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hubba_bubba

Odd But Interesting Chart From Hbos Stats

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I've just compiled this chart from the latest HBOS stats.

HBOS_Spread.JPG

It shows the spread between the average FOO prices and FTB prices from their monthly series. The "spread" is calculated by dividing the std price for FOOs by the std price for FTBs. You'll see that this figure hovers pretty reliably around the 1.6 mark apart from certain times.

Right now it is nosediving like it never has before. Not really the result I was expecting as it suggests that FOOs are leading the crash not the FTBs as you would expect. What's interesting from a bear's perspective is that the only other time this metric deviated from 1.6 was in (you guessed it) 1989.

The question is ... why ? Anyone got any good theories ? Doesn't really resonate with the flight to quality theory.

Hubba

post-1262-1131818526_thumb.jpg

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I've just compiled this chart from the latest HBOS stats.

HBOS_Spread.JPG

It shows the spread between the average FOO prices and FTB prices from their monthly series. The "spread" is calculated by dividing the std price for FOOs by the std price for FTBs. You'll see that this figure hovers pretty reliably around the 1.6 mark apart from certain times.

Right now it is nosediving like it never has before. Not really the result I was expecting as it suggests that FOOs are leading the crash not the FTBs as you would expect. What's interesting from a bear's perspective is that the only other time this metric deviated from 1.6 was in (you guessed it) 1989.

The question is ... why ? Anyone got any good theories ? Doesn't really resonate with the flight to quality theory.

Hubba

"At no time in the past three decades has the gap between household formation and housing starts been as wide as it has been over the past 12 to 24 months," Rosenberg wrote. "We've become accustomed to hearing about how housing is in a new paradigm, that the fundamentals are sound, so on and so forth. But please, just don't tell me that the sector has managed to divorce itself from supply and demand realities."

http://www.signonsandiego.com/news/busines...-wall&main.html

Its a classic divergence. Fundamentals divorced from prices. Bubble economics.

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I've just compiled this chart from the latest HBOS stats.

HBOS_Spread.JPG

It shows the spread between the average FOO prices and FTB prices from their monthly series. The "spread" is calculated by dividing the std price for FOOs by the std price for FTBs. You'll see that this figure hovers pretty reliably around the 1.6 mark apart from certain times.

Right now it is nosediving like it never has before. Not really the result I was expecting as it suggests that FOOs are leading the crash not the FTBs as you would expect. What's interesting from a bear's perspective is that the only other time this metric deviated from 1.6 was in (you guessed it) 1989.

The question is ... why ? Anyone got any good theories ? Doesn't really resonate with the flight to quality theory.

Hubba

Actually it does show a flight to quality. It shows nothing about volumes but it does say that those FTBs buying are buying higher up (only the wealthy or stupid left). We know from LR that the more expensive props are selling at only a slightly slower rate ( < 10%) than last year. We also know that anything under £250K is off a cliff. So any FTBs left are paying top prices for top properties.

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Actually it does show a flight to quality. It shows nothing about volumes but it does say that those FTBs buying are buying higher up (only the wealthy or stupid left). We know from LR that the more expensive props are selling at only a slightly slower rate ( < 10%) than last year. We also know that anything under £250K is off a cliff. So any FTBs left are paying top prices for top properties.

For the person that asked "FOO" is "Former Owner occupier" by the way.

Gone West -

looks like you are absolutely correct. This chart shows the FTB and FOO prices alongside one another. I multiplied the FTB prices by 1.6 (the long run average) so that the relative movements are easire to see. Clearly only the less price-sensitive FTBs left.

HBOS_FTB_Vs_FOO.JPG

post-1262-1131823083_thumb.jpg

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  • 331 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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