Nationwide Jul 2018

[Bland Unsight]

45 minutes ago, Mossie said:

 You could actually make a real difference in the world on many other matters in life, than years and year of energy and thought on how other people who bought and buy houses are mindless twerps against your better understanding.

At some point you trolls will understand that what you lack is not intellect but empathy.

If house prices race away from earnings uncontrollably what results is an inter-generational conflict. That conflict is not resolved by the fact that some people who were older and bought ahead of this asset price inflation did tidily - that's the basis of the conflict.

If it can't be sustained as one generation passes on its hand to another then it's not a plan, it's a grift.

 

Edited August 1, 2018 by Jurassic Bland

[Bland Unsight]

1 hour ago, Bland Unsight said:

At some point you trolls will understand that what you lack is not intellect but empathy.

Scratch that. Better to say that each troll who is not an utter fool will eventually understand the nature of the thing that they lack, if it is explained temperately and methodically. However when it comes to "you trolls", given that for a decade and a half there's been more than one or two, I can't see any reason why there won't be at least one for the next decade and change.

 

 

Edited August 2, 2018 by Bland Unsight
Typo: trolls/troll

[Monkey]

14 hours ago, advicewelcome said:

Did a cursory glance at this Bloomberg chart for London as Prime Central London can be incisive based on the ripple effect... 

https://www.bloomberg.com/graphics/property-prices/london/

If I read it correctly - Kensington & Chelsea is showing a 20% increase in value over last year. But transactions numbers in April 2018 are down to all time low of 90 transactions (compared to 482 transactions in the pre-Brexit pre-BTL-tax crazy days of March 2016). 

Does this not demonstrate that unless you have a minimum number of transactions clearing within any market you cannot accurately determine the commodity value. Until the transaction volumes reach that critical minimum number, the true supply-demand market value will be heavily skewed. I wonder if there is any science about the minimum number of transactions required in order for commodity value to be considered largely +/- correct? - (the more the transactions the more accuracy would occur around that number).

  

 

 

And thats what seasonal adjustment is. Basically Nationfax Massage the numbers to even out peaks and troughs in transactions over a year. Otherwise there would be more MOM and QOQ drops mid summer and at Xmas every year

[Locke]

8 hours ago, Mossie said:

If some like big mortgages it's their choice. 

Nope. The near-zero interest rates they are paying are held there by wealth stolen from everyone else, including future generations. So it's not their choice; it's our burden.

8 hours ago, Mossie said:

You could actually make a real difference in the world on many other matters in life, than years and year of energy and thought on how other people who bought and buy houses are mindless twerps against your better understanding.

That's true. You have to live your life to the maximum possible. For lots of people now, that means accepting that in the current rigged-by-extraordinarily-evil-people environment, home ownership is simply not on the cards.

Judgement, however, is a necessary social control and those who screed against it have usually committed immoralities themselves.

9 hours ago, Aidan Ap Word said:

Just a scary thought though: are we not all in the queue to repay the QE debt? And the debt of the ECB? And even some of the US national debt?

According to the State. Realistically though, what is the government going to do if when people simply refuse to work just to support other parasites? Openly enslave them?

12 hours ago, Dorkins said:

This saying only applies if you have debts. Without debt you are not at risk of insolvency.

It also applies when you have short/long positions you are holding.

Renting is effectively shorting house prices.

[advicewelcome]

36 minutes ago, Monkey said:

And thats what seasonal adjustment is. Basically Nationfax Massage the numbers to even out peaks and troughs in transactions over a year. Otherwise there would be more MOM and QOQ drops mid summer and at Xmas every year

Ta. OK, understand that seasonal adjustment would be done. But a drop from 482 transactions to 90 in one area of London, shows a market in stagnation. We know that from Foxton's share price crash (transactions are the life blood of agents). 

Any supplier-buyer commodity is going to achieve a "market price". When there are lots of transaction frictionessly  executed the true market price is easily evaluated (stock market, ebay, etc..)

The housing market is less elastic (chain dependencies, SDLC tax to pay, people have to physically move, takes long time to execute - even longer to show up on registries, people rent out instead and so on).

I was asking at what point does market science say that the true market value has been achieved. E.g. Do we need 200 transactions in Kensington & Chelsea at minimum, to say that we are +/- 5% of the real market price. And does the current 90 transactions mean that we are +/-40% of the the real market price of a property.

