There Has Never Been A Houseprice Crash Before

[kman]

I plotted the same data from nationwide as that used on the front page and look what I get? can someone explain?

[poppy10]

I plotted the same data from nationwide as that used on the front page and look what I get? can someone explain?

It would help if you posted a bigger picture so we could see the scales properly, but it looks like you have started the graph at 1992 - tha main crash period was 1989-1992, so you've missed all that out.

[kman]

It would help if you posted a bigger picture so we could see the scales properly, but it looks like you have started the graph at 1992 - tha main crash period was 1989-1992, so you've missed all that out.

http://www.nationwide.co.uk/hpi/historical.htm

got dat from above link

Edited July 29, 2006 by kman

[DabHand]

Its adjusted for inflation. i.e. If a house stays the same price for 10yrs nominally, over that time even at a 5% inflation rate the currency in which it is measured in would have lost approximately (if sums are right) 63% of its value. Therefore the house has also lost 63% of its value.

[Bubble Mixture]

You must have picked the wrong data - mine looks fine. Even the unadjusted figures show more action than yours.

Bit of an extrapolation to Never Been A Houseprice Crash Before!!!

[gfromls]

http://www.nationwide.co.uk/hpi/historical.htm

got dat from above link

Q3 1989 - £106,353

Q1 1996 - £66,891

thats what your data tells me pal.

[AteMoose]

there was definatly a crash, parents bought there detached house in yorkshire for 140k in 1990, it crashed down to around 90 to 100k over the next few years, the next door neighbours sold in 2001/2 for 160k. House prices took about 10 years to recover in most parts of the country. Everyone agrees prices crashed...

Edited July 29, 2006 by moosetea

[devslim]

What?? There was no crash?? I demand my money back.

[Badger]

F**k the graph, I bought my flat for 25k in 1994. 3 years earlier it was worth 80k.

[JJJ]

I plotted the same data from nationwide as that used on the front page and look what I get? can someone explain?

Yes. You've chosen post '91 data (that means 1991, the year). Try picking the data set that starts in the early seventies.

[werewolves]

Kman are you David Smith in disguise?

Edited July 29, 2006 by werewolves

[Guest grumpy-old-man]

I plotted the same data from nationwide as that used on the front page and look what I get? can someone explain?

amazing (unless your a troll, which I don't think you are)

that's why the hpc happens time after time I reckon.....modern culture, the young'uns don't talk to the old'uns anymore.....

I think that the large majority of bulls on this site are under 30 & therfore haven't gone through the 90's crash & therefore don't spot the signs. I will hazard a gues at your age: 26

after looking at the data/discussions on this & dr bubbs site I think we have a massive correction in store for us.

I definetly think we are in the crash right now. IMO of course.

[Yandros]

"Those who cannot remember the past are condemned to repeat it"

George Santayana

History is a grossly undervalued subject. It's why people can be lulled so easily into believing that the Holocaust never happened, and why survivors of the death camps still work in the museums there, saying "YES IT DID! I WAS THERE!".

Just think - if 'the youth of today' can start believing (or be conned into believing) than something didn't happen as recently as 15 years ago....

Scary times.

[Sarah Beeny!]

My cast-iron 'investment' went from £59 995 to £46 500, bought in 1988. People have short/selective memories.

[AteMoose]

talking to my gran todaty, my aunt bought her house in 1990 for 20k in middlesbrough... they only recovered to 20k by 2001/2 according to houseprices.co.uk (one sold for 16k in 2000). Today they sell for 80k!! Still cheap in relation to the rest of the country buy frightening and very late HPI. How low did they crash to? Did people stop buying altogether were they unsellable? is that why the stats are distorted in a crash? The funny thing is noone know how far they fell, my gran didnt think prices had fallen, and my aunt didnt know she was in negative equity.... If morgages get paid and people dont move its not a problem....

Short memories also means people have forgotton how cheap houses were from 1996->2000....

Edited July 29, 2006 by moosetea

[werewolves]

YOU NEED TO LOOK AT INFLATION ADJUSTED DATA KMAN!!

