Jump to content
House Price Crash Forum
Sign in to follow this  
Ski Bum

House Prices Crash By 45% !

Recommended Posts

This was the claim made by David Pannell (Durlacher) in feb 2004 and is listed on the front page of HPC under House Price Predictions. He forecast that this would happen by feb 2006. Its obviously not happened and hes wrong.

Also the Economist forecast back in 2003 that prices would fall by up to 25%. They admitted in Dec 2005 that this was one of their bigger mistakes (see The World in 2006).

Also Rodger Bootle famously went back on his forecast of a 20% fall and lowered this to 5% at the end of last year. All of these are still listed on the HPC front page.

So the economists have been proved wrong to date and the VIs who forecast modest increases look likely to win the day.

Can we remove or ammend these forecasts which didnt happen please?

Share this post


Link to post
Share on other sites

Can we remove or ammend these forecasts which didnt happen please?

Timing is very difficult to predict... wait and see. :)

Share this post


Link to post
Share on other sites

This was the claim made by David Pannell (Durlacher) in feb 2004 and is listed on the front page of HPC under House Price Predictions. He forecast that this would happen by feb 2006. Its obviously not happened and hes wrong.

Also the Economist forecast back in 2003 that prices would fall by up to 25%. They admitted in Dec 2005 that this was one of their bigger mistakes (see The World in 2006).

Also Rodger Bootle famously went back on his forecast of a 20% fall and lowered this to 5% at the end of last year. All of these are still listed on the HPC front page.

So the economists have been proved wrong to date and the VIs who forecast modest increases look likely to win the day.

Can we remove or ammend these forecasts which didnt happen please?

Personally i think we should leave them up for as long as possible because it will serve as a reminder that not all things plan out as expected. I think of HPC as a big historic reference for the future when we have witnessed another boom and followed by the start of another crash. :)

Share this post


Link to post
Share on other sites

It's been a war between economic fundamentals, common sense and VI's and the media.

Guess who won the battle

For now yes, the battle is not over yet!

Share this post


Link to post
Share on other sites

This was the claim made by David Pannell (Durlacher) in feb 2004 and is listed on the front page of HPC under House Price Predictions. He forecast that this would happen by feb 2006. Its obviously not happened and hes wrong.

Also the Economist forecast back in 2003 that prices would fall by up to 25%. They admitted in Dec 2005 that this was one of their bigger mistakes (see The World in 2006).

Also Rodger Bootle famously went back on his forecast of a 20% fall and lowered this to 5% at the end of last year. All of these are still listed on the HPC front page.

So the economists have been proved wrong to date and the VIs who forecast modest increases look likely to win the day.

Can we remove or ammend these forecasts which didnt happen please?

:angry:

Are you nuts?

:blink:

These are the foundations of this website. Without these foundations, there'd be nothing to argue about. How will bulls be able to show they're right if these are removed?

The fact that there aren't many recent crazy headlines like these is a side issue or just an admission that things are certainly different this time for some reason or another (as many know, IMO it's THA 1988/1996 & the AST).

Now go find another bone to chew!

Share this post


Link to post
Share on other sites

There is always a gap between the point at which a market detaches from its rational fair value to the point at which irrational sentiment can carry it.

Guessing how long something irrational can continue by definition is not an exact science and economists - being often very rational machines - usually make the call too early.

Markets have strong momentum tendencies, and the housing market in particular has very strong tendencies to allow sentiment to keep it moving upwards. The period of defying gravity will tend to be longer, and less predictable.

It's an interesting observation that in the later stages of bubble markets criticism often becomes muted as previously bearish predictions have been 'proven wrong' - I think we're around that stage now.

JJ

Share this post


Link to post
Share on other sites

Timing is very difficult to predict... wait and see. :)

Well not much use without timing is it?!?

OK I'll have some non timed predictions

The FTSE will reach 10,000

Gold will fall 30%

The average UK house will hit £1M

The FTSE will fall 15%

The average UK house will rise 25%

The average UK house will fall 15%

Oil Will hit $100 a barrel

Oil prices will fall 40%

This is easy isn't it!

Share this post


Link to post
Share on other sites

This was the claim made by David Pannell (Durlacher) in feb 2004 and is listed on the front page of HPC under House Price Predictions. He forecast that this would happen by feb 2006. Its obviously not happened and hes wrong.

Also the Economist forecast back in 2003 that prices would fall by up to 25%. They admitted in Dec 2005 that this was one of their bigger mistakes (see The World in 2006).

Also Rodger Bootle famously went back on his forecast of a 20% fall and lowered this to 5% at the end of last year. All of these are still listed on the HPC front page.

So the economists have been proved wrong to date and the VIs who forecast modest increases look likely to win the day.

Can we remove or ammend these forecasts which didnt happen please?

I agree.

These predictions were wrong and should be removed not least because they are now irrelevant, but more importantly, because they are a constant reminder of unfulfilled promises of yesteryear.

I was utterly seduced by the attached graph. Hopes dashed on the rocks of vested interest power and governmental economic suicidal tendencies.

_41276317_house_070705_gra203.gif

post-67-1146755688.gif

Share this post


Link to post
Share on other sites

Well not much use without timing is it?!?