The stats say that prices in Kensington & Chelsea have gone up by 20% last year - but we know those figures are nonsense as transactions have vanished. Was just wondering what is the science and theories behind this which could be applied to the wider market.? Capiche?
 

[winkie]

Can make figures say what you want them to say......depending on the agenda.

[zugzwang]

22 minutes ago, advicewelcome said:

Ta. OK, understand that seasonal adjustment would be done. But a drop from 482 transactions to 90 in one area of London, shows a market in stagnation. We know that from Foxton's share price crash (transactions are the life blood of agents). 

Any supplier-buyer commodity is going to achieve a "market price". When there are lots of transaction frictionessly  executed the true market price is easily evaluated (stock market, ebay, etc..)

The housing market is less elastic (chain dependencies, SDLC tax to pay, people have to physically move, takes long time to execute - even longer to show up on registries, people rent out instead and so on).

I was asking at what point does market science say that the true market value has been achieved. E.g. Do we need 200 transactions in Kensington & Chelsea at minimum, to say that we are +/- 5% of the real market price. And does the current 90 transactions mean that we are +/-40% of the the real market price of a property.

The stats say that prices in Kensington & Chelsea have gone up by 20% last year - but we know those figures are nonsense as transactions have vanished. Was just wondering what is the science and theories behind this which could be applied to the wider market.? Capiche?
 

The smoothly intersecting supply-demand curves in the economics textbooks are ideological fictions. The physicist Maury Osborne determined their actual nature: non-invertible step-functions. Since demand 'curves' can take any shape, true (time-invariant) value is impossible to define. Without an auctioneer market value can only be established by consensus on a case by case basis.

 

Edited August 2, 2018 by zugzwang

[longgone]

11 hours ago, Bland Unsight said:

It's more a matter of trying to accurately apprehend oneself as a 'thing' and understand better how such a thing apprehends the world and itself as part of the world.

All scientific knowledge is contingent so the idea of proof has no bearing on the matter.

I felt that Dorkins was alluding to something crucial about how people actually decide to buy houses.

There's quite an overlap between the analysis in Damasio and the ideas about Type 1/'fast' (rule of thumb) reasoning as opposed to 'analtyical' reasoning. Mervyn King addresses the topic explicitly in his gratuitous addition to his already generous pension, or, as he called it, 'book'.

For me the graphs of key statistics are like the half-time score and theorists' books are like commentary in the second half, but ever and always there's the game, and the game is just the game. All of it is interesting.

 

fear and need nothing else. 

[longgone]

10 hours ago, dugsbody said:

You mean your generation raised such shit children that they now have no work ethics? Man, where did you guys go wrong, why did you do such a terrible job? 

i never raised any kids. ??? work ethics rhymes with tax credits. just a coincidence 

[rantnrave]

20 hours ago, AdamoMucci said:

 

Yes, I am suprised nobody talks about Fred Harrison around here anymore. I wonder if many here do not even know who he is. He was all the rage here back in 2009. Nobody really talks about LVT even though that is the solution.

Fred Harrision has indeed predicted that 2019 is a wobble, and 2025 is the crash according to the cycle he talks about. I do not have huge faith such rigid cycles and have not looked back at data. I can only go from memory of the most recent cycle and we had a peak/crash in 1990. Around 2000/1 we had a mild recession ("just a manufacturing recession" as it was helpfully labelled at the time by the media) that was held off by loose monetary policy. Which saw Gordon Brown celebrated. 2002/3 from memory was a big couple of years for house prices (related to Gordon's monetary heroics in 2000/1?), then they slowed into the dip of 2005/6, before the "correction" of 2008.

If we are in the same cycle, we are now at the 2000/1 slowdown. Which does seem to be about the same number of years, say ten. Which means 2019-2021 big rises. Followed by a 2005 type slowdown. Then a 2006/7 type rise in 2023-2025 before a crash.

I am not seeing anything that suggests we are seriously deviating from that right now. Many feel 2008 was not much of a property crash. Could 2025, after all the monetary easing of this cycle, truly be the big one? Im saying that somewhat tongue in cheek because it is of course sad/pathetic for one of us here to say "2025 might be the big one" after ten years of talking about an imminent crash.

I am not a fan of theories that predict fixed cycles - there are just so many other factors that can come in to play.

In this case though, things do seem to be aligning with this particular theory. I can see a wobble in 2019, partly attributed to Brexit. This lets banks unleash Hammond's latest £750bn gift, which puts rocket fuel under house prices. The causes of both a wobble next year and the source of further HPI afterwards are already in place.

