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

Massive Lag In House Price Falls Explained...a Theory

Recommended Posts

This is a theory built on an anecdote so hear me out whilst I pontificate.

The place I nearly bought had a price agreed on it in January 2005. It was on the market for £270k and finally sold for £265k (we offered £250k).

It then took 6 months for it to complete. (deal closed in July 05)

It then took a further 2 months for this to appear on the Land Registry.

In this example it has taken almost 9 months for the agreed fee to become publically known fact.

Imagine if this was typical of a lot of properties. It would mean that we wont see falls for 6-12 months after they happen and the market will be suitably delayed in its reaction.

Share this post


Link to post
Share on other sites

This is a theory built on an anecdote so hear me out whilst I pontificate.

The place I nearly bought had a price agreed on it in January 2005. It was on the market for £270k and finally sold for £265k (we offered £250k).

It then took 6 months for it to complete. (deal closed in July 05)

It then took a further 2 months for this to appear on the Land Registry.

In this example it has taken almost 9 months for the agreed fee to become publically known fact.

Imagine if this was typical of a lot of properties. It would mean that we wont see falls for 6-12 months after they happen and the market will be suitably delayed in its reaction.

And meanwhile you would have 6-12 months of conflicting news and spin about the market as we do have now. Perfectly feasible to me.

Share this post


Link to post
Share on other sites

This is a theory built on an anecdote so hear me out whilst I pontificate.

The place I nearly bought had a price agreed on it in January 2005. It was on the market for £270k and finally sold for £265k (we offered £250k).

It then took 6 months for it to complete. (deal closed in July 05)

It then took a further 2 months for this to appear on the Land Registry.

In this example it has taken almost 9 months for the agreed fee to become publically known fact.

Imagine if this was typical of a lot of properties. It would mean that we wont see falls for 6-12 months after they happen and the market will be suitably delayed in its reaction.

All this lag is just is effectively stored up HPC energy...should keep the HPC gong an extra 6 months when it comes out the bottom. Just shows how important it is to keep plugged into rightmove and listen to the annecdotals when it comes to getting the time to buy right.

Share this post


Link to post
Share on other sites

It will mean the crash will be happening but the reporting of it will be 6-9months behind.

But it is that very reporting which will exacerbate the crash or relieve it.

Given this logic, the sort of falls being currently negotiated (8%ish round my neck of the woods) will not be reported until March or so next year.

Riding on that train of thought I'm thinking prices will continue to slow for the next 4 or 5 months but prices will fall at their heaviest in the 2nd, 3rd and 4th quarters of next year.

Bring on 2007!

Share this post


Link to post
Share on other sites

Spot on. I have had a similar theory bouncing around in my mind too and you have crystallised it.

Although my refinement of this is that one should note that it will work in reverse too - so published data for any rebound (or eventual crash recovery) will lag the reality - by the time the press really pick up on/accept it (the falls or increases) and joe bloggs sells or buys on the back of that you are 18 months to 2yrs in to it (the crash or boom) and miss the bottom or top. Which is why one should be happy to buy at historic trend prices.

Share this post


Link to post
Share on other sites

Okay...

My therory is.. (I think its a good one...)

the average house in boom times is a smaller property then in more difficult times..

house prices vary by hundreds of thousands now...

the average selling price does not reflect the average house price in any way. it relfects the average value of the houses that are selling..

Down my way I see a lot of empty two bed flats. and they were selling like hot cakes a year or so ago..

in the sam vain these properties are discounted (new build) from £170,000 to £130,000..

The crash is happening.. its here...

look at it this way.

if 30 one bed flats sell for £130,000 one month the average price is £130,000...

then the next month the market goes very weird and only one castle sells for £3,000,000 the average price is £3,000,000

The average house price is only indicitive of trends if you know what like for like sales are making.

otherwise its rubbish.

Share this post


Link to post
Share on other sites
Dam that Girlie Grapevine, you'll bring down the whole economy!

Never underestimate it. One minute M&S is selling more knickers, little black dresses and knee length boots than it can keep up with. The next, they are making hundreds of millions of pounds in losses. Girlie grapevine. Ignore it at your peril.

In fact, all fifth form males should be taught this.

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.

  • 302 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.