Bugger all point in comparing data across decades without adjusting for inflation. It's a fools errand.

A house worth £100 000 one years ago which is still worth £100 000 today has lost value. It is the same in nominal value but has lost 2.5% in real terms (2.5% CPI = Crap Price Index).

Inflation was knocking up to 8% in the late eighties. Thus a house staying the same nominal value over a year would have depreciated by 8%.

Anybody who doesn't understand this point should slap themselves with a wet rubber glove and read up on some basic economic principles.

Plot out the Nationwide inflation adjusted graph and you will see the housing market crashed 50% in real terms. Simple. You can do this by download the inflation adjusted data from Nationwide, which conveniently already has a graph.

I can't be bothered to write a tutorial on inflation as I'm off out to eat people...

Edited July 30, 2006 by werewolves

[Pablo-silver or lead?]

I feel like a stuck record

last time (boom 86 to Aug 88) the boom was led by the South. Many prices subsequently (bust Aug 88 to 94ish) halved. e.g. Studios top 52k ish - bottom unsaleable (they were competing with 2 bedders at 30K. New build Neo georgian 4 bed town houses 100 yards from the sea in a conservation area

1987= 245k

1988= 235k

1989= 200k

1990= 170k

1991= 160 to 120k

1992= 112 to 84k

From off plan new build sold at 245k to built new build sold at 92k (the £84k sale was a Halifax repo bought in 1989 for £215k by a flipper

who called bottom a bit early, about 3 years).

THIS TIME IT WILL BE DIFFERENT. The North has seen increases that make the south blush with nothing to support these increases now credit is tightening and affordibility drag sentiment down. I make a prediction you can hold me to. Prices of many properties in the North will fall over the next 4 years by up to half e.g. Crappy terraces in crappy areas of the N/W and N/E plus new build lux apartments.

The 'top' of the market has been much longer than last time, many, many more people have bought the wrong properties, at the wrong time, for prices which are disconnected from the real fundimentals that support value. Not even the Express headline writer can prevent the Northern led crash that we are about to experiance.

Pablo Silver or Lead

[apom]

YOU NEED TO LOOK AT INFLATION ADJUSTED DATA KMAN!!

Bugger all point in comparing data across decades without adjusting for inflation. It's a fools errand.

A house worth £100 000 one years ago which is still worth £100 000 today has lost value. It is the same in nominal value but has lost 2.5% in real terms (2.5% CPI = Crap Price Index).

Inflation was knocking up to 8% in the late eighties. Thus a house staying the same nominal value over a year would have depreciated by 8%.

Anybody who doesn't understand this point should slap themselves with a wet rubber glove and read up on some basic economic principles.

Plot out the Nationwide inflation adjusted graph and you will see the housing market crashed 50% in real terms. Simple. You can do this by download the inflation adjusted data from Nationwide, which conveniently already has a graph.

I can't be bothered to write a tutorial on inflation as I'm off out to eat people...

http://business.guardian.co.uk/story/0,3604,843624,00.html

Third, Mr King is nervous that homeowners may not realise that although low interest rates make mortgage repayments affordable, high inflation will not erode the value of their borrowing, as it did in the 1970s - and when they do catch on, house prices will plunge.

[Guest grumpy-old-man]

talking to my gran todaty, my aunt bought her house in 1990 for 20k in middlesbrough... they only recovered to 20k by 2001/2 according to houseprices.co.uk (one sold for 16k in 2000). Today they sell for 80k!! Still cheap in relation to the rest of the country buy frightening and very late HPI. How low did they crash to? Did people stop buying altogether were they unsellable? is that why the stats are distorted in a crash? The funny thing is noone know how far they fell, my gran didnt think prices had fallen, and my aunt didnt know she was in negative equity.... If morgages get paid and people dont move its not a problem....

Short memories also means people have forgotton how cheap houses were from 1996->2000....

Moosetea, I am from Stockton, which is equally sh1te as the Boro ( Liverpools cousin ) due to lack of work, high crime rates....

anyway, I remember houses going for sale for 2k in boro & they still couldn't sell, obviously these were extreme council estates where the fire service had armed police with them (I am not joking).

