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R I C S Sales To Stock Ratio Chart, But By Region Now

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R I C S Sales to Stock Ratio chart, but by Region now

Released 22 Dec 2010.

Edit to add source: http://www.rics.org/site/download_feed.aspx?fileID=8456&fileExtension=PDF

salestostockrics22dec20.png

The older chart below shows the correlation with house prices.

More up to date version of the chart above (thanks to XswampyX).

Note: In the late 80s there was a delay reaction on prices of about 6 months. But last year prices reacted much faster.

RicsSlack.gif

Source: RICS. Link to Source

Edited by Tired of Waiting

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R I C S Sales to Stock Ratio chart, but by Region now

Released 22 Dec 2010

salestostockrics22dec20.png

The chart below shows the correlation with house prices.

Bump!

Can't see the graph here (corp firewall blocks imageshack links for some reason).. can anyone give a hint, good, bad, flat.... ?

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I am confused.

Is this sales to stock ratio, or stock to sales ratio?

Looks to me as if it is trying to say that stocks are rising and sales falling? And that when that happens, price falls follow?

Is that about the measure of it?

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Thanks ToW.. that has bearfest written all over it.

Looks to me as if it is trying to say that stocks are rising and sales falling? And that when that happens, price falls follow?

Is that about the measure of it?

Yep, exactly that. Number of houses on books up.. number of sales down. Highly correlated with HPs :)

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I am confused.

Is this sales to stock ratio, or stock to sales ratio?

It is sales to stock.

Looks to me as if it is trying to say that stocks are rising and sales falling? And that when that happens, price falls follow?

Is that about the measure of it?

Exactly.

When sales to stock falls, the "merchandise start to pile up on the shelves"... What happens next?? :)

.

Edited by Tired of Waiting

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Thanks ToW.. that has bearfest written all over it.

You're welcome. / Yep!

Yep, exactly that. Number of houses on books up.. number of sales down. Highly correlated with HPs :)

:lol: We've just written virtually identical replies to leicestersq, including the emoticon.

Edited by Tired of Waiting

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It is sales to stock.

Exactly.

When sales to stock falls, the "merchandise start to pile up on the shelves"... What happens next?? :)

.

What a silly question - you know what happens next - sellers put the asking price up to try to shift the merchandise.

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Good ole pRICS. How about this for a gem of a quote in first para :

"prices (at a headline level) remain somewhat elevated..."

They just cant bring themselves to say "too high". Bless.

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Shame the graph covers such a long time period - bunches everything up. Would like to see something similar for the last five years.

I think the time frame is fine. It gives you a broad view, and we can see the 2007 and 2010 peaks in both charts.

.

Edited by Tired of Waiting

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(...) that has bearfest written all over it.

I think I just noticed one important point. This Halifax index they've used here is just nominal prices, right? Not adjusted for inflation, I think.It would look even worse if these were real prices.

RicsSlack.gif

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When sales to stock falls, the "merchandise start to pile up on the shelves"... What happens next?? :)

Remove the merchandise until Spring, when everything will suddenly and magically be better for selling...

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They decide to rent out instead? :lol::unsure: :angry:

They may well do that (assuming they are willing to put up with the hassle AND the bank will let them), but tbh if they are still living in la-la land pricing wise, then they're not active participants in the market so doesn't matter either way. Course this will drive rents down in the meantime so all good with me.

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  • Perhaps someone smarter than me can work out the average % margin of error of pRICs annual forecasts based on the following info (curtesy of this website) It looks to be a pretty large to me!
  • Prices rose 9% and 2% respectfully in 2006 and 2007 - RICS forecast was of 4% and 7%.
  • In 2008 prices dropped 13% - RICS forecast of 5%
  • In 2009 RICS forecast a 20% drop + later revised this to zero.
Edited by tennaval

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  • Perhaps someone smarter than me can work out the average % margin of error of pRICs annual forecasts based on the following info (curtesy of this website) It looks to be a pretty large to me!
  • Prices rose 9% and 2% respectfully in 2006 and 2007 - RICS forecast was of 4% and 7%.
  • In 2008 prices dropped 13% - RICS forecast of 5%
  • In 2009 RICS forecast a 20% drop + later revised this to zero.

I'm not good at statistics, but based on their track record here it would seem they employ the 'dart thrown at a dartboard' method of coming up with a figure...

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R I C S Sales to Stock Ratio chart, but by Region now

Released 22 Dec 2010.

Edit to add source: http://www.rics.org/...leExtension=PDF

salestostockrics22dec20.png

This would seem to indicate the rift between London and SE vs the rest of the country in terms of the post 2007 bounce. The London bounce now seems to be unwinding so we might expect a proper national 2nd downward leg.:rolleyes:

Sales to stock ratio lower than ~0.25-0.3 seems to generate nominal (better than "real") price falls based on the long term chart.

Every 0.1 above this seems to correlate with ~8% growth in Halifax index

Everywhere outside the SE is already below this 0.3 level and L&SE are heading downwardsand could be at the level after another 3-4 months of data (lets face it who is going to view/buy a house with the winter weather at the moment).

It could turn in to another bear fest as over the next few months as most of the indices will go negative y-o-y helping to reinforce the negative message before the 3-4 months are up.

The only thing I find surprising is that London is falling faster than SE but that may be because there aren't many FTB with the deposits to buy big houses in the SE -vs- exisitn sells who seems to have more equity and ability to get mortgages.

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This would seem to indicate the rift between London and SE vs the rest of the country in terms of the post 2007 bounce. The London bounce now seems to be unwinding so we might expect a proper national 2nd downward leg.:rolleyes:

Sales to stock ratio lower than ~0.25-0.3 seems to generate nominal (better than "real") price falls based on the long term chart.

Every 0.1 above this seems to correlate with ~8% growth in Halifax index

Everywhere outside the SE is already below this 0.3 level and L&SE are heading downwardsand could be at the level after another 3-4 months of data (lets face it who is going to view/buy a house with the winter weather at the moment).

It could turn in to another bear fest as over the next few months as most of the indices will go negative y-o-y helping to reinforce the negative message before the 3-4 months are up.

The only thing I find surprising is that London is falling faster than SE but that may be because there aren't many FTB with the deposits to buy big houses in the SE -vs- exisitn sells who seems to have more equity and ability to get mortgages.

Very good analyses. :)

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Thanks, it was only quick and dirty analysis, I'd love to get my mits on the actual raw data to do some proper analysis.

There is a bit of a rate of change effect going on as well.

RICS use nationwide for some of their charts now instead of halifax and idea if this anything to do with the slightly weird behaviour of halifax index since it became part of LBG? (i.e. Have the LTSB mortgages now got included into the the halifax index?)

Very good analyses. :)

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  • 284 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%



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