They Think It's All Over....

[TheCountOfNowhere]

Please try the following and confirm what I see.

Do a rightmove search for NN1 + 5 miles, including SSTC.

I looked last night and almost everything above £500K has gone SSTC.

I keep a keen eye on the local market and most of these houses have been up for 12 months+, most are over prices by £200K+, man are in bad locations, stuff similar sold 12 months ago below £500K. I've even viewed a couple and thought WTF !!!

So, consider this:

We have either entered the "Enthusiasm" stage of the "Return to normal"

take your pick.

Either way, something has happened in the Northampton regions.

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

Locals ?

Londoners ?

People in chains ( housing or financial, take your pick ) ?

Chinese ?

Russians ?

Bulgarians and Romanians ?

Nutters ?

To be honest I am gob smacked at what I say when I did this search. I defies believe and explanation. Or did I dream this last night ?

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

Is it all over....has the HPC gone and prices are ready to inflate ?

Conversely,another search area I look at south of Birmingham has no such BOOM.

Edited March 12, 2014 by TheCountOfNowhere

[Errol]

I blame Putin.

[TheCountOfNowhere]

I blame Putin.

I'm more Put-out.

[worzel]

Please try the following and confirm what I see.

Do a rightmove search for NN1 + 5 miles, including SSTC.

I looked last night and almost everything above £500K has gone SSTC.

I keep a keen eye on the local market and most of these houses have been up for 12 months+, most are over prices by £200K+, man are in bad locations, stuff similar sold 12 months ago below £500K. I've even viewed a couple and thought WTF !!!

So, consider this:

We have either entered the "Enthusiasm" stage of the "Return to normal"

take your pick.

Either way, something has happened in the Northampton regions.

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

Locals ?

Londoners ?

People in chains ( housing or financial, take your pick ) ?

Chinese ?

Russians ?

Bulgarians and Romanians ?

Nutters ?

To be honest I am gob smacked at what I say when I did this search. I defies believe and explanation. Or did I dream this last night ?

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

Is it all over....has the HPC gone and prices are ready to inflate ?

Conversely,another search area I look at south of Birmingham has no such BOOM.

Same happening in my area of Sussex. It's not quite every house, but a lot of rubbish that has been on a long time is now going SSTC, and where I have discussed them with agents, this is at or close to asking price. I know they like to tell porkies, but to date this has been proven correct with land reg data.

I am seriously considering withdrawing from the market, we "need" to trade up due to expanding family, but perhaps we can just make do for another 12 months and see what happens. The market is already mad, and if it races away then it will just prove its even madder, but what to do then? Its all very frustrating.

Edited March 12, 2014 by worzel

[VeryMeanReversion]

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

1. Anyone with a large amount of savings that is desperate for some income (BTL)

2. Anyone with a small deposit that can qualify for HTB.

House prices never dropped enough post-2007 to serve as a warning that things can go seriously wrong. The repossessions of ~1990 are long forgotten.

[TheCountOfNowhere]

1. Anyone with a large amount of savings that is desperate for some income (BTL)

2. Anyone with a small deposit that can qualify for HTB.

House prices never dropped enough post-2007 to serve as a warning that things can go seriously wrong. The repossessions of ~1990 are long forgotten.

BTL-ers dont buy £500K properties to rent in Northants. One of the houses listed SSTC around £600K has previously been let for around £1200pcm...that doesnt add up.

I never considered HTBers ( up to 600K ) but even then we are talking around £3K a month mortgage to buy. Someone locally who needs help to buy and can afford 3K a month in repayments ? Possible but unlikely.

[frederico]

Could all be a last hurrah as the banks dump FLS money.

Could be people fed up with waiting.

Could be public perception of reality.

It is a mystery where the money is coming from.

[TheCountOfNowhere]

Could all be a last hurrah as the banks dump FLS money.

Could be people fed up with waiting.

Could be public perception of reality.

It is a mystery where the money is coming from.

Could be many things....but the fact is...it's happening !!!!

Has anyone checked my search ?

Has anyone outside London seen the same thing ?

One thing for sure....Renting is now cheaper than buying by a long way !!!

I doubt we'll see any of those anti-renting articles for quite some while.

[juvenal]

It is a mystery where the money is coming from.

From people who've just seen what interest rates the next ISA season is offering..

[interestrateripoff]

Can non-serious HPC'ers read this?

There's an election coming the property market needs to be moving so we can all feel rich and vote for George.

[Bloo Loo]

I blame Putin.

the Putin Put

[Smyth]

We have either entered the "Enthusiasm" stage of the "Return to normal"

You understand that this is just a picture essentially drawn by random person in the pub/blogosphere, rather than something which is backed by any serious statistical analysis of historical data or structural economic modeling, right?

[zugzwang]

Either way, something has happened in the Northampton regions.

