Jump to content
House Price Crash Forum
Sign in to follow this  
LuckyOne

Spring Bounce / Bull Trap / Bear Market Rally

Recommended Posts

Interesting article from Bloomberg. It is a pity that the graph didn't make it onto their internet version of the article.

http://www.bloomberg.com/apps/news?pid=206...id=a_YnClfaKdqs

By David Wilson

June 8 (Bloomberg) -- U.S. housing prices are in the midst of a decline that may last for years, according to Robert J. Shiller, a finance professor at Yale University.

Shiller, who helped create home-price indexes bearing his name, wrote in a New York Times story yesterday that declines in real estate tend to be relatively long-lasting. As an example, he mentioned land prices in Japan’s major cities, which fell for 15 straight years after a 1980s housing bubble burst.

The CHART OF THE DAY shows what happened in Japan, based on data compiled by the country’s Real Estate Institute. Prices in the Tokyo area and in five other cities -- Kobe, Kyoto, Nagoya, Osaka and Yokohama -- sank 76 percent from 1990 through 2005.

Less than three years have passed since the Standard & Poor’s/Case-Shiller indexes of U.S. home prices peaked. The S&P/ Case-Shiller national index has fallen 32 percent from a high in the second quarter of 2006, as depicted in the chart.

“Prices may continue to fall, or stagnate, in 2010 and 2011,†Shiller wrote.

Shiller’s article followed an estimate by T2 Partners LLC, a hedge fund, that the national index will hit bottom in mid- 2010 after dropping 40 percent to 50 percent from its high.

Indications that the housing market has stabilized look like “the mother of all head fakes,†Whitney Tilson and Glenn Tongue, co-founders of T2 and co-authors of the book “More Mortgage Meltdown,†wrote in a June 2 report.

(To save a copy of the chart, click here.)

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

Last Updated: June 8, 2009 11:08 EDT

We still have a long way to go. The fundamentals here are similar to Japan in a lot of ways. ZIRP and QE to start with .... We also have much higher unemployment, higher leverage and much lower savings which give us much less flexibility to ride out the storm.

The green shootists seem to think that this is all over. There is no way. We have a lot further to fall still.

Share this post


Link to post
Share on other sites
Interesting article from Bloomberg. It is a pity that the graph didn't make it onto their internet version of the article.

http://www.bloomberg.com/apps/news?pid=206...id=a_YnClfaKdqs

We still have a long way to go. The fundamentals here are similar to Japan in a lot of ways. ZIRP and QE to start with .... We also have much higher unemployment, higher leverage and much lower savings which give us much less flexibility to ride out the storm.

The green shootists seem to think that this is all over. There is no way. We have a lot further to fall still.

I know, but why are houses selling where I live for 2007 prices???

Share this post


Link to post
Share on other sites
I know, but why are houses selling where I live for 2007 prices???

Munimula said the same on another thread :blink:

Anyone else seeing a return to 2007 madness?

Share this post


Link to post
Share on other sites
Munimula said the same on another thread :blink:

Anyone else seeing a return to 2007 madness?

Not quite, but we are getting there.

It's an alternative universe as far as I'm concerned.

Share this post


Link to post
Share on other sites
Munimula said the same on another thread :blink:

Anyone else seeing a return to 2007 madness?

not even close. i reckon 20% down from peak, and the reductions keep coming. there is a small increase in STC / offer, but nothing to shout about, and nothing seasonally unusual

Share this post


Link to post
Share on other sites
Munimula said the same on another thread :blink:

Anyone else seeing a return to 2007 madness?

We have to remember the majority on HPC are very well informed and know the true state of the housing market but unfortunately we are in the minority , Joe Public out there are completly ignorant of the fundamentals of it all and are just brainwashed by the media who are currently telling the public that the market is stabilising , likely to go up and that now is a good time to buy .......sadly the majority believe this sh1t :angry:

Share this post


Link to post
Share on other sites
Munimula said the same on another thread :blink:

Anyone else seeing a return to 2007 madness?

Not 2007 prices, I'd guess 10% off but everything is now SSTC or under offer. The rate of sales as picked up but there is nothing new coming on.

I've been outbid on an ideal house that I could have paid asking price but I've let it slide. All the poor fundamentals are in place: debt, unemployment and demographics.

Back to waiting.....

On the postive side, I've got 2/3 probate houses to sell so this looks like a good window to shift them for the beneficiaries. I'll price them at 2004/5 levels and see what happens.

VMR.

Share this post


Link to post
Share on other sites
Because where you live people have more cash than brains?

Thats what it seems like to me. Although I will not overpay part of me wonders if there is just enough people with more cash than brains to keep this going indefinately.

Share this post


Link to post
Share on other sites
Guest An Bearin Bui
Munimula said the same on another thread :blink:

Anyone else seeing a return to 2007 madness?

Nothing's selling where I am (posh, Denial Capital of the World, Edinburgh). There are forests of For Sale signs in the less salubrious areas of the city and they've been up for months. You see the occasional 'Under Offer' or 'Sold SSTC' sign but it really is the exception rather than the norm. Everything on my usual route to work and in my neighbourhood is still for sale, and most of it has been for months now.

