out may be a lot harder.
14. Fallingbuzzard said...
tommyweaves, I think there was a good set of articles on here not long ago about the newspaper stories during the 90s crash. they called a housing market recovery in 1990, 1991 and 1992. oops
15. peter_2008 said...
The fact that the press is so desparate clinging on one or two months fracturation and pretty much everyone is completly ignoring the basic of the analysing statistics is actually exactly what convinces me that the worst is yet to come.
A surge of greenshots? Many positive reports?
Don't you see, these green shots and positive reports are basically a duplication of one same data? It is basically a reflection of the increase in lending activity in March (back by printed money). All 5000 positive spins are basically about ONE single green shot. How pathetic is that?
It is like 10 EAs working in the same office saw ONE property sold at 5% above asking price. Each of them then go out and tell 10 other people what happened. And by the time it gets to press, the headline will be "One hundred houses heard sold over asking price." GB used this trick again and again to present ONE old good news over 200 times to make it sound like 200 good news.
A bull trap happens when people ignore the elephane in the room. In this case, there are actually at least three or four elephants in the room and people yet choose not to see them.
16. last_days_of_disco said...
Is an elephane a really big elephant, say as big as an aeroplane?
Just back from Luton town centre, Socialist Worker Party baiting. They explained to me they follow Trotsky not Stalin. Well that's all right then, he was a slightly less prolific murdering so and so. Mainly because he was topped off before he could really get going...
17. Safedisk2008 said...
The UK will not recover until the US is well on the way to recovery.
When I saw the American housing market go down the toilet in 2006/early 2007, I knew that it was only a matter of time until the UK followed suit. The UK is a mini-me version of the US with practically the same problems.
We put our house on the market in July 2007 (just too late), it took us 13 months to sell from that time.
If the housing market in england is to recover then we have to look across the Atlantic to see what is going on over there.
Anyone who thinks we can recover independently, needs their head examining.
18. paranoia blue said...
Re: Roses.
Remember that if you can smell them, horse manure is near at hand.
19. icarus said...
Thanks paul & crunchy......crunchy loves the one-liners.
20. This comment has been removed as it was found to be in breach of our Blog Policies.
21. crunchy said...
Rumbled by the Tricarusaurus : ) .........................................................................
22. crunchy said...
http://www.zbrushcentral.com/zbc/showthread.php?t=36654
16. icarus. How the heck do you type? Only joking!
23. tenyearstogetmymoneyback said...
tommyweaves @ 6 said "Is there a way to search the news archive from the last crash to find similar nonsense from 1991 or 1992?"
I think that the internet was limited to Nerds in Universities back then.
Funnily enough I don't remember any nonsense back then, although because I was a Homeowner (with diminishing equity)
back then I wasn't looking for it.
Instead we got programs like this
http://www.bbc.co.uk/bristol/content/articles/2007/09/06/bradleystoke_video_feature.shtml
have a look at the Home Truths one at the bottom. Some of it was filmed in a road where a friend lived.
A big nonsense back in the late 1980s was the ending of Joint Tax Relief. People honestly believed that if they din't buy a
house before the deadline they would never be able to afford one. A lot of those who hadn't bought before the deadline
simply stopped looking.
Thinking about Miras were there any rules (or were they just unwritten ones) to stop people Mewing ?
It would be a complete nonense to allow people to Mew a posh holiday and then get tax relief on it.
However, it never seemed to happen. Someone I know who did take equity out of their house
kept having to move each time they wanted to get at the money.
Of course back in the 1980s and 1990s most people bought a house because they wanted somewhere to live.
When I bought in 1986 the solicitor was very impressed that the property had gone up 7% in two years.
:- Duncan
A final comment. Beware of shared equity, probably the biggest nonsense from the 1980s
24. paranoia blue said...
http://bigpicture.typepad.com/comments/2006/11/19271933_chart_.html
25. p. doff said...
Tenyears. I seem to recall that you only qualified for Miras relief on the initial mortgage and not on any subsequent further advances.
26. tenyearstogetmymoneyback said...
p. doff @ 21
Thanks for the answer, which explains why MEWers had to keep moving house.
I have to admit that one of the reasons I moved in 1989 was that I had about £30000
equity in the house and about £500 left in savings. I bet lots of people woule love to be in that
position now.
:- Duncan