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

Locals ?

Londoners ?

People in chains ( housing or financial, take your pick ) ?

Chinese ?

Russians ?

Bulgarians and Romanians ?

Nutters ?

To be honest I am gob smacked at what I say when I did this search. I defies believe and explanation. Or did I dream this last night ?

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

Is it all over....has the HPC gone and prices are ready to inflate ?

Conversely,another search area I look at south of Birmingham has no such BOOM.

It must be spillover from London's BTL mentalists. I can confirm there's been no comparable uptick in prices in the West Midlands though it's just possible that Benefits Street has done irreparable damage to Birmingham's reputation.

[Smyth]

This paragraph written by John Cochrane about bubbles (written in a different context, but still directly relevant) is lovely, and a succinct summary of whats wrong with crying 'bubble' whenever something costs more than you want it to:

Crying “bubble” is empty unless you have an operational procedure for identifying

bubbles, distinguishing them from rationally low risk premiums, and not crying wolf

too many years in a row. Krugman rightly praises Robert Shiller for his warnings

over many years that house prices might fall. But advice that we should listen to

Shiller, because he got the last one right, is no more useful than previous advice from

many quarters to listen to Greenspan because he got several ones right. Following

the last mystic oracle until he gets one wrong, then casting him to the wolves, is not

a good long-term strategy for identifying bubbles. Krugman likes Shiller because

he advocates behavioral ideas, but that’s no help either. People who call themselves

behavioral have just as wide a divergence of opinion as those who don’t. Are markets

rationally exuberant or irrationally depressed today? It’s hard to tell.

This difficulty is no surprise. It’s the central prediction of free-market economics,

as crystallized by Hayek, that no academic, bureaucrat or regulator will ever be able

to fully explain market price movements. Nobody knows what “fundamental” value

is. If anyone could tell what the price of tomatoes should be, let alone the price of

Microsoft stock, communism and central planning would have worked.

http://ricardo.ecn.wfu.edu/~cottrell/ecn272/cochrane.pdf

[Gigantic Purple Slug]

People wheel out that graph every couple of months or so, along with some anecdotal evidence of where we are supposed to be along the curve.

"Welcome to the Fear Phase" is the one I remember most.

I did your search between 500K and 600K. I got (a fast count) :

17 No class

10 SSTC

8 Under offer

Please try the following and confirm what I see.

Do a rightmove search for NN1 + 5 miles, including SSTC.

I looked last night and almost everything above £500K has gone SSTC.

I keep a keen eye on the local market and most of these houses have been up for 12 months+, most are over prices by £200K+, man are in bad locations, stuff similar sold 12 months ago below £500K. I've even viewed a couple and thought WTF !!!

So, consider this:

We have either entered the "Enthusiasm" stage of the "Return to normal"

take your pick.

Either way, something has happened in the Northampton regions.

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

Locals ?

Londoners ?

People in chains ( housing or financial, take your pick ) ?

Chinese ?

Russians ?

Bulgarians and Romanians ?

Nutters ?

To be honest I am gob smacked at what I say when I did this search. I defies believe and explanation. Or did I dream this last night ?

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

Is it all over....has the HPC gone and prices are ready to inflate ?

Conversely,another search area I look at south of Birmingham has no such BOOM.

[Bloo Loo]

You understand that this is just a picture essentially drawn by random person in the pub/blogosphere, rather than something which is backed by any serious statistical analysis of historical data or structural economic modeling, right?

yes, its crap.

crap that works.

[dances with sheeple]

Please try the following and confirm what I see.

Do a rightmove search for NN1 + 5 miles, including SSTC.

I looked last night and almost everything above £500K has gone SSTC.

I keep a keen eye on the local market and most of these houses have been up for 12 months+, most are over prices by £200K+, man are in bad locations, stuff similar sold 12 months ago below £500K. I've even viewed a couple and thought WTF !!!

So, consider this:

We have either entered the "Enthusiasm" stage of the "Return to normal"

take your pick.

Either way, something has happened in the Northampton regions.

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

Locals ?

Londoners ?

People in chains ( housing or financial, take your pick ) ?

Chinese ?

Russians ?

Bulgarians and Romanians ?

Nutters ?

To be honest I am gob smacked at what I say when I did this search. I defies believe and explanation. Or did I dream this last night ?

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

Is it all over....has the HPC gone and prices are ready to inflate ?

Conversely,another search area I look at south of Birmingham has no such BOOM.

Just desperate EA`s trying to ramp things? You know the area, if it doesn`t add up, it probably doesn`t add up to anything to worry about?

[TheCountOfNowhere]

People wheel out that graph every couple of months or so, along with some anecdotal evidence of where we are supposed to be along the curve.

"Welcome to the Fear Phase" is the one I remember most.