OK I'll have some non timed predictions

The FTSE will reach 10,000

Gold will fall 30%

The average UK house will hit £1M

The FTSE will fall 15%

The average UK house will rise 25%

The average UK house will fall 15%

Oil Will hit $100 a barrel

Oil prices will fall 40%

This is easy isn't it!

But your predictions are detached from any form of grounding - being random numbers that history will at some point in the future fulfill.

The predictions on houses prices that have been made by the Economist et al is that they will fall during this market cycle, that this is the next stage of the market cycle and that this will be relatively soon. Which is much more specific.

Share this post


Link to post
Share on other sites

everything runs in cycles, if you look into the data in detail you will see the short term and long term cycles in action. The market changed in 2004, has the market changed again? Is the country awash with spare money? or are the last drops being sucked up? The fundimental basis of HPC is the average man statistically can afford to buy an average house... can this happen at the moment...

Yes if it is an average couple and the buy IO and get a 6x->8x salary multiple.

10 years ago a single person on an average salary could afford an above average property

HP cycles mean the price of houses will bounce between these two extreems...

Edited by moosetea

Share this post


Link to post
Share on other sites

But your predictions are detached from any form of grounding - being random numbers that history will at some point in the future fulfill.

The predictions on houses prices that have been made by the Economist et al is that they will fall during this market cycle, that this is the next stage of the market cycle and that this will be relatively soon. Which is much more specific.

if Gordon Brown can move the goalposts, why can't we ??

Share this post


Link to post
Share on other sites

everything runs in cycles, if you look into the data in detail you will see the short term and long term cycles in action.

What have property prices done over "the long term cycle", would you say?

Share this post


Link to post
Share on other sites

What have property prices done over "the long term cycle", would you say?

The longest cycle gone up at about 2.5% per year against inflation, as population declines they will decline in a similar way, im guessing from about 2025 onwards..

The 15 year cycle they have boomed and bust by about 50%

Short term cycle appears to be 2-3 years, hardly noticable unless you look at the YOY change HPI

Edited by moosetea

Share this post


Link to post
Share on other sites

:angry:

Are you nuts?

:blink:

These are the foundations of this website. Without these foundations, there'd be nothing to argue about. How will bulls be able to show they're right if these are removed?

The fact that there aren't many recent crazy headlines like these is a side issue or just an admission that things are certainly different this time for some reason or another (as many know, IMO it's THA 1988/1996 & the AST).

Now go find another bone to chew!

Uh-huh... so HPC beliefs are based solely on a couple of predections are they. Sigh.

TSSR.

Share this post


Link to post
Share on other sites

Well not much use without timing is it?!?

OK I'll have some non timed predictions

The FTSE will reach 10,000

Gold will fall 30%

The average UK house will hit £1M

The FTSE will fall 15%

The average UK house will rise 25%

The average UK house will fall 15%

Oil Will hit $100 a barrel

Oil prices will fall 40%

This is easy isn't it!

The biggest surprise about this HP cycle is that every tom, Dick and Harry's prediction of 8 to 10 % HPI is coming true while serious economics are being shocked with surprises. This tells how much sentiments rule over economic fundamentals when it comes to house prices, and hence I am more than convinced that when (? put any date here) the correction would happen it would be much more severe than any of us would have thought of.

Share this post


Link to post
Share on other sites

Well not much use without timing is it?!?

OK I'll have some non timed predictions

The FTSE will reach 10,000

Gold will fall 30%

The average UK house will hit £1M

The FTSE will fall 15%

The average UK house will rise 25%

The average UK house will fall 15%

Oil Will hit $100 a barrel

Oil prices will fall 40%

This is easy isn't it!

Ok, timing is difficult. But can you predict what order the above will happen in?

Share this post


Link to post
Share on other sites

I predicted these on the BBA approval thread:

1. March BoE NSA at 140k using BBA data – actual 143, 2% out.

2. March BoE SA at 125k, actual 116k, so 7% out – underestimated the unusually large 19% SA applied; last year was only 11%. Explanation is that the large dip in 2005, when HPI was at its lowest, is being “read” into the SA for technical reasons – this can also be seen in the SA for Halifax.

The point is that you learn to tweak your understanding in the light of the experience.

Share this post


Link to post
Share on other sites

Personally i think we should leave them up for as long as possible because it will serve as a reminder that not all things plan out as expected. I think of HPC as a big historic reference for the future when we have witnessed another boom and followed by the start of another crash. :)

You obviously have a grasp on the finer points of chaos Chuzzie.

There is this ridiculous assumption that because we have identified patterns we can also identify the minutae. The fact is, no two situations are ever the same, but overall dynamics within a system tend to generate fairly stable patterns with unpredictable but generally inconsquential random variations - time is a particularly difficult parameter to fully predict since it is contingent upon no manipulation of events.

Share this post


Link to post
Share on other sites

I have noticed that the list of predictions on the front page of HPC does not include the prediction by the arch doom-monger "Fred Harrison", the person who wrote the book "Boom Bust, house prices, banking and the depression of 2010", who said in his book that house prices will fall in real terms from the peak by 20%.

Many STRs are now pinning all their hopes on the prediction by Fred Harrision, but a fall in house prices by 20% is really such a puny amount given that house prices have trebled in ten years that it probably goes some way in explaining why his prediction is not included in the list of predictions on HPC because it is so disappointingly small that it will barely cover the transaction costs of the STRs.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.