Nationwide May 2018: -0.2% MoM, +2.4% YoY

[thewig]

47 minutes ago, spyguy said:

Bit arithmethist mate.

[FabulousSophie]

It looks like this debt deflation housing bust may indeed follow a different pattern to previous busts, which were caused by interest rate rises. So far this bust seems to be more drawn out than those busts, which if I remember correctly, did not take this long to peak, plateau, decline and ripple out. How long did previous busts take from peak to trough?

[mattyboy1973]

7 hours ago, thewig said:

0.999*0.999*0.999*0.999*0.999*0.999*0.999*0.999*0.999*0.999*0.999*0.999 = 0.98807

= 1.193% drop 

 

Don't you start at 1?

[thewig]

3 minutes ago, mattyboy1973 said:

Don't you start at 1?

yep, then twelve months of 0.01% falls

[mattyboy1973]

ah I was doing .99 x/y 12 so I was doing it 12 times but with the wrong number. Or was it? Too late to tell.

[mrtickle]

13 hours ago, CanAffordWontPay said:

Thanks for sharing that skit. Ive never seen that before, it was cracking me up. It really does sum it up nicely, especially when he tripped the guy up ?. I didn't even think at the time about recording it. From what Yellow Sticker is saying it sounds like a whole video series could be made.

My pleasure! It would make a great YouTube channel! Coffin-dodgers chasing bargains.

 

[FabulousSophie]

I have just had a look at the Nationwide's house price chart going back to 1975. As far as I can measure the peak to trough periods for the various previous busts are as follows:

Q1 1975 - Q3 1977  2.75 years

Q1 1980 - Q3 1982 1.75 years

Q1 1990 - Q2 1996  5.25 years

Q3 2007 - Q3 2012 . 5 years

Q3 2015 - ?

If this current bust begin in Q3 2015, it is already almost 3 years old. If historical patterns are followed, it should now therefore either be over or nearing its bottom (U shaped).

 

[FabulousSophie]

PS I should clarify that the first stages of London's bust began in Q3 2015 and it is therefore virtually 3 years old there already. So by historical precedent it should now be over or almost bottoming there. The national figures are clearly highly delayed but may follow the same timeframe. Perhaps London will actually start to recover before the nationwide bust begins?

[SOLZHENITSYN]

48 minutes ago, FabulousSophie said:

PS I should clarify that the first stages of London's bust began in Q3 2015 and it is therefore virtually 3 years old there already. So by historical precedent it should now be over or almost bottoming there. The national figures are clearly highly delayed but may follow the same timeframe. Perhaps London will actually start to recover before the nationwide bust begins?

While some parts of London (Prime Central) peaked in Q3 2015, others have only just started to slow/fall. We are nowhere near the trough for Greater London as a whole. At least I bloody hope not!

[spyguy]

2 hours ago, FabulousSophie said:

I have just had a look at the Nationwide's house price chart going back to 1975. As far as I can measure the peak to trough periods for the various previous busts are as follows:

Q1 1975 - Q3 1977  2.75 years

Q1 1980 - Q3 1982 1.75 years

Q1 1990 - Q2 1996  5.25 years

Q3 2007 - Q3 2012 . 5 years

Q3 2015 - ?

If this current bust begin in Q3 2015, it is already almost 3 years old. If historical patterns are followed, it should now therefore either be over or nearing its bottom (U shaped).

 

You need to plot against wages too.

Wages are the the only really good metric.

The probme with the 2004ish onwards is that wage growth has been belowe prices.

If .... wages had grown at prices + 3% then we'd not been in this mess 10 years down the line from 2008.

Unfortunately, the same idiot that thought it was good idea to blow the biggest credit bubble ever also decided to pay 5-9m EEers, suppressing wages *AND* inflating public expenditure.

 

[Kurt Barlow]

On 31/05/2018 at 22:06, Yellow_Reduced_Sticker said:

 

Count I'm convinced the CRASH is on the cards within the next 12 to 24 months100%.

 

This year just feels like 2007/8 people just don't have any money, I've just returned from Tesco's to time the Yellow Reduced Sticker's AND i nearly had my hand ripped off in the tray basket to grab some reduced apples (BTW 8p) as people are scrabbling to grab the bargains, i mean i never seen it this bad!

 

Talk to any local taxi driver and ya'll get the same spill...

 

I can still remember in 1990 on a Friday night news at TEN when they announced yet again how house prices fell month after month for 2 years...people don't believe it will happen again, which is understandable with whats been going on... anyway I'm EVEN more sure now its going to CRASH after reading DB's brilliant thread.

Best,

Vinny!

My wife and I saw a fight in Basildon the other week over the reduced item trolley?

[FabulousSophie]

1 hour ago, SOLZHENITSYN said:

While some parts of London (Prime Central) peaked in Q3 2015, others have only just started to slow/fall. We are nowhere near the trough for Greater London as a whole. At least I bloody hope not!

