Real House Price Graph

[coolaftershave]

Any one else noticed its been updated (Or am i the last to spot it.)

Can anyone explain whats going on there... looks like it may be a triple peak top. Its heading up slightly.

I heard that the double peak was a very dangerous creature that was funded by MEW and extended credit limits.

What about the 3rd peak?

----

I am amazed at how quickly news stories of recession and debt trouble are spreading on the mainstream news.

I remember when it was ALL positive positive positive!

Did anyone else see the early morning business analysis section on the BBC about the yield curve in America... and the presenter said that "technically" this means the US is heading for a recession? But at which point can you say a country is in recession?

Are we "technically" in for a HPC?

CAS.

Edited June 7, 2006 by coolaftershave

[theChuz]

perfect example of stagnation which many of us said was impossible or at the very least highly highly unlikely.

[look to the past]

HPI is likely to be 3% + ish this year

Stagnation or Crash is not happening Yet

[Realistbear]

HPI is likely to be 3% + ish this year

Stagnation or Crash is not happening Yet

Yes. A "triple top" can often be predictive of a market crash:

http://stockcharts.com/education/ChartAnal.../tripleTop.html

However, if the highs are within reasonable proximity and other aspects of the technical analysis picture jibe, it would embody the spirit of a triple top. The spirit is three attempts at resistance, followed by a breakdown below support, with volume confirmation.

What we are witnessing are attempts to break out of a range that are met with resistance each time price resistances kicks in. The market is set up for a sharp fall if the final attempt fails to break out of the range. Given the affordability issues the liklihood of a breakout to the upside looks remote. If you accept the "triple top" pattern the next move is downward--sharply.

[AteMoose]

its the fabled soft landing... but its slowly killing the high street and the economy. Im glad it has now been updated

Edited June 7, 2006 by moosetea

[look to the past]

A "triple top" can often be predictive of a market crash:

I may believe you if we were talking about the stock market

The housing market is a completely different animal –

90% + (a guess) of the participants are in it for the long run and most are emotionally attached

[Denzil]

But at which point can you say a country is in recession?

CAS.

I believe it is two consecutive quarters a negative GDP growth.

[BillyShears]

I may believe you if we were talking about the stock market

The housing market is a completely different animal –

90% + (a guess) of the participants are in it for the long run and most are emotionally attached

But market prices are set by those who sell. So how do people who don't sell up come into it?

Billy Shears

[padawan]

Are we "technically" in for a HPC?

CAS.

The only truthful answer anyone could give to this is maybe. Chart patterns are always obvious after the event has taken place. If prices dip again in the second half of the year the 'triple top' will be evident if not well it will be called something else.

I think there are so many fundamentals at play in the housing market it is nearly impossible to tell when it will correct/crash (but am hoping for sooner rather than later ).

[non-FTBer]

Yes. A "triple top" can often be predictive of a market crash:

http://stockcharts.com/education/ChartAnal.../tripleTop.html

However, if the highs are within reasonable proximity and other aspects of the technical analysis picture jibe, it would embody the spirit of a triple top. The spirit is three attempts at resistance, followed by a breakdown below support, with volume confirmation.

What we are witnessing are attempts to break out of a range that are met with resistance each time price resistances kicks in. The market is set up for a sharp fall if the final attempt fails to break out of the range. Given the affordability issues the liklihood of a breakout to the upside looks remote. If you accept the "triple top" pattern the next move is downward--sharply.

But volume is not as important for a fall as it is for a rise in reversal patterns.

I fully expect the market to fall towards the middle/end of this year, and if current economic pressures continue then I expect these falls to continue into 2007.

Is this a 'triple top', maybe... depends how you define it.

Is the housing market different to the housing market... yes, to a point.

But the more 'investment' in housing either by BTL or by OOs expecting capital growth, the more the housing market is likely to act like a stock market.

[HousePriceLottery]

Ok so the graph has gone flat, unexpected agreed.

However a true soft landing has to keep going until trend catches up. I am still sceptical that house prices can stay perfectly flat for the 20 years that would be required to do so. So I wouldn't put this down as a win for the soft landing brigade just yet.

