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

Explaining House Prices

Recommended Posts

Nice chart.

I see 3 horsemen of the apocalypse in the middle and the 4th just being made.

Share this post


Link to post
Share on other sites

This was the sort of thing I heard over and over in the late 90s as an excuse for the bubble in stock prices. I can't recall the number of times I heard some very highly paid economist or analyst saying that we would never have another recession (this was in the US).

Share this post


Link to post
Share on other sites

It has been suggested that low volatility in numreous macro economic indicators propelled asset prices like house prices to BUBBLE levels. Here is chart that supports the argument. Also see full article http://wp.me/pTU04-3t

volatility.jpg

yes interesting chart but you are confusing cause and effect. HPI and high volatility were both caused by the same underlying factors. in fact looking at the graph one can equally make the case that HPI caused high volatility.

Share this post


Link to post
Share on other sites

yes interesting chart but you are confusing cause and effect. HPI and high volatility were both caused by the same underlying factors. in fact looking at the graph one can equally make the case that HPI caused high volatility.

Looking at the volatility of RPI and volatility of HPI , the house price volatility appears to lead that of inflation. But if you look interest rate and GDP volatility they may lead. My argument is the volatility in of the general economy measured by various macro indicators has declined over time to historical lows. Consequently this may have resulted in incorrect assessment of risk/ low risk aversion.

Share this post


Link to post
Share on other sites

Looking at the volatility of RPI and volatility of HPI , the house price volatility appears to lead that of inflation. But if you look interest rate and GDP volatility they may lead. My argument is the volatility in of the general economy measured by various macro indicators has declined over time to historical lows. Consequently this may have resulted in incorrect assessment of risk/ low risk aversion.

People spend excess credit on the safe things first...ie what the money was lent on....that would be housing....NEXT comes the MEW and spend on other things.

hence price inflation FOLLOWS monetary expansion of credit.

ALWAYS..the first recipients of excess money supply are the ones to benefit....thats one reason that inflation DOES NOT pay of an excess of credit and cure the problem of overspend to maintain an economy.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

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.