I bought my first house for 19k (we did get it a bit cheaper than normal) in 1989/1990 & sold for 33k a year later having only invested 1k. We STR not out of planning as I had no idea we were in a HPC, the same house 2 years later was on the market for 23k & couldn't sell

work that out as a % & it still didn't sell. The property wasn't in a really bad area either, but was probably nearer the bottom than the middle if you get my meaning.

We moved to Wakefield in 2000 & bought a new build 3 bed semi in a decent area for 76k, sold 2 years later for 135k

They are now going for 150k for a 2 bed This is 1st time buyers territory bedroom wise/house size.......this is just stupid. People need to stand back & think about what they are actually paying for these sh1te new builds. These are the houses that will get hit the hardest IMO.

Early 2007 I reckon will be the true start of the HPC although we are in it now.

[Waiting Patiently]

The title of this thread is nonsensical and highly misleading and seems to be another desperate attempt to rewrite history.

I can assure 'younger readers' that there most certainly was a house price crash between 89/95 and a big one.

I bought a house in the north-west for £125k in 89 and 3 years later in 92 it was valued at £80k. The same thing was happening round most of the country with over 50% reductions on 89 prices being seen in some areas in the early/mid-nineties. It wasn't until around 1999/2000 that prices recovered to 89 levels.

Interest rates were higher then but debt levels were miniscule to what they are now and the house price bubble is even bigger this time.

[kman]

The title of this thread is nonsensical and highly misleading and seems to be another desperate attempt to rewrite history.

I can assure 'younger readers' that there most certainly was a house price crash between 89/95 and a big one.

I bought a house in the north-west for £125k in 89 and 3 years later in 92 it was valued at £80k. The same thing was happening round most of the country with over 50% reductions on 89 prices being seen in some areas in the early/mid-nineties. It wasn't until around 1999/2000 that prices recovered to 89 levels.

Interest rates were higher then but debt levels were miniscule to what they are now and the house price bubble is even bigger this time.

Sorry chaps wasn't trying tomislead anyone, just plotted the data and couldn't figure oput why it didn't resemble the chart on the homepage. Do you think that many folks have just been phycologically condition to big numbers? I recall in 2003 my mate bought a house for 260k, I nearly fell off my chair, he sold it 12 months later as is without doing anything to it for 315k and now would probably sell for 360k. We are just being conditioned to higher and higher numbers, will this in itself prevent houses from falling as sellers will be reluctant to reduce prices?

[DabHand]

Do you find it odd therefore that the nominal graph doesnt show these massive nominal drops and posters like magpie (with all due respect maggie) can write generally unchallenged posts about nominal drops being rare.

[JJJ]

Sorry chaps wasn't trying tomislead anyone, just plotted the data and couldn't figure oput why it didn't resemble the chart on the homepage.

Everyone understands now, right? It's important that people know how to review past data.

[Broken Fan]

Everyone understands now, right? It's important that people know how to review past data.

Reviewing past data and looking forward ytou can draw a straight line through the peaks and trooughs of the home page graph. Simple extrapolation shows a drop of av house prices to £80000 in about 10-12 years and the next peak of hp in 35-40 years with av hp of £310-340K. Does that make sense to people and if so anyone thinking of snapping up a few cheap properties after the crash, for a bit of capital gains has a few years to wait before the cash comes in, although when it does the gains will be tidy. Or possibly the difference this time round is that we will never see hpi again like we just have. ( all £ in 2006 £)

[IamSpartacus]

Reviewing past data and looking forward ytou can draw a straight line through the peaks and trooughs of the home page graph. Simple extrapolation shows a drop of av house prices to £80000 in about 10-12 years and the next peak of hp in 35-40 years with av hp of £310-340K. Does that make sense to people and if so anyone thinking of snapping up a few cheap properties after the crash, for a bit of capital gains has a few years to wait before the cash comes in, although when it does the gains will be tidy. Or possibly the difference this time round is that we will never see hpi again like we just have. ( all £ in 2006 £)

Try doing the same thing back in time and see what house prices were like 100 years ago...