lolacarrascal

Yes there are more people employed (just about) but the more pertinent question on this forum might be are more people able to afford to buy their own home as a consequence. The ONS data for June 2011 tells us that employment was up by just 0.1% on the quarter but that the earnings annual growth for total pay (including bonuses) was 1.8% for the 3 months to April 2011 compared with a year ago, down from 2.4% for the 3 months to March 2011. (The comparative excluding bonuses figures are 2.0% down from 2.1%) http://www.statistics.gov.uk/pdfdir/lmsuk0611.pdf With inflation running at 5.2% RPI, it looks to me as though a 0.1% increase in employment must have been largely wiped out by about a 3.2% reduction in over spending power of those actually employed as far as housing affordability is concerned. This podcast is also a helpful summary of the ONS data http://www.youtube.com/watch?v=MSDYYxTh2UM&feature=youtu.be Why the Halifax suggests that this might be a factor in recent improvements in price trends is not immediately clear to me. In fact a contrary view seems to have more merit upon initial consideration of the data.

Putting this into perspective, some of us were paying a mortgage when base rates were 15% from October 1989 to October 1990 - not easy. Imagine the decimation to house prices and society if the markets now decided to force rates in the UK to that level again. The catalyst back then that led to the spike seems like was a picnic compared to the financial mess most of the developed world is in now!

Re. employment, a read at this might answer your query http://www.telegraph.co.uk/finance/jobs/8577091/Why-is-unemployment-falling-but-claimant-count-rising.html

I suppose prices never stay exactly the same so 'moving sideways' is used for absolute correctness when there is a series of incremental ups and downs in price which just seem to cancel each other out over time. My guess you view the market in NI has having largely been 'moving sideways' for the past while or 'bouncing along' to use BVI speak.

I suppose that depends on how you choose to interpret the timescale and how long you think the cycle lasted. From memory there's a view that property cycles last about 17 years or thereabouts so I would tend to think of the 88 boom as being a bubble and subsequent crash in its own right. But I don't think supporters of the bubble life cycle would claim that we should always expect to see an exact fit of the theory to reality. At a minimum I think we should expect to see at least the general characteristics of the model being represented if the theory has any validity.

Probably most vividly demonstrated in the UU house price reports which I think you are usually fairly content with. Those who support bubble life cycle theory would see this little rally as a classic 'bull trap'. They also tend to discuss and relate price movements and trends to stages of the bubble theory. Most proponents would therefore suggest that we could be nearing or in the fear & capitulation stages - just waiting for a catalyst (take your pick of current doom & gloom economic factors) to start the next leg down. Personally I prefer this analysis to your own, but you should stick with your convictions if you are not persuaded. I'm not trying to make you happy, just trying to help you to understand why others might see it differently.

As far as I can see, there has been a clear shift in here to debating house prices and value by reference to RV (which we already know you don't put much faith in) rather than the peak. Most of the quarterly house price reports that I read generally lead with either yr/yr or Q/Q or even month/month price movements in an index rebased to 100 at some point in the past. Occasionally I see reference being made to the peak in the analysis given in these reports, often to provide emphasis in the narrative. Which report uses the % drop from peak as their main measure? I tried to explain why there is a view that the rate of price falls is increasing. The simple fact is that from the rally point reached in 2009, the data from the main indicies indicated that the rate of falls had again picked up over the past 12-18 months. Perhaps this trend will level out again, maybe a little spring bounce, only time will tell. But the recent trend in the rate of price movement had been down, not level nor flat nor bouncing along. You've disagreed without really explaining why so I will assume you just prefer your 40/6 two years way of looking at things as being a more positive outlook for someone with a vested interest to have. My last point was maybe too subtle, a tongue in cheek joke about making statistics say what you want them to.

Excellent advice. Welcome to the stressful world of house buying Sundance. The more you talk to EAs the more information you give them either intentionally or unintentionally about your position. As with most things in life, knowledge is power and you are just giving yours away for free. I know its not easy, but do yourself a favour and wait until the EA contacts you. This business about cash buyer Vs mortgage buyer is just the typical mind games being played to sow a little seed of doubt and its working. You need to start playing your own and make the EA think a bit about maybe losing a potential buyer. The other bid might exist or might not, but cash is king in the game we're playing now and bids conditional or mortgage approval aren't really worth a fig just now. Be strong Sundance, try not to let your emotions get in the way of rational decision making. There will be plenty of other houses, seriously, there's always another dream house to be found just when you didn't expect it. I know this from having bought several houses over almost 30 years, maybe bought our first one before you were even born. This will be a good experience to learn from.

