Tuesday, Jun 30, 2009
Nationwide +0.9% for June
BBC: House prices 'rose 0.9% in June'
"What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standards", he added. Not really a trend reversal then is it.
Posted by phdinbubbles @ 07:27 AM (889 views) Add Comment
9 Comments
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1. quiet guy said...
There is a tendency among some on this blog to discount data that doesn't confirm what they want to hear. An extension to your quote from Nationwide's report:
"What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standards. Although it has risen from the all-time record low reached in November 2008, the industry-wide
number of mortgages approved for house purchases is still 55% below its long-run average and 33% below the trough reached in the 1990s downturn. Normally, such a low level of house purchases would be associated with falling house prices. Alongside the low level of mortgage approvals, however, there continues to be a relentless drop in the stock of property available for sale, as potential sellers and builders have responded to depressed demand conditions by reducing the supply of property coming onto the market. As a result, prices have been able to stabilise even in the face of very low demand."
Still, the graphs do show a trend change, for now at least.
http://www.nationwide.co.uk/hpi/historical/Jun_2009.pdf
2. mrflibble said...
House prices up... Sterling up.. Debt mountain up... Government still gambling with our futures... Feels like we are being fattened up for the kill...
For any Saw fans out there I think we will soon be hearing the words "game over, you loose" as the door is slammed shut and this housing market if left to rot... If you want out now then you are going to have to saw away at that ankle, i.e. reduce big time and get shot as quickly as possible...
3. Gmariner said...
Most people on here have been (accurately) pointing out that "demand" is only demand if people are willing AND able to pay for a house - suggesting that prices have a long way to fall. However, they often fail to point out that supply is only supply if people are willing to sell at these lower prices. It seems as though we have hit something of a floor as owners are simply not prepared to take any more of a loss. Predictions of another 20-40% drop seem very naive now.
4. davecrash said...
Also unemployment up ... industrial action up ... petrol up ... energy prices up ... food prices up.
It just doesn't make sense. I have a hunch its inflation, caused by doing silly things like printing money,.
5. 51ck-6-51x said...
"What is unusual about the recent trend reversal..."
Reversals often have associated increases in volume, and increased volumes certainly confirm the significance of any trend reversal, however...
There has been no trend reversal.
Not even since the global high of Oct-07!
By definition a trend reversal in a price series is made when the data series changes from ( to ) producing higher highs and higher lows [ 'increasing' ] to ( from ) producing lower highs and lower lows [ 'decreasing' ].
Intermediate periods [ 'non-trending' ] may also exist with a combination of highs and lows which meet neither previous sets of criteria ( e.g. widening, narrowing or stagnating ). Transitions from trending to non-trending are not reversals, but non-trending periods may be a part of a reversal e.g.: { increasing, non-trending, increasing, non-trending, decreasing } consists of a single reversal ( albeit protracted ).
The latest extremum was the low of Apr-09, which was higher than the previous low of Feb-09, the penultimate extremum was the high of Mar-09, which was lower than the previous high of Oct-07.
Therefore the series has confirmed the transition from increasing to non-trending as of Oct-07, but has not yet reversed to a confirmed decreasing trend, let alone reversed again.
Using the non-seasonally adjusted series the latest extremum was the low of Feb-09 which was lower than the previous low of Aug-07 and the penultimate extremum was the high of Oct-07 which was higher then the previous high of Jul-07, thus we have been non-trending since at least Jul-07.
- If they sampled more often there may have been a trend reversal ( or multiple reversals ), however they do not. It may be worth looking to a wage inflation adjusted measure for a clearer picture IMO.
6. Jayk said...
The crash is over. Live with it instead of complaining about people who pick and choose data.
By the way, I find it absolutely remarkable that anyone should complain about people here ignoring the data which indicates a continuing house price crisis, or continuing downward pressures, or temporary distortions showing misleadingly good figures, when ninety per cent of the time the bias is the other way round!!! Do you complain about the torrent of "40% crash coming!" and "Analyst XYZ says house prices doomed in 2010!" posts which show absolutely no balance either?
7. phdinbubbles said...
@666 erm, thanks for clearing that one up!
@quiet guy
My comment was a bit silly - a product of quickly posting something before rushing out to work this morning and quickly thinking of something to put in the comments box. I think what I was trying to convey was the sense in which the figures represent a distorted market based on low volumes rather than a sustainable recovery. That could be considered denial as well I suppose though!
8. mander said...
House prices are still falling but not as fast because of some actions taken in favour of banks and estate agents. But all this takes us to the point of no return where Dubai or America is right now and it will be for the next UK government to solve.
Volume of house sales is what matters being 55% down tells us that we are a few months away from disaster (that explains the intervention against young families like FTBs to save the inflated wealth of the elder who kave been wise enough and bought 2-3 properties)
We will get there when no one will believe one thing from the media. Time will come when people will be so disgusted that depression will seem to be the softest option.
9. 51ck-6-51x said...
Jayk
- I prefer sound logical analysis of available data and will happily point toward any fudging in either direction. I am sure I am biased slightly toward my own idea however.
I am also aware that one should expect bias one way or another in any report.
In a market trades are made and provide information on supply and demand; however in the realm of reporting this is not the case, rather a few vested interests with influence may transfer their views to Joe D Public from many seemingly different sources. This seems to be happening in the mainstream media with respect to the housing market
( How often have you seen a report that has a headline predicting house price falls compared with house price rises in the last two years? How far have house prices actually fallen in the same time? Really? Oh. )