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House Prices Below Trendline On H P C Front Page....


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HOLA441
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HOLA443

For the first time since I started visiting this site about 5 years ago, the real house prices are shown below the (exponential, and hence BS) trendline.

This is clearly good news, but we all know reasons why it's nonsense.

Comments...?

(hope this hasn't already been posted)

It is certainly nonsense in local markets. In central Brighton, since Jan 2008 I'd say there has been about a 7% increase.

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It is certainly nonsense in local markets. In central Brighton, since Jan 2008 I'd say there has been about a 7% increase.

I live 5 miles East of Brighton and would estimate prices down about 12-15%. I track quite a few and am now seeing 5 figure drops whereas throughout the latter half of 2010 it was 3%-5% drops on £250k properties.

Brighton is apparently the most expensive city in the world with a 12:1 price to earnings ratio. Much due to government subsidies as Brighton is also the third largest city dependent on government money (behind Oxbridge). When the crash gets underway in a big way we will see a wipe out in this area.

I am considering making an offer on a property that peaked at £300k in 2008 and the comps show 2004 prices at £200k and I plan to pitch in an offer at £190k. They were asking £250k earlier in the summer and then dropped to £225k before Crimbo. EAs say the market is dead here and sellers must face up the fact that 2011 is not going to be a good year.

Edited by Realistbear
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HOLA447

There will be a long period of time below the trendline to cancel out the long period of time above it, which will bring the trendline back to its long term average. Prices are still massively above where the trendline would be if the housing bubble hadn't taken place.

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HOLA4410

There will be a long period of time below the trendline to cancel out the long period of time above it, which will bring the trendline back to its long term average. Prices are still massively above where the trendline would be if the housing bubble hadn't taken place.

Yes, as others and I have written before, the trend line reflects the present bubble which is why it has such a steep gradient. As prices level off and then fall the new figures will drag down the right side of the line so that it reflects long term trend better. It will flatten out as the bubble deflates. It is, I believe, simply the line of closest fit to the graph.
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HOLA4411

For the first time since I started visiting this site about 5 years ago, the real house prices are shown below the (exponential, and hence BS) trendline.

This is clearly good news, but we all know reasons why it's nonsense.

Comments...?

(hope this hasn't already been posted)

Well done pointing this thing up.

That "trend line" is just stupid. As it includes the bubble, it is also inflated of course.

The Forum should change that to something more sensible, like comparing HP with average income, for instance.

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HOLA4412

Well done pointing this thing up.

That "trend line" is just stupid. As it includes the bubble, it is also inflated of course.

The Forum should change that to something more sensible, like comparing HP with average income, for instance.

Agreed.

Mods, webmaster, whoever...

GET THAT BL00DY STUPID GRAPH OFF THE FRONT PAGE.

Even the BBC wouldn't use it.

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HPs.JPG

Trend lines are daft. I've knocked up what the trend would be for 3 scenarios over the next 5 years.

1 is 2% falls per quarter,

2 is no falls/no rises and

3 is 1% falls per quarter

You have to ask the questions of an exponential fit to this data... how often is it actually anywhere near the real data (ie. minimised residuals the sign of a good fit) and how much effect does a few more years of data actually have on the line (not a lot).

post-7266-0-05469100-1295182560_thumb.jpg

Edited by Buy Toilet
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HOLA4417

Where I live, vendors are asking 50% prices than similar properties sold for at the height, so an average price trend line is a bit inaccurate. A better guide would be affordability to average wage as people are mortgaged beyond their means.

However when rates go up I feel that this area (WD6) will be badly effected as most mortgaged owners are on interest only and can barely afford current payments. All the people I know around here are maxed out on debt and say that if rates hit 3% or 4%, they couldn't afford their mortgages, and that is on interest only !!!

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