In fact have you noticed, the words soft landing haven't been used for quite some time in the mainstream media. Certainly not as much as they were this time last year.

[IMupNorth]

In fact have you noticed, the words soft landing haven't been used for quite some time in the mainstream media. Certainly not as much as they were this time last year.

That's because things are starting to boom again, GDP up, exports up, house prices up.

[IMupNorth]

perfect example of stagnation which many of us said was impossible or at the very least highly highly unlikely.

Now, I decided after careful consideration 18 months ago to depart from the herd on here and say the market would stagnate.

I said its not impossible then and I still say this is the case now given the economic circumstances that underpin the housing market.

As far as I can see, after weighing the evidence that the market will continue to broadly stagnate for anything upto another two years at least.

You cannot say that it crashed before so it will crash again - its just not that automatic. What drives a crash, is the same thing that drives the boom and that is affordability.

The reason why the market has levelled out, is that we have for the time being reached roughly the level of maximum affordability.

You will need at least a hike of 1% in IRs to get a crash going and that is sooooo unlikely its not even worth considering.

Now, personally I'm seeing a lot of upward activity in asking prices and very little let up in transactions in my part of the world. However, I don't think this can be maintained for long and I still believe that prices will tend to oscillate by a few % around a level for the foreseeable future.

All I see on hear are the same old, failed bear arguments, regurtitated time after time and non of them stand up to examination in the real world.

[OzzMosiz]

But market prices are set by those who sell. So how do people who don't sell up come into it?

Billy Shears

A very good point. Look To The Past - any comments on this?

[Grossinquisitor]

A very good point. Look To The Past - any comments on this?

a permanent plateau is developing

maybe it's because of this

However, Roehner also stresses the limits of his and other such models: "Consider the London housing market," he says. "A year ago everybody (including myself) was convinced that the turning point had been reached and that prices would decline. In fact, over the last 12 months real estate prices in London have increased by 8%. What happened? As explained in a recent article published in the Economist, Gordon Brown [uK Chancellor of the Exchequer] has offered a governmental guarantee to banks and other lending institutions and devoted about $2 billion in subsidies to encourage buyers. Naturally, no model can take such events into account in advance."

http://physicsweb.org/articles/news/10/5/17/1

[music man]

QUOTE

However, Roehner also stresses the limits of his and other such models: "Consider the London housing market," he says. "A year ago everybody (including myself) was convinced that the turning point had been reached and that prices would decline. In fact, over the last 12 months real estate prices in London have increased by 8%. What happened? As explained in a recent article published in the Economist, Gordon Brown [uK Chancellor of the Exchequer] has offered a governmental guarantee to banks and other lending institutions and devoted about $2 billion in subsidies to encourage buyers. Naturally, no model can take such events into account in advance."

That's a lot of money to artificially support a falling market.

Will it make the crash quicker and more forceful? I hope so.

We living a lie here in the U.K.

[Magpie]

QUOTE

However, Roehner also stresses the limits of his and other such models: "Consider the London housing market," he says. "A year ago everybody (including myself) was convinced that the turning point had been reached and that prices would decline. In fact, over the last 12 months real estate prices in London have increased by 8%. What happened? As explained in a recent article published in the Economist, Gordon Brown [uK Chancellor of the Exchequer] has offered a governmental guarantee to banks and other lending institutions and devoted about $2 billion in subsidies to encourage buyers. Naturally, no model can take such events into account in advance."

That's a lot of money to artificially support a falling market.

Will it make the crash quicker and more forceful? I hope so.

We living a lie here in the U.K.

Except that that quote is Parisian balderdash - if you read the article he's referring to the shared ownership scheme which has done very little to support the UK market at all. In particular it has very little relevance to the slight increase in London prices this year. Perhaps he is simply grasping at straws to explain why he was wrong a year ago.

[othello]

I would never take too much notice of the Nationwide figures especially the headline index. Anecdotally prices are soft in many areas and as just posted on another thread, I have two friends whose properties have both lost value.