If the national (year on year) figures take another 6 to 12 months to turn negative, by precedent, Prime Central London may start recovering before that even happens. That would mean that this bust has taken as long as 4 years from its inception to ripple into the national figures.

Did the previous busts in 1975, 1980, 1990 and 2007 begin in central London as much as 4 years earlier than it reeached the national figures, or was the ripple from London in those busts greatly accelerated in comparison to today's bust? 

[Bland Unsight]

4 hours ago, FabulousSophie said:

I have just had a look at the Nationwide's house price chart going back to 1975. As far as I can measure the peak to trough periods for the various previous busts are as follows:

Q1 1975 - Q3 1977  2.75 years

Q1 1980 - Q3 1982 1.75 years

Q1 1990 - Q2 1996  5.25 years

Q3 2007 - Q3 2012 . 5 years

Q3 2015 - ?

If this current bust begin in Q3 2015, it is already almost 3 years old. If historical patterns are followed, it should now therefore either be over or nearing its bottom (U shaped).

(Emphasis added)

Ah, the famous 1980 London bust. A terrible time. Police in the streets. Destitute estate agents panhandling for change at every tube station. If I recall correctly the London Evening Standard ran that famous front page with the words "Abandon all hope, ye who enter here" emblazoned over a Hieronymus Bosch rendering of Hell.

Source

Now, that was a bust nobody was ever going to forget.

 

Edited June 3, 2018 by Beary McBearface

[Maximus Skepticus]

Supply innit...

https://www.telegraph.co.uk/property/house-prices/uk-house-prices-slip-market-loses-momentum/

 

[Sancho Panza]

1 hour ago, FabulousSophie said:

If the national (year on year) figures take another 6 to 12 months to turn negative, by precedent, Prime Central London may start recovering before that even happens. That would mean that this bust has taken as long as 4 years from its inception to ripple into the national figures.

Did the previous busts in 1975, 1980, 1990 and 2007 begin in central London as much as 4 years earlier than it reeached the national figures, or was the ripple from London in those busts greatly accelerated in comparison to today's bust? 

This bubble has taken HPI way beyond where local salaries took the previous bubbles,given this was pushed at the margins by BTL and foreign buyers.

I'd becareful using previous blow offs as a guide for timing.Rather use local salaries as per @spyguy says

[FabulousSophie]

10 minutes ago, Sancho Panza said:

This bubble has taken HPI way beyond where local salaries took the previous bubbles,given this was pushed at the margins by BTL and foreign buyers.

I'd becareful using previous blow offs as a guide for timing.Rather use local salaries as per @spyguy says

 

3 hours ago, spyguy said:

You need to plot against wages too.

Wages are the the only really good metric.

The probme with the 2004ish onwards is that wage growth has been belowe prices.

If .... wages had grown at prices + 3% then we'd not been in this mess 10 years down the line from 2008.

Unfortunately, the same idiot that thought it was good idea to blow the biggest credit bubble ever also decided to pay 5-9m EEers, suppressing wages *AND* inflating public expenditure.

 

So the thinking is that this bust will be quite unlike any previous busts, and It will follow a completely different pattern, timeframe, and depth?

I suppose in previous busts, all regions were hit simultaneously by higher interest rates, so the bubble probably burst more or less in syn everywhere, with less of a ripple effect. This time, rising interest rates are not responsible for busting the bubble, but instead it seems to be collapsing under the weight of its own contradictions, with a little help from new mortgage rules and S24. That may account for the delayed and elongated ripple out from central London.

[spyguy]

1 minute ago, FabulousSophie said:

 

So the thinking is that this bust will be quite unlike any previous busts, and It will follow a completely different pattern, timeframe, and depth?

I suppose in previous busts, all regions were hit simultaneously by higher interest rates, so the bubble probably burst more or less in syn everywhere, with less of a ripple effect. This time, rising interest rates are not responsible for busting the bubble, but instead it seems to be collapsing under the weight of its own contradictions, with a little help from new mortgage rules and S24. That may account for the delayed and elongated ripple out from central London.

No.

I reckon itll be just like other busts - prices will drop below 4x earnings.

Theres no point clinging to charts and the like when the the fundamental with housing is and has always been earnings.

I have an ongoing argument on the South East thread. My argument is based on the fact that the Thames valley has had a structural fall in wages/loss of well paying jobs.  And massive rise in benefits claimants.

Anyone able to access the number of households on tax credits in the M4 corridor will see it, instantly.

[Sancho Panza]

11 minutes ago, FabulousSophie said:

 

So the thinking is that this bust will be quite unlike any previous busts, and It will follow a completely different pattern, timeframe, and depth?

