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Timm

Rics House Price Balance

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Trending up isn't it. When you look at the chart back to 2007 you can clearly see the carnage of 2008. Not going to see that again without something changing.

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Your comment made me laugh but I presume that you don't understand what this survey is measuring.

It is a lagging indicator looking at the last 3 months. So the surveyors are saying that during the last 3 months, prices have been falling and if you believe the trend argument then they will probably continue to fall for 6/12 months or so. So when the balance figure is 0%, its neutral so you can then say that month on month falls have stopped and agents are saying that prices have been flat over the last 3 months.

What it doesn't capture is how much they are falling by, you can have a -31% reading with 1% per month falls and with 10% per month falls. No index will capture this, especially the official indices which report with such a lag that are next to meaningless in a volatile market.

Trending up isn't it. When you look at the chart back to 2007 you can clearly see the carnage of 2008. Not going to see that again without something changing.

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Your comment made me laugh but I presume that you don't understand what this survey is measuring.

It is a lagging indicator looking at the last 3 months. So the surveyors are saying that during the last 3 months, prices have been falling and if you believe the trend argument then they will probably continue to fall for 6/12 months or so. So when the balance figure is 0%, its neutral so you can then say that month on month falls have stopped and agents are saying that prices have been flat over the last 3 months.

What it doesn't capture is how much they are falling by, you can have a -31% reading with 1% per month falls and with 10% per month falls. No index will capture this, especially the official indices which report with such a lag that are next to meaningless in a volatile market.

Well it measures the amount of members seeing or not seeing falls right. You can't directly extrapolate the figures to the size of falls but there is a correlation shown by the monster falls of 2008 and the grinding falls of now. And by stating that it was trending up, i meant heading for 0% albeit slowly but heading in the wrong direction from a bearish prospective.

I can't find a chart of 2002 for RICS, but i reckon the monster rises show in their data.

Edited by neil324

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sales still falling and sales to unsold stock edging down further so it's not all bad news.

http://imarketnews.com/?q=node/26105

Average sales per surveyor fell to 14.6 from 15.2 in the January survey, hitting their lowest level since June 2009. On the supply side, the average number of properties on surveyors' books fell to 68.2 from 70.8.

The sales-to-stocks ratio, a measure of market slack, fell to 21.3% from 21.5%.

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This data does suggest that things will indeed be different from the last dip down.

This makes me wonder whether the falls of 18 months ago (while thoroughly welcome) were a case of too much too quickly. I read somewhere that the rate of decline then was one of the fastest seen in the housing market - enough for sellers to pull their properties and feed the deadcat bounce that resulted.

I'm left wondering what might have happened if prices had fallen at half the pace - would we have seen continuous 0.5% MoM falls since then that would now be expected (and seems to be the case in the US)?

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sales still falling and sales to unsold stock edging down further so it's not all bad news.

http://imarketnews.com/?q=node/26105

Indeed not.

From the Indie:

RICS also said there was a clear regional pattern emerging with London seeing a greater level of price resilience than the north of England and Midlands, where the market remains under greater pressure.

A balance of 59% of surveyors reported price falls in the East Midlands, compared to just 4% in London.

This suggests to me that since the Haliwide indices are showing similar falls from peak as to what they were last time around at this stage (ie around 6 months in), then those areas that are falling must be falling hard to bring the average down. And make no mistake even those areas currently more resilient will fall eventually.

BTW, it was still only around 50% reporting falls at this point last time (didn't hit 80-90% until late 2008) so not the end of the world.

Interestingly, the sales-to-stock ratio is similar to what it was late 2008 (when falls were at their peak last time around) and IIRC this is very closely correlated with falls.

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"If we all work together we can beat whatever comes through those gates" Maximus, "Gladiator"

If the VIs all work together and come out with consistent reports showing the market is NOT crashing they think they can turns things around. Pity for them that on the street carnage does not match their cheery "data."

We live in a very deceitful and corrupt nation where none can be trusted, least of all those with a heavy vested interest.

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Snippets from the comments:

Edward Gallimore FRICS, Edward Gallimore, Tenbury Wells, Worcestershire

Sellers must be realistic in their expectations.

Ryan Williams BSc FRICS, McCartneys LLP, Hay-on-Wye, Hereford

The weather killed December so January was bound to be better. Still too few buyers other than for one-off country houses. Far too many uncommitted vendors with very high asking prices, sitting and waiting. I'm not sure what they are waiting for, not the banks I hope.

Bryan Elphick FRICS, Elphick Estate Agents, Ashtead, Surrey

Few instructions other than death and divorce. Smattering of viewings, low activity levels and some agents insistence on high valuations to get instructions, perennial problem.

Clive Rutland FRICS, Rutland Chartered Surveyors, Southampton, Hampshire

The market has returned from the Christmas break in subdued mood but not as bad as we feared. There are a low but steady number of instructions at prices often lower than last year and with agreed sale prices well below asking prices. Deals are taking longer to get through especially where a mortgage is involved. Additional hurdles are often introduced late in the mortgage deal. Most people are sat on their hands.

(ROFL at this one)

David Boyden BSc MRICS, Boydens Colchester, Essex

Working hard for little gain.

Geoffrey Holden FRICS, Parsons Son & Basley, Brighton, East Sussex

Applicant enquiry levels increased towards the end of January. Offers coming in are at much lower levels than the asking price. Market appraisals increasing which should lead to much needed new instructions.

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This data does suggest that things will indeed be different from the last dip down.

This makes me wonder whether the falls of 18 months ago (while thoroughly welcome) were a case of too much too quickly. I read somewhere that the rate of decline then was one of the fastest seen in the housing market - enough for sellers to pull their properties and feed the deadcat bounce that resulted.

I'm left wondering what might have happened if prices had fallen at half the pace - would we have seen continuous 0.5% MoM falls since then that would now be expected (and seems to be the case in the US)?

That's the main point. 2008 was too volatile. Housing markets are defined by long range trends, as befits their naturally illiquid state. Leading indicators are showing quarter on quarter declines at a measured pace, and have done so for two quarters. The new trend has been established - DOWN. This will continue.

Though it might frustrate some, this is the way to a sustainable and stable market in the future. It takes time. A second short crash will only see more volatility and further speculation.

Patience needed.

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Apropos snippets from the comments:

Julian T J Owens, Arkwright Owens,

Hereford, Herefordshire, - Lack of supply, positive for prices,negative for climbing the property ladder. Shortage of rental properties

will mean demand will maintain prices for lower priced property. Interest rates,if they go up - more expensive to borrow money.

I would question how representative the RICS surveyors are to give any sort of perspective on the market. As a good example the company above only ever has about 5 properties for sale and until very recently (and still do as far as I know) only undertake commercial surveys in the West Midlands and South Wales. In my opinion they cannot accurately know how the market is functioning.

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Commentary and chart from ICAP:

'The RICS survey surprised to the upside again in January and has now sharply arrested its recent downward trend – although at levels that still signal falling house prices to come. The chart below shows the RICS survey balance lagged by 6-months against the Halifax and Nationwide indexes'.

Haven't seen an updated one of those for a while! According to that we should see -10% yoy haliwide in around three months time. And the recent uptick in haliwide actually corresponds with the uptick in RICS 6 months ago. So in theory we should see prices rebound slightly in about 5 or six months. I do think that the latest increase of RICS is massively too steep though! It's vertical, not like that on the RICS survey.

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  • 312 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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