Perhaps it suits the construction industry generally or maybe its sales patter to relate everything to the peak as a way of minimising to punters what's currently happening. Your message seems to be 'most of the big falls have already happened, what's to worry about another 4%/6%/8%/10% fall relative to the huge 40% fall just after the crash'. My feeling is that most people (and without a doubt everyone posting on this forum) now recognise the madness that the bubble was, the illogical state the market got it self into, the total unsustainable position of paying more for a flat at the top of the Belmont Road than on Seven Mile Beach in Grand Cayman. In looking for a reference point upon which to base opinions about where the market is now headed, I would suggest most people in the general population have moved beyond peak prices and 4 years later on, they are now getting back to thinking more about yr/yr changes (maybe even Q/Q movements) and comparison with pre bubble prices e.g Q1 2005. You also seem to have misinterpreted the view that I and others have expressed to the effect that price falls are again accelerating. This is not with reference to the peak of 4 years ago, but with reference to the far more recent (and arguably more relevant) trend now which has developed since prices reached their brief rally point in 2009 following the immediate low point after the crash. The peak has come and gone, to make sense of current prices we now need to relate them to a point in time when the housing market from top to bottom was operating effectively and in more normalised economic conditions. You're going to have to let the peak go sometime BVI or you run the risk of telling us soon that prices never fall, sure they're the same as they were 5 years ago

This one of the most relevant (to me) threads that have been posted for some time. Like a few others I've been watching the local detached market with interest. From what I have observed, the detached market had lagged but has shown increasing signs of prices coming down to more realistic levels and the unwinding of the property bubble across all house types and areas is now very evident, even if sales are still as scarce as hens teeth. (The analysis now pinned at the top of the NI forum provided empirical evidence of this). As I have previously suggested, unless there have been significant supply/demand changes over the past 10 years or so, I see no reason why all the rungs in the housing ladder with regard to both house type and geographical area should not eventually return to their relative positions in terms of % price differential. In general my view is there are just too many sellers hoping to get £250k plus for their standard 4 bed detached than there are buyers capable of raising the finance to purchase. At £500k plus, the number of potential buyers must be even more restricted, not many holding that amount of cash now you would think and what salary would you need to be on to get a mortgage for that amount? Yet £500k houses can be found for sale all over the province - who is going to be able to buy them? If anything, my guess would be that detached houses could be less affordable here than they were 10 years once all the props have been kicked away. It would be interesting to look at the ONS wages data to see if the distribution curve has widened or narrowed in the tails which might support such a view. So I think we are in for a slow but relentless drive down in detached asking prices until the relative market position on house types and locations are re-established. A catalyst, like rising interest rates or forbearance by the banks ending would likely bring about a more rapid re-alignment as many owners become confronted with the reality of their financial position. For anyone able to do so, my advice for what it's worth would be to sit it out for another while to see what happens, but as Doccyboy suggests, be ready to move immediately once an opportunity presents itself.

I know what your point is, but it cannot mathematically be expressed in the way that you did. You could say that from Q2 2007, prices had fallen by 40% by Q2 2009 and from Q2 2007 had fallen by 45% by Q2 2011 but it would be misleading (and mathematically incorrect) to split the falls into 40% for the 1st period and 5% for the 2nd period. To do so understates by 50% the actual reduction in prices over the past 2 years as recorded by Nationwide. That would be nearly all of a FTBer's 10% deposit (if they had managed to get a mortgage on this LTV) being wiped out and now approaching negative equity. Perhaps this explains your conveyed sentiment that prices are just bouncing along at the minute and why it's relevant to point out that it could be a misguided view on the rational presented. The reported increase of 1.7% is the quarterly increase in the seasonally adjusted index. The increase in price from £119,913 to £123,547 represents a 2.9% increase in the non-seasonally adjusted prices. Clearly the way the data is being presented is causing some confusion and I don't know why they mix-n-match on the same table without highlighting this more.

By my calculation, you have understated the falls in the Nationwide index from Q2 2009 to Q2 2011 by 50%.

I think you've hit the nail on the head regarding a different skill set needed now. What has surprised me most about EAs has been the total lack of effort made in even getting me interested in viewing a property. In almost 4 years of being on the database of the main EAs as a cash buyer, I've had only 1 telephone call and maybe 2 e-mails from them about property I might be interested in. You would think there was a queue outside their door of cash buyers wanting to buy any old tat that was for sale. None of their 'representatives' have even tried to build any sort of relationship with me as a potential buyer - maybe straight talking middle aged females who know what they want scare the hell out of them

I know Realistic EA has suggested otherwise, but I just don't think that the problem with unrealistic prices can be totally or even mostly the fault of EAs. Many on this forum may question their integrity at times, but I actually don't think most EAs are lemmings. Maybe some of the bigger ones were content to let the weakest of the competition go to the wall at the start of the crash but I'm guessing many would be very happy now to see prices drop significantly just to get the market moving again. They may have made loads-a-money in the boom period, but that was 4 years ago now. The coffers must be getting quite bare by now. I just don't see them cutting their nose off to spite their face in the way Realistic EA suggests.