[music man]

Except that that quote is Parisian balderdash - if you read the article he's referring to the shared ownership scheme which has done very little to support the UK market at all. In particular it has very little relevance to the slight increase in London prices this year. Perhaps he is simply grasping at straws to explain why he was wrong a year ago.

Cool - but it still lets banks give easy credit without risk and thus allow the market to stay high and/or go higher. It's artificial and tinkers with natural market forces I believe.

As soon as banks are mentioned think about the control mechanisms of debt.

Edited June 7, 2006 by music man

[look to the past]

QUOTE(BillyShears @ Jun 7 2006, 12:46 PM)

But market prices are set by those who sell. So how do people who don't sell up come into it?

Billy Shears

A very good point. Look To The Past - any comments on this?

The market price is set by the estate agent (a supposed expert employed buy the vendor to get the best price for the property – who also has a vested interest in talking the market up) –

In my experience it appears that the seller knows very little about how much their own property is worth but expects to get more than anyone else in their road.

People will only expect less if they can see a reason for it – the average person knows nothing of a HPC and would not believe one is possible in a low inflation environment with high employment

[Magpie]

Cool - but it still lets banks give easy credit without risk and thus allow the market to stay high and/or go higher. It's artificial and tinkers with natural market forces I believe.

As soon as banks are mentioned think about the control mechanisms of debt.

I agree completely it's a dumb-ass scheme. I just think that Prof. Balderdash is completely wrong in claiming it has had such a massive impact on the London or UK market.

[kingofnowhere]

I agree completely it's a dumb-ass scheme. I just think that Prof. Balderdash is completely wrong in claiming it has had such a massive impact on the London or UK market.

Indeed.

The housing market, has about 1.3M transaction, for an average value of about 170K, so about £221,000,000,000 of transactions. The £2B scheme IIRC was spread over the 5 years, which he doesn't mention So About 400M per year.

Therefore this scheme, will only impact the UK housing market by 0.2% per year. To say London took off becuase of its introduction (and they also removed SIPPS), is frankly looking for excuses.

London took off, because its more affordable, after a couple of years of flat or falling prices. London and the SE is driving employment increases, and London city had a good year.

None of these will change over this or next year, therefore London/SE will continue to outperform the rest of the UK.

All IMHO of course

[Magpie]

The £2B scheme IIRC was spread over the 5 years, which he doesn't mention So About 400M per year.

Therefore this scheme, will only impact the UK housing market by 0.2% per year.

And that's if it's all taken up which (I may be wrong) is currently looking improbable. It's a drop in the ocean as things stand.

The moral is, never trust a French academic. They've all spent too much time reading Derrida and Barthes and live in la-la-land as a result...

Edited June 7, 2006 by Magpie

[Realistbear]

Gordon"s "Economic Miracle" consisting of HPI and consequential MEW to give the appearance of wealth has been based on one thing: cheap credit courtesy of Asia.

IR have been overly accomodative for several years with the result that we now have a bubble in housing among other things. It has been too easy for people to borrow and spend and inflated prices are the result.

IMO, the triple top that we see in the Nationwide Chart is a market trying to crash with a government bent on keeping the "Miracle" going by resisting IR hikes and manipulating inflation data to justify the same.

It is unquestionable that houses are too expensive as the multiples are higher than the Great Crash and FTBs are almost extinct. Stresses in the economy in the form of repossession and high debt levels are indicators of trouble brewing.

"Economic Miracles" do not work. They may exist for awhile but market forces eventually destroy them. None have ever survived and Gordon's is no different.

[apom]

That's because things are starting to boom again, GDP up, exports up, house prices up.

yup..

http://www.proviser.com/regional/towns/exe...es/price_trend/

Down to 2004 prices near me.

And on the street massive stagnation.

Properties are coming on the market. For sale signs going.. Coming back again.. Different agents..

We are unique..

Anyway.. I am of to london until this all sorts out.

Got bored waiting..

It is happening.. But it’s a slow business..

Of for some fun