[Monkey]

57 minutes ago, advicewelcome said:

 

I was asking at what point does market science say that the true market value has been achieved. 

 

The problem with nationfax is that they have been massaging the figures so much for so long its almost impossible to unravel. 

Even the raw data wont actually be raw, as they will have certain types of property excluded or on another table.

The Land Registry for instance is considered the rawest and unbiased data, their numbers are lagging by 3 months. But they dont inculde reposession sales, and i am sure there are other types not incuded too. 

Its not the same with a product, a product price is the price, and that price doesnt necessarily change due to location. 

A house price is an opnion, based on emotion at any time. Forgetting land and labour  the building blocks of that house, the actual actual material should be the same price over the country, the price of a brick is the price of a brick, but the labour rate changes on location, mainly due to housing costs (its a bit of chicken and egg) so then is also comes down to land desirability cost that the house sits on

But this is all correct for brand new, so why arnt 20 year old houses much, much cheaper?  it has to be the land cost thats gone up, and not the house per se. 

 

 

[advicewelcome]

1 hour ago, zugzwang said:

The smoothly intersecting supply-demand curves in the economics textbooks are ideological fictions. The physicist Maury Osborne determined their actual nature: non-invertible step-functions. Since demand 'curves' can take any shape, true (time-invariant) value is impossible to define. Without an auctioneer market value can only be established by consensus on a case by case basis.

 

.. AAAAllllrigteee... that clears that up. Or maybe not. Will need to google it before I reply.

Just saying, if there are 5000 houses in a given area - can we say that unless 10% of them (for example) are transacting, we are unable to determine a valid house price value for that area?

I know its a bit more complicated - 'cause in a house price rampant market (March 2016) there are a lot more price increases and therefore transactions and higher. However, considering we are now here, Mexican Standoff between buyers and sellers - is there a point at which we can say transactions numbers need to recovered to a certain level  before we can be sure that the average transaction price is reflective of the true market value?

 

 

 

[zugzwang]

1 hour ago, advicewelcome said:

.. AAAAllllrigteee... that clears that up. Or maybe not. Will need to google it before I reply.

Just saying, if there are 5000 houses in a given area - can we say that unless 10% of them (for example) are transacting, we are unable to determine a valid house price value for that area?

I know its a bit more complicated - 'cause in a house price rampant market (March 2016) there are a lot more price increases and therefore transactions and higher. However, considering we are now here, Mexican Standoff between buyers and sellers - is there a point at which we can say transactions numbers need to recovered to a certain level  before we can be sure that the average transaction price is reflective of the true market value?

 

You might be able to discover some kind of relationship between price and demand by doing a thorough statistical analysis of the local market(s) you're interested in. But such signals tend to be weak and intermittent even in very liquid financial markets. As a general rule the fewer transactions there are the more volatile the price but there was no shortage of people buying Facebook two weeks ago when it was $220!

[longgone]

14 hours ago, adarmo said:

Today in the office someone asked me to check over their sums on moving house. 

His first buyer fell through and he accepted a new offer £25k less than the first. Meanwhile the owners of the house he was trying to purchase reduced the asking by £25k. Chump is keen to offer asking price but take an offer on his place (whatever) and the move is more sideways being a marginal 11% increase in value from existing home to new one. 

In summary, £25k less on his house, countered by £25k less on the place he wants to buy means his mortgage is £2k lower as a result of the EA doing a deal to reduce fees, lower fees anyway, and the reduced stamp duty of £1,250. His LTV was marginally higher but will have no impact given the amount of equity. 

If anyone is interested this represents a reduction of c.6%.

"There" said I, "falling prices are a good thing for almost everyone". He returned a curious and unconvinced look despite having performed the calculations himself. 

did he need an account to work that out ?

[advicewelcome]

57 minutes ago, zugzwang said:

You might be able to discover some kind of relationship between price and demand by doing a thorough statistical analysis of the local market(s) you're interested in. But such signals tend to be weak and intermittent even in very liquid financial markets. As a general rule the fewer transactions there are the more volatile the price but there was no shortage of people buying Facebook two weeks ago when it was $220!

