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quantinghome

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Everything posted by quantinghome

  1. Well it's finally happened. After 10 years renting we've sold out and bought a place. The timing is mainly due to our dropping another sprog in a few months, and the fact that renting is no longer a particularly attractive option. With the deposit we've saved up over the years we're in a position where our mortgage interest is appreciably lower than the rent. The market round here (NW Leeds) has some way still to fall I believe, judging from P-E ratios. Ex-council houses are seeing quite major falls, however in general houses with asking prices set a little more keenly are going fairly quickly. It's an odd situation; my guess is that we'll see a further gradual decline over several years as I can't see where the money's going to come from to start another boom. Well, it's been a fun few years on HPC. I've probably spent too much time on here, but it's been a great source of information and advice, especially when we were swimming against the tide. I think a fair few people have been saved from making bad financial decisions as a result. It's just a pity they weren't bankers or the government. I guess I'll not be on here as much, but I'll still keep checking up on y'all now and again. quantinghome
  2. Watched this today as I'm ill. Made me determined to get better as soon as possible. I liked the ending - they've tripled viewings!!!! but no mention of it being sold...
  3. Can't see any reason for 62,000 having much significance. Approvals were running at around 80,000 to 100,000 when prices started falling. One would expect similar levels of approvals for them to start increasing again. In addition falling prices have an obvious negative effect on sentiment, so you may need higher approval levels just to get back to zero growth. Of course none of us knows the future, and if a recovery does come later this year, this will be seen as the start. However, it's hard to envisage where the recovery is going to come from. Unemployment is only just getting going, overall debt is still increasing and banks are still in a mess or demanding large deposits. Interest rates can't go much lower; in the medium term I would expect them to rise. The only way the housing market can get back on its feet is for affordability (i.e. the price/earnings ratio) to return to its long term range of 3.5 to 4 (the last crash it ended up below 3). Currently it's around 5. There's no sign of significant wage inflation, so it looks like house prices will be coming down. In my neck of the woods we're seeing asking price reductions of £10,000 plus on top of reductions already made. A year ago you'd see the occasional £2,000 or £5,000 reduction. This is across the board from ex-council houses, through suburbia to big detached places in sought-after school catchments. The Estate Agents we've spoken to this week sounded... philosophical.
  4. I used to be suspicious of seasonal adjustments, but after some research I found Nationwide, HBOS and BoE stats are all adjusted using pretty sensible methods. I do my own seasonal adjustment for the house prices stats and they follow the official numbers closely enough. Mortgage approvals have a very strong seasonal trend, so seasonal adjustment is important. It also takes account of the number of working days in a given month, which is why the adjustment for each month can vary from year to year.
  5. Absolutely! We need to be consistent. I keep track of the major data sources and put them together on a graph. To avoid doubts about the bank's SA methods I use my own SA calculation, but generally I don't have a problem with the banks' SA data. Forecasting the bottom is a tricky business. The last trough was very flat, so difficult to predict when the turnaround was going to happen. Mortgage approvals numbers are a good predictor up to 6 months ahead - any further ahead is difficult. Anyway, I'm not looking for the absolute bottom. I will start serious house-hunting when affordability returns to sane levels (3-4 times average income), falls in price are sufficiently small for other considerations to outweigh them, and when mortgage approvals return to normal.
  6. All the data sources will have random noise in them. All that's needed is to look at the trend, rather than one month in isolation.
  7. Exactly, which is why the SA increases the drop. There do seem to be far fewer complaints about seasonal adjustment when it's in our favour.
  8. Who knows? Jan-Apr 2008 were reasonably constant, then look what happened.
  9. NSA -0.4%. It's a good job that we HPCers prefer the seasonally-adjusted figures...
  10. Only when the data's not telling you what you want to hear. Otherwise it's just fine
  11. These are approvals, not prices. Approvals are highly seasonal, much more so than prices, so you need to do a seasonal adjustment to get the true picture. Also they need to adjust for the number of working days in a month, which varies month to month, and year by year for the same month. I hope that makes sense....
  12. My monthly HPI stats only go back to '83; the BoE quarterly approvals data only to '87. I could interpolate the quarterly HPI stats I have for the 70s, but not right now I'm afraid!
  13. Year on year HPI tends to follow 6 months behind mortgage approvals data. I divide the BOE approvals data by total stock which gives a slightly better long term picture - as stock increases, you'd expect the average number of house sales to increase as well. I also use two other factors: 1. the affordability ratio - nationwide average house price / average wage 2. the average house price growth (or decline) over the past 30 months as a measure of future expectation. I then use multipliers on each of the three stats and add them together. Then I cheat and use Excel's solver function to achieve the best fit between the result and the actual HPI. So it's a bit arbitrary I guess, but gives a good approximation.
  14. I said on a previous thread I'd get my crash progress charts updated. A bit later than planned, here they are: Nominal price fall from peak: Given that last time round (1989-1995), there was (much) higher inflation, the nominal falls are much greater. However, once adjusted for inflation the Nationwide falls are rather similar. Halifax is different - last time the falls were more gradual, although the eventual drop was similar to Nationwide. The forward prediction on this graph is based on mortgage approvals correlation, with a bit of affordability and future price expectation thrown in for good measure. This is the latest HPI prediction, with comparison against Nationwide and Halifax figures. Note that the previous crash is the only time the prediction was way off. The current difference between predicted and actual HPI is within expectations.
  15. I'm not wanting to trivialise the past. On the contrary, I look at the terrible times we've gone through as a country in order to give current events some context. I think we are in danger of overstating how bad things are at the moment.
  16. This country has been through: The Black Death War of the Roses Civil War South Sea Bubble Napoleonic Wars World War I Great Depression World War II Get a grip folks.
  17. I'd imagine that Opel and Vauxhall are in better shape than the rest of GM. Less reliant on SUVs, no US healthcare costs nightmare. This is my guess as a complete outsider - anyone with better info care to comment?
  18. Apparently Japan operates an almost entirely cash economy. Hardly anyone has a credit card. If you order something online, it comes with an invoice which you pay for at your local shop.
  19. The DCLG figures could be added quite easily, but the data doesn't go back to the last crash, so no comparison can be made. I'll update the inflation adjusted graph too. The weird thing is that due to deflation, the nominal fall from peak may become greater than the inflation-adjusted one.
  20. Must say I agree with this. It levels the playing field, and closes the door on people falsely claiming a house is their PPR to avoid CGT when selling up.
  21. AFAIK, BoE approvals stats only go back to 1993, and BBA stats back to 1997.
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