Anything that is selling tends to be 1 or 2 bed flats in good areas selling at about 15-20% off peak. That's not to say that it's a buyers' market or anything though. Most sellers are still in denial so there aren't that many bargains to be had. One place near me is a 2-bed that was put on the market for 335k nearly a year ago (still 10% off peak price of potentially 370k). It's still for sale now and has been reduced to 310k, which amounts to nearly 20% off peak (i.e. insane) 2007 prices. It's still not selling though and I never see anyone viewing it. Some places like it are selling but generally for about 285k. If it ever does sell for the current asking price then that's when I'll start to worry...!

Share this post


Link to post
Share on other sites
I know, but why are houses selling where I live for 2007 prices???

Because people can survive with for a couple of years holding back discretionary selling. As time goes on more people will have to sell and the supplies of Bulls with cash will dry up (anyone who buys now is by definition a Bull). The economy is bleeding money and it will continue to do so for several years as tax rises, wage cuts and unemployment takes its toll.

Remember, its a cumulative effect. Be patient.

Share this post


Link to post
Share on other sites
Because people can survive with for a couple of years holding back discretionary selling. As time goes on more people will have to sell and the supplies of Bulls with cash will dry up (anyone who buys now is by definition a Bull). The economy is bleeding money and it will continue to do so for several years as tax rises, wage cuts and unemployment takes its toll.

Remember, its a cumulative effect. Be patient.

Its a combination of people who have sold and are sitting on cash, thinking they don't want to get no interest. And believing that its not going down by much. And a limited supply of the right sort of property.

Share this post


Link to post
Share on other sites
Anyone else seeing a return to 2007 madness?

The really nice stuff seems to be shifting at 10%-20% off, the rest appears to be almost entirely random, with a good amount that's in the "several years" time on market pile, and a whole load that appears to have been withdrawn from sale.

What's surprising me at the moment is the rate of turnover of the really nice stuff (4+ bed, often unique properties, quiet rural area, commutable), not so much because people are buying (it's a very cash-buyer centric market), but because so many people in that sort of house are selling at the same time. They're the sort of properties that came up once in a blue moon prior to '07, the sort of thing someone who'd done pretty bloody well for themselves would buy in their forties and keep for thirty years, but for whatever reason a hell of a lot of 'em are electing to get the hell out of it at the moment. Your guess is as good as mine...

Share this post


Link to post
Share on other sites
First bull to explain why those graphs above don't apply to the UK gets to take me out for dinner!*

*Tired, worn out old clichés only - no original thinking please!

Er, because we have our own graph that looks different? Although the Japan one shows they are on the upturn having reached bottom I see no reason that would apply to us specifically. It may turn out to be coincidental.

I could just as easily post a graph of UK milk prices and say why doesn't that apply to house prices.

Share this post


Link to post
Share on other sites

He's right you know, the UK's graph will look different from Japan's.

(the x-axis will go from 2007 to 2020 instead of 1990 to 2005).

Edit: clarified

Edited by bearly legal

Share this post


Link to post
Share on other sites
I know, but why are houses selling where I live for 2007 prices???

Selling or asking?

I ask because Rightmove prices versus actual sale (LR) or mortgage (HF NW, SA and NSA) look like this:

Picture_1.jpg

which basically shows the correlation between the average on Rightmove and the average on everywhere else. Unless the average quality of house on rightmove got worse before the peak and better after, I think we can say this indicates a touch of overvaluing on the RM asking prices.

post-13003-1244552171_thumb.jpg

Share this post


Link to post
Share on other sites
Selling or asking?

I ask because Rightmove prices versus actual sale (LR) or mortgage (HF NW, SA and NSA) look like this:

Picture_1.jpg

which basically shows the correlation between the average on Rightmove and the average on everywhere else. Unless the average quality of house on rightmove got worse before the peak and better after, I think we can say this indicates a touch of overvaluing on the RM asking prices.

Until a couple of weeks ago I thought just asking, as nothing selling.

But now stuff seems to be selling as these stupid prices - friend went to see house and it was already under offer in first week at 2007 price - in excess of asking!!!!

Share this post


Link to post
Share on other sites
Until a couple of weeks ago I thought just asking, as nothing selling.

But now stuff seems to be selling as these stupid prices - friend went to see house and it was already under offer in first week at 2007 price - in excess of asking!!!!

There's gonna be a hell of a spike in the HF and NW indices next month if that's borne out across the sector!! It's going to require about 20% MoM!!!

:o:o

Interesting to see if the mortgage goes through though.

Share this post


Link to post
Share on other sites
There's gonna be a hell of a spike in the HF and NW indices next month if that's borne out across the sector!! It's going to require about 20% MoM!!!

:o:o

Interesting to see if the mortgage goes through though.

Unlikely - I suspect that these purchases are top end only being bought by those with cash or very decent deposits, there isn't enough money for it to be borne out across the sector. For that reason don't think mortgages will be a problem.

Share this post


Link to post
Share on other sites
Er, because we have our own graph that looks different? Although the Japan one shows they are on the upturn having reached bottom I see no reason that would apply to us specifically. It may turn out to be coincidental.

I could just as easily post a graph of UK milk prices and say why doesn't that apply to house prices.

milk prices????

eh????

is it just me, or has the quality of troll on this board fallen off a cliff recently?

Share this post


Link to post
Share on other sites
Er, because we have our own graph that looks different? Although the Japan one shows they are on the upturn having reached bottom I see no reason that would apply to us specifically. It may turn out to be coincidental.

I could just as easily post a graph of UK milk prices and say why doesn't that apply to house prices.

But I thought it was a global crisis and it all started with those pesky American poor. Oh well, looks like we can have our cake and eat it. Hurrah!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   285 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.