I found this interesting. http://www.marketoracle.co.uk/Article28594.html I often noticed that once 1 or 2 houses dropped in price in an area, you could expect others to quickly follow. It was like a chain reaction, it just needed one realistic vendor to act as a catalyst. I think we will see more of this as new price ceilings become apparent, even to the most disillusioned.

I don't think your experience of only 6 sales over a 4 week period can be taken as representative of the wider market in Northern Ireland. The sample size is just too small and confined to just one area. I increasingly see signs of vendors becoming more realistic, evidenced by the consistently high number of price reductions each week which is more than at the same time last year. It also now seems clear that we have an ongoing correction in prices extending right across the market, from the bottom to the top, with the pace of house price falls picking up over recent months. Your prediction about base rates may well turn out to be case but I think we are in very volatile times globally and it seems to me that nothing can be predicted with any degree of confidence e.g. what would happen if the Greek bail-out gets messy. I would also suggest that in reality the bankers and economists that you speak with have no more influence or inside knowledge of where rates are going than most informed people, so I don't think you should be relying on their crystal ball any more than the many other economists often ready to give their 'expert' view in the press and media. So I think more vendors are getting the message and yes we might have some time to wait for a bottom - but most of us on here can wait or have no choice but to wait, either because of affordability or getting a mortgage or both. The question is how long can EAs continue to perpetuate a failing strategy regarding vendor expectations? It's seems a bit like lemmings throwing themselves off a cliff to me.

I don't know what normal EAs fees are exactly but for simplicity let's say it's 1%, so on a £200k house they would 'earn' commission of £2K. But in the current market would have to put in a lot of effort (more likely luck) to get a buyer at full asking price. If I understand your proposal correctly, they could offer it at 35% below valuation and maybe get it sold a lot more easily at £130k and still earn £1.8k commission, just £200 less than a normal contract. The nil commission price point for the EA seems to be £100k (again if I understand your proposal), in which case nearly every EA will have a contact somewhere willingly to buy at 50% discount, maybe for a wee £5k back hander? Are you really that motivated to sell? At the very least I think you need to set a minimum price at which you are prepared to sell. Personally, I think you give EAs too much credit for being able to make a sale happen. Most people on here will tell you will that the primary determinate in getting a sale is price and not how well any particular EA markets your property. My default position with regard to EAs (which I think many on here also share) is treat everything they say with at best suspicion, if not total disregard. The way things are at the minute, you don't need to pay more to get an EA to sell your house, there's no competition in this market for their 'professional' services. Keep it simple, reduce your asking price gradually to find the market price and you'll eventually get a buyer.

http://www.communities.gov.uk/documents/statistics/pdf/1921628.pdf Northern Ireland -15.2% fall yr/yr while RICS call the bottom?

PwC Northern Ireland Economic Outlook March 2011. Don't recall this being posted before. Amongst other issues, discusses the likely impact of public sector funding cuts to the NI economy. http://www.pwc.co.uk/ni/publications/nieo_mar_2011.html

Try more red wine for the discosex! But I think you're right, we need to watch the sample size for the next UU report. I think they overplayed the increase from Q4 2010 into Q1 2011. If Q2 2011 disappoints, then this current stalemate situation could radically change in favour of the bears.

Local rascal? - you taking the piss Shovelshite

OOps fupa again!

Mmmm....................... initially I wasn't sure I should even attempt a response to that one and now that I've tried I know I was right the first time. Personally at the moment I'm happy to sit back and see what happens as I'm probably more content than at any time over the past 2 years that the risks to house prices (in the market I'm interested in) are firmly to the downside for the immediate future. Of course that's just a personal opinion but it's one that's never been better informed through reading the type of economic and financial research often sourced on this site, and trying to keep an open mind. But just as important, my current circumstances allow me to tolerate a degree of 'unsettledness' that renting brings and I appreciate that others are not in the same position and will necessarily assign a different weighting to the many (often conflicting) considerations involved in deciding whether or when to buy a house. As for fair value, well there's no such thing in my view. In a seller's market, buyers pay more and in a buyer's market, sellers get less. That's just the way the market works. There's nothing 'fair' about the market price, it is what it is, depending on who is holding the better cards in the particular hand being played at the time. But bottom line, I find it hard to contemplate how house prices could ever rise against the current financial and economic backdrop which seems far from being stabilised in the near future. How low can they go? Only time will tell. Can I wait that long? Don't know.

Sure that's what I've been trying to tell you BVI and you wouldn't believe me

And the rest. Many thanks to all who expressed appreciation for this work. I hope it was as good for you as it was for me. However, I'm going to lie down in a darkened room now for a while!