scaramanga Report post Posted December 9, 2005 FT_com___Your_money___Your_home___House_prices_rising_at_slowest_rate_in_nine_years.htmFT_com___Your_money___Your_home___House_prices_rising_at_slowest_rate_in_nine_years.htm Quote Share this post Link to post Share on other sites
PhilT Report post Posted December 9, 2005 This is currently the headline item on the FT website. With stable prices, the ratio of house prices to average earnings has finally begun to fall, but house prices will have to remain stable for years if the ratio is to come down to level that were considered normal as recently as a couple of years ago. On this and many other measures, the housing market is still highly valued. Good comments, but they are careful not to say over valued. Quote Share this post Link to post Share on other sites
bears all Report post Posted December 9, 2005 It made me smile to read "House prices are now rising slower than the rate of inflation and well below the rate of average earnings growth. There is no sign of a housing crash." So let's get this straight. The rate of increase goes up massively until summer 2004. Then it starts to fall. And it falls and falls and falls until it reaches about zero. But that doesn't look like a crash. Now, from summer 2004 what would a crash actually look like if one was going on? Well, I think we're safe in saying that the rate of increase would start to fall. And then it would fall and fall and fall .... Funny that. Quote Share this post Link to post Share on other sites
crash 2005 Report post Posted December 9, 2005 It made me smile to read "House prices are now rising slower than the rate of inflation and well below the rate of average earnings growth. There is no sign of a housing crash." So let's get this straight. The rate of increase goes up massively until summer 2004. Then it starts to fall. And it falls and falls and falls until it reaches about zero. But that doesn't look like a crash. Now, from summer 2004 what would a crash actually look like if one was going on? Well, I think we're safe in saying that the rate of increase would start to fall. And then it would fall and fall and fall .... Funny that. Too true. What you must not forget also is that the HPI rate went from circa 20% to nearly 0% in period where according to flash gordon the economy was robust and in good shape remember the election spin... the thing is now, everyone now knows the UK economy has done very badly and will continue to do so, so if anything the fall will continue into next year, what can possibly reverse it. Quote Share this post Link to post Share on other sites
Nijo Report post Posted December 9, 2005 We know that house prices are sticky downwards - a house is a sentimental item that owners don't want to see drop in 'value'. That, together with the cashback tricks used by developers to maintain the illusion of stability, suggests to me that 0% HPI is something of a barrier. That reminds me of a 'self-organised criticality' discussion I was having yesterday: skipping the details, that you can build flood defences but when those are breached the resultant flood is all the more severe. http://en.wikipedia.org/wiki/Self-organized_criticality Quote Share this post Link to post Share on other sites
zorn Report post Posted December 9, 2005 It made me smile to read "House prices are now rising slower than the rate of inflation and well below the rate of average earnings growth. There is no sign of a housing crash." So let's get this straight. The rate of increase goes up massively until summer 2004. Then it starts to fall. And it falls and falls and falls until it reaches about zero. But that doesn't look like a crash. Now, from summer 2004 what would a crash actually look like if one was going on? Well, I think we're safe in saying that the rate of increase would start to fall. And then it would fall and fall and fall .... A crash is when actual nominal prices fall significantly, not when the rate of increase falls. Quote Share this post Link to post Share on other sites