... ah ok. The terms "liquid", "elastic" and "high-transnational" markets may be worth thinking about here for a sec. I guess liquid means easily 'buyable' and 'sellable', which means they price is very 'elastic' to supply and demand - we are probably agreed that a minimum transnational volume is probably needed in order to attain reasonable assurance around 'market value' of any trade'able commodity in any marketplace (in this case house prices). Sure, people will buy and sell at all sorts of prices, but to attain the market value, I guess we need just enough averages to be reasonably sure of the market value.

Maybe I am missing something in the Nationwide Report - but I don't see anything which alludes to the overall transnational volumes they are basing their stats on - and this is fundamental right?  And if this is the case, should I be cynical its debt-selling banks hyping the market price. 

 

 

[adarmo]

1 hour ago, longgone said:

did he need an account to work that out ?

 And still refused to accept the logic. Genuinely seemed deflated he was taking 25k less for his place and ignoring that the net result was a 2k smaller mortgage. 

?

[TheGreatestFool]

18 minutes ago, adarmo said:

 And still refused to accept the logic. Genuinely seemed deflated he was taking 25k less for his place and ignoring that the net result was a 2k smaller mortgage. 

?

"There" said I, "falling prices are a good thing for almost everyone" ........except estate agents on % commission and the tax man. Pity the poor darlings!

[adarmo]

11 minutes ago, TheGreatestFool said:

"There" said I, "falling prices are a good thing for almost everyone" ........except estate agents on % commission and the tax man. Pity the poor darlings!

Tbh i don't even think it's bad for them directly. Those guys make money on transactions (maybe less cgt from investment property for hmrc if prices fall) but really the only losers from modest falls are highly leveraged property hoarders and those wanting to downsize and cash out for retirement or whatever. 

I bought last year so it would be ironic if i got clobbered with the correction after 10 years of not buying. Anyway, i would be very happy with nominal falls of 2% or slightly higher for the next.... forever. It would maintain my LTV and mean that my second stepper house would be cheaper and/or better than otherwise. 

[longgone]

2 hours ago, adarmo said:

 And still refused to accept the logic. Genuinely seemed deflated he was taking 25k less for his place and ignoring that the net result was a 2k smaller mortgage. 

?

if prices stayed the same and you only had wage inflation everyone would feel as though work paid so they spent more in the economy and the next run of the ladder would be achievable with increased wages. 

all you have now is did you get lucky when you bought. 

[Dorkins]

18 hours ago, Aidan Ap Word said:

Just a scary thought though: are we not all in the queue to repay the QE debt?

No, the debt belongs to the government, not the inhabitants of the UK. The government likes it when people muddle the two up though.

[adarmo]

25 minutes ago, longgone said:

if prices stayed the same and you only had wage inflation everyone would feel as though work paid so they spent more in the economy and the next run of the ladder would be achievable with increased wages. 

all you have now is did you get lucky when you bought. 

 Very lucky. 

[Aidan Ap Word]

2 hours ago, Dorkins said:

No, the debt belongs to the government, not the inhabitants of the UK. The government likes it when people muddle the two up though.

OK, but when the government repays the debt (as surely they must?) then they do so from tax revenues from the people. So my children's tax bill is inflated to cover the profligacy of today? 

Unless they never repay it? 

Or they inflate it away. But I can't see that happening without the 1% consent. 

Still not sure how the distinction helps us? Why does the govt like it when numpties like me muddle it up? 

[Ash4781]

From the Nationwide report. ‘Fixed’ but no durations. I think next it will be help for those who cannot refinance to keep the plates spinning. 

Edited August 2, 2018 by Ash4781

[Aidan Ap Word]

2 hours ago, Ash4781 said:

From the Nationwide report. ‘Fixed’ but no durations. I think next it will be help for those who cannot refinance to keep the plates spinning. 

So the 0.25% rate rise affects how many people immediately I wonder? Looks like a (relatively) small amount?

Except all Fergus Willson's tenants ... who now have to bother writing to him to tell him to stick his 50 GBP rent hike where ...?

[Dorkins]

16 hours ago, Locke said:

It also applies when you have short/long positions you are holding.

Renting is effectively shorting house prices.

Here's the definition of short selling:

Quote

Short selling is the sale of a security that is not owned by the seller or that the seller has borrowed.

https://www.investopedia.com/terms/s/shortselling.asp

How many houses have you sold that you either didn't own or borrowed? It's a neat idea though, I might try selling my landlord's house now, waiting for prices to drop and then buying it back so I can return it to him when I move out. Wish me luck!

Edited August 3, 2018 by Dorkins