I did your search between 500K and 600K. I got (a fast count) :

17 No class

10 SSTC

8 Under offer

The graph is unimportant.

Do the search for ALL properties over 500K....the numbers relative to what has happened the previous 10 years is staggering.

Edited March 12, 2014 by TheCountOfNowhere

[Smyth]

yes, its crap.

crap that works.

It works in the sense that if you say "house prices are going to drop" every single year for a long enough period of time, you will eventually get one right by luck alone

[underscored]

Please try the following and confirm what I see.

Do a rightmove search for NN1 + 5 miles, including SSTC.

I looked last night and almost everything above £500K has gone SSTC.

I keep a keen eye on the local market and most of these houses have been up for 12 months+, most are over prices by £200K+, man are in bad locations, stuff similar sold 12 months ago below £500K. I've even viewed a couple and thought WTF !!!

So, consider this:

We have either entered the "Enthusiasm" stage of the "Return to normal"

take your pick.

Either way, something has happened in the Northampton regions.

Who would be buying stuff that has languished on the market at 2007+20% prices, i ask you ?

Locals ?

Londoners ?

People in chains ( housing or financial, take your pick ) ?

Chinese ?

Russians ?

Bulgarians and Romanians ?

Nutters ?

To be honest I am gob smacked at what I say when I did this search. I defies believe and explanation. Or did I dream this last night ?

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

Is it all over....has the HPC gone and prices are ready to inflate ?

Conversely,another search area I look at south of Birmingham has no such BOOM.

This reflects a new paradigm. Prices are totally delinked from earnings. Relative to other "riskier" investment assets, houses look well priced + there is a belief that as house prices are state backed they are very low risk assets.

However if the new paradigm cannot be sustained, they are going to be super expensive at current valuations.

I am personally very very angry as my incentives to work for money are being heavily undermined

[dances with sheeple]

The graph is unimportant.

Do the search for ALL properties over 500K....the numbers relative to what has happened the precious 10 years is staggering.

People fleeing Ukraine trying to go "under the radar", spreading the money out around the UK, using different family names etc.?

[TheCountOfNowhere]

This reflects a new paradigm. Prices are totally delinked from earnings. Relative to other "riskier" investment assets, houses look well priced + there is a belief that as house prices are state backed they are very low risk assets.

However if the new paradigm cannot be sustained, they are going to be super expensive at current valuations.

I am personally very very angry as my incentives to work for money are being heavily undermined

Angry is not the word !!!!

Money/Working has become pointless.....buy a house, pay the mortgage till you get to 65...sell...downsize...retire.

No need to work.

[billybong]

.

Edited March 12, 2014 by billybong

[billybong]

Just to be clear where the bubble chart comes from.

http://

en.wikipedia.org/wiki/Jean-Paul_Rodrigue

Jean-Paul Rodrigue

Jean-Paul Rodrigue (born July 20, 1967) is a Canadian scholar of transportation geography. He has a PhD in transport geography from the Université de Montréal (1994) and has been part of the Department of Global Studies and Geography at Hofstra University in Hempstead, New York, since 1999. His work, L'espace économique mondial: les économies avancées et la mondialisation, (The Global Economic Space: Advanced Economies and Globalization) won the PricewaterhouseCoopers "Best Business Book" award in 2000.

More recently, in 2008, Rodrigue achieved notability with his bubble model, charting four "phases of a bubble". While the "smart money" has purchased during the earlier "stealth phase", institutional investors begin to buy during "take off". Following media coverage, the general public begins to invest leading to steep rise in prices as "enthusiasm" and then "greed" kick in. "Delusion" precedes the peak.[1]

The chart was widely syndicated during the late-2000s financial crisis

Edited March 12, 2014 by billybong

[Smyth]

This reflects a new paradigm. Prices are totally delinked from earnings. Relative to other "riskier" investment assets, houses look well priced + there is a belief that as house prices are state backed they are very low risk assets.

Its not obvious that house prices should be linked to earnings, and I dont really understand why people insist that they must be, even in the long run.

What matters for most people is cash flow - the amount they are paying each month (in rent or mortgage payments) vs their monthly salary. It doesnt really matter what the house costs in absolute terms, what is important is the cost of financing the purchase, and how this relates to rental prices. If the cost of finance is low (which includes both current interest rates, along with rational predictions about future interest rates over a long term horizon) relative to the cost of renting, then buying is rational.

While interest rates are almost certainly going to rise soon, most sensible predictions put them as staying relatively low for the next 20-30 years. See current yields on 20-30 year gilts, which are essentially the best market predictions about future interest rates: http://markets.ft.com/research/Markets/Bonds

A £400K house in an environment where it is sensible to expect low interest rates is a 'cheaper' purchase than a £200k house where it is sensible to expect high interest rates. Its not the price that matters, its cash flow.