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Joey Buttafueco Jr

Rics Numbers

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Stocks of homes on books is 60.1 compared to 56.9 last month

Number of homes sold is 15.1 comparted to 12.8 last month

So in absolute terms, the higher number of sales seems to be attracting a higher number of houses for sale.

In relative terms, the ratio of stock to sales is deteriorating from a buyer's perspective.

It looks like it will be a very close run thing as to whether we see an increase in sales generate enough additional supply to drive prices lower until we see a new price / volume equilibrium in the market.

Despite all the chatter at the moment, we are still not in a price volume equilibrium and something has to give. Either more buyers have to emerge or prices still have to fall.

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When will those in real financial trouble try and cash in?

If they all move to sell at the same time banking liquidity will be tested? Or will the circular nature of banking keep enough liquidity in the system?

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RICS bloke on radio this morning. Usual ramping until the end when whilst talking about banks needing to lend he said "maybe they have learnt their lesson and we haven't". I forgave him for the rest of the interview after that.

This seems to be a common wisdom that is very slowly entering everyone's thoughts.

Stephen Hester of RBS said pretty much the same thing recently on CNBC.

Prudence and value for money becoming a mainstream idea? Couldn't happen could it?

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-8.1% (expected -10%), up from a revised -17.6% (unrevised -18.1%)

However, according to the Indy a balance of surveyors now expect prices to rise over next 3 months.

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Martin on GMTV just now (MSE).

asked the question....why are rising food prices met with shock and horror and yet rising house prices are a good thing.

he went on to say more surveyors still expect a drop than a rise.

he says FTBS with less than 25% deposits still have very hard time to get finance (good)

the preceding film showed sellers delighted....one a seven bed house owner hasnt been able to sell, three viewings in months, saying it was great prices were going up....another blond in an estate agent said it was great things were moving again....

Martins advice: dont overstretch because nobody knows if we are in L shaped or W shaped situation.

My comment: the difficulty in FTBs getting mortgages are shown by the LTV figures getting higher with last months BoE results.

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When will those in real financial trouble try and cash in?

If they all move to sell at the same time banking liquidity will be tested? Or will the circular nature of banking keep enough liquidity in the system?

Just as soon as they can get rid of their tennants !!!!

The unplannedd lords have just missed the best selling season there will be for a decade.

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Just as soon as they can get rid of their tennants !!!!

The unplannedd lords have just missed the best selling season there will be for a decade.

Investment in property is long term. Anyone who bought recently will be prepared to wait ten years. Maybe less if things keep rising at their current rates.

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Investment in property is long term. Anyone who bought recently will be prepared to wait ten years. Maybe less if things keep rising at their current rates.

Nonsense. If they divorce, have a kid, get married, die, etc they will probably look to move.

Or are you saying that recent buyers will put their lives on hold until the housing market "recovers" to 2007 levels ?

You must be under 25yrs old with a thought process like that. :rolleyes:

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Investment in property is long term. Anyone who bought recently will be prepared to wait ten years. Maybe less if things keep rising at their current rates.

You are confusing investors with the unplanned landlords - people who rent out for a short period waiting for prices to "recover". My old landlord being one - they had a two year deal after which they would have to pay market rate. We were the first ever tenants they had ever had and they had bought (interest only) to be nearer an ageing relative. Unable to get what they wanted for the house they rented it out.

That two years is nearly up now and house prices are down still 15% from when we moved in. I don't know if it is still rented out to our replacement - she wanted to live there (near her kids' school and friends).

I know what they paid for the second house (on nethouseprice.co.uk) and I would say they are up to the wire. If interest rates went to 6-7% I am sure they would be forced to sell at a big loss. I would assume (not being an expert on housing law) the tenant would have some security of tenure and so the house would be sold with sitting tenant - traditionally that means a lower price than vacant possession.

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Investment in property is long term. Anyone who bought recently will be prepared to wait ten years. Maybe less if things keep rising at their current rates.

by "things", you mean unemployment, right?

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Thanks for the graphs Spline.

It's crystal clear what happens next.

Are you a god?

can I send you the Famous Bloo Loo predictor kit.....oh no, you already have one.

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Are you a god?

.

No Blo Lo, that's Mr Parry. :)

can I send you the Famous Bloo Loo predictor kit.....oh no, you already have one.

Yes, and it works fine. You should take yours back to the shop and demand a refund.

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Hi Spline,

Is there any correlation between the RICS house price balance graph and HPI?

Hi Willy Weasel

Broadly yes, you can compare the HPI here (this is YoY and QoQ on a lag-corrected time-line) across the indices and match it up against the RICS curves.

The sales-to-stock ratio behaves similarly to the BoE approvals when it comes to correlating against HPI, and arguably is slightly better than the raw BoE approvals on being relative to a supply side measure although it’s easy enough to modify the approvals in a similar way, see, for example, the house price predictor.

HPI roundup across the indices (YoY and QoQ annualised, shifted timeline)

6xvudj.png

Graphs from: http://www.houseprices.uk.net/graphs/

Edited by spline

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Thanks for the graphs Spline.

It's crystal clear what happens next.

Not sure if you, or indeed Spline, where hinting at the following rough and ready analysis:

rics090811b.jpg

(apologies for quality)

The Rics data shows a very pronounced cycle in the region of 2 to 2.5 years.

If the data is going to continue this pattern then the next 3-6 months are likely to be painful to bears as the Rics figures move into a new peak somewhere around +25%, to full media fanfare.

After that the fun kicks off again, where I am predicting a full 100% negative figure from Rics somewhere around November 2010.

Note that, if there really is a full scale recovery happening, then the Rics figures will need to continue up well up above +50% to come into line with previous peaks.

This would need an up swing of about 150% trough to peak.

While possible, this seems unlikely given that the largest previous upswing was about 100% (-50% to +50%) during the last phase of London/South-East silliness in 2005-2007.

While I think the current rebound is quite silly indeed, I don't think it will quite reach summer 07 levels of hyper-silliness.

I would be very interested if Spline or anybody else out there has any knowledge on where the two year cycle comes from? I can't think of any obvious reason. Possibly an interesting bit of behavioural economics research.

post-7856-1250012173_thumb.jpg

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Well, though I say so myself, my technical analysis from one year and one day ago wasn't half bad (see preceding post):

ricsjul10.jpg

full Rics report here:

http://www.rics.org/site/download_feed.aspx?fileID=7173&fileExtension=PDF

Full on crash speed resuming as of now, Rics is normally a very good forward indicator; check out the price expectations for the next 3 months, balance of negative 15% for London. All regions with a negative balance.

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Well, though I say so myself, my technical analysis from one year and one day ago wasn't half bad (see preceding post):

ricsjul10.jpg

full Rics report here:

http://www.rics.org/site/download_feed.aspx?fileID=7173&fileExtension=PDF

Full on crash speed resuming as of now, Rics is normally a very good forward indicator; check out the price expectations for the next 3 months, balance of negative 15% for London. All regions with a negative balance.

Shameless bump following latest Rics report:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=151018&st=0

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