I suppose in previous busts, all regions were hit simultaneously by higher interest rates, so the bubble probably burst more or less in syn everywhere, with less of a ripple effect. This time, rising interest rates are not responsible for busting the bubble, but instead it seems to be collapsing under the weight of its own contradictions, with a little help from new mortgage rules and S24. That may account for the delayed and elongated ripple out from central London.

This is potentially a once in a 70/80 year debt deflation.Previous busts were mainly inflationary/rising IR's.
I rule nothing in/nothing out.But best guess at the mo is debt deflation which followed GD1 and featured contractions in broad money supply which didn't occur in the busts you mention.

 

Deflation thread is worth a read if you haven't had a butchers.

 

Like I say we could both be worng.One of us could be right etc.

[Bland Unsight]

5 hours ago, FabulousSophie said:

I have just had a look at the Nationwide's house price chart going back to 1975. As far as I can measure the peak to trough periods for the various previous busts are as follows:

Q1 1975 - Q3 1977  2.75 years

Q1 1980 - Q3 1982 1.75 years

Q1 1990 - Q2 1996  5.25 years

[snip]

 

(Emphasis added)

Where are you getting that from?

Source: Home Ownership in Crisis?, Forrest, R et al, (Ashgate, 1989)

The Nationwide data runs from a Q2 1989 peak to a Q4 1992 trough, which is three and a half years, consistent with the figures from the CML cited above.

Where are you getting your figures from @FabulousSophie? 

In "the peak to trough periods" you appear to have included a 1980s "bust" where there was no trough and you also appear to be dating the post-1989 trough as occurring almost two years later than the conventional reading places it.

Edited June 3, 2018 by Beary McBearface

[Bland Unsight]

Dupe. Soz

 

Edited June 3, 2018 by Beary McBearface

[Bland Unsight]

5 hours ago, FabulousSophie said:

I have just had a look at the Nationwide's house price chart going back to 1975. As far as I can measure the peak to trough periods for the various previous busts are as follows:

Q1 1975 - Q3 1977  2.75 years

[snip]

(Emphasis added)

Seeing as the first two I checked were a little bit sketchy, I thought I better check the other one. This is a thread about the Nationwide monthly and annual HPI figures which are reported in nominal (current) prices. Here's your 1975 "bust" in nominal.

I am massively dubious about the merits of trying to predict how long a fall in nominal prices will last by looking at the historical data for other sequences of nominal falls.

However, you've:

• included a "bust" where nominal prices were level (your 1980 "bust")
• included a "bust" where nominal prices rose (your 1975 "bust")
• spuriously added an additional seven quarters to the 1989 bust

 

 

[FabulousSophie]

This is the chart I was looking at, from which I tried to measure the peak to trough periods:

[Bland Unsight]

10 minutes ago, FabulousSophie said:

This is the chart I was looking at, from which I tried to measure the peak to trough periods:

OK, so you're using the Nationwide real prices series (Excel file from NW website).

Here's a more up to date version (with the exponential 'fit' line removed).

Personally I feel that reading charts is mumbo-jumbo, but in for a penny in for a pound, why argue, as you do, that the price falls in London are about to end, why not go wild and imagine that everything that looks like a peak in the post-2008 chart is just noise and that real prices are going to fall for twenty years.

Actually, looking at the recent trend in the chart more carefully, I'm pretty sure that I can see the beginnings of a vomiting camel formation, which as everyone knows, is super-bearish (the only more bearish formation is the constipated bear fierce with rage induced by its inability to purchase laxatives formation).

 

 

[spyguy]

2 hours ago, FabulousSophie said:

 

So the thinking is that this bust will be quite unlike any previous busts, and It will follow a completely different pattern, timeframe, and depth?

I suppose in previous busts, all regions were hit simultaneously by higher interest rates, so the bubble probably burst more or less in syn everywhere, with less of a ripple effect. This time, rising interest rates are not responsible for busting the bubble, but instead it seems to be collapsing under the weight of its own contradictions, with a little help from new mortgage rules and S24. That may account for the delayed and elongated ripple out from central London.

No.

Im northern. I was in SE in mid 90s.

SE went up more then fell further than the north. Hearing tales of people whod gone under losing 50% nominal over 5 years were common.

The north saw lower highs then a shallower dip.

In terms on hp v wages SE went under 3 hpe in places inc. London.

In the North good places were under 4 hpe but crap places saw people almost paying people to get rid of them.

[spyguy]

1 hour ago, FabulousSophie said:

This is the chart I was looking at, from which I tried to measure the peak to trough periods:

In connection to my comments on the only ratio mattering is wages v. House prices, you have to be aware that the banks and bses have massaged the wage figures, going from average male wage to average household income where the bloke delivers pizza after work and the wife is working in a strip bar.

The problem on basing household income on what mr mrs earn, jointly, is that one income goes when jr pops out and does not return til hes moved back in the family home after uni....

MMR totally destroys the last 30 odd years of bank income stats abuse.