Real House Prices Graph On Hpc Home Page

[castroses]

Something that's been botherig me for a couple of weeks now.

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

Sorry - but game over ! No HPC I'm afraid. And NO I'm not a troll before the paranoids amongst you start - it's all there in black and white - well red and blue anyway!

(Disclaimer: Crappy 2 bed innercity (-futureghetto) new build flats obviously excepted)!!

[Woody Finch]

Something that's been botherig me for a couple of weeks now.

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

Sorry - but game over ! No HPC I'm afraid. And NO I'm not a troll before the paranoids amongst you start - it's all there in black and white - well red and blue anyway!

(Disclaimer: Crappy 2 bed innercity (-futureghetto) new build flats obviously excepted)!!

Have a look back at the graph and ask yourself: On what other occasions have we seen real stagnation following a boom? Oh dear...

[castroses]

Have a look back at the graph and ask yourself: On what other occasions have we seen real stagnation following a boom? Oh dear...

Yes - but it's different this time!

[Orbital]

Have a look back at the graph and ask yourself: On what other occasions have we seen real stagnation following a boom? Oh dear...

Prices rose to 1984, track the average for a couple of years. And then take off again. How about in 2000. Bit of stagnation and then up again. How about 2004, again went steady for a bit, then up again.

Do I win a prize?

Just goes to show you see what you chose to see!

Sure the obvious peaks and troughs are there. What the OP is saying is that we wont see one of those. Plenty of example where it hasnt just gone up then down. Sure at some point prices might drop. But is it part of this boom, or another one? For example, many agree that the post 2005 boom will wind back quite quicky. But its not going to drop down to the trough of 1996. I dont think. Well it could do. But with plenty of people still earning well that wouldnt be good for FTBs at all .

I look forward to checking back in 20 years, maybe we will see more nice little peaks and troughs. Have a look at the graph again, has there been such an increase for such a long period of time? Im not sure what will happen but things are different this time. Any fool can see that. Prices have risen higher for longer. That is adifference. Dur! Some people aint too bright lol!

For the record, i dont care either way. Just moving the converstation along ! I chose to invest in human capital and not bet my house lol!

Edited September 26, 2007 by Orbital

[Oliver Sutton]

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Trend is growing at around £3,300 a year so it would take 18 years. Perhaps only 15 years as the trend inflates. Try again.

[Bearfacts]

There is absolutley no chance of stagnation. When speculators realise that prices are staying flat ie falling in real term they will 1. Not buy anymore and 2. Sell those that they hold. This will cause a big jump in supply as demand is falling = crash. The die is cast now it is too late for anyother scenario.

[Guest vicmac64]

Yes - but it's different this time!

Its different OK - you've got that right - unfortunately the depression is now coming fast, who knows we may have runaway inflation, deflation or a myriad of other symptoms - but rest assured what we are left with will not be pretty. The graph will show decreases - mass unemployment is on the way, and with it will come the inevitable repossesions that will lead to a HPC of epic proportions.

[Woody Finch]

Prices rose to 1984, track the average for a couple of years. And then take off again. How about in 2000. Bit of stagnation and then up again. How about 2004, again went steady for a bit, then up again.

Do I win a prize?

Sure the obvious peaks and troughs are there. What the OP is saying is that we wont see one of those. Plenty of example where it hasnt just gone up then down. Sure at some point prices might drop. But is it part of this boom, or another one? For example, many agree that the post 2005 boom will wind back quite quicky. But its not going to drop down to the trough of 1996. I dont think. Well it could do. But with plenty of people still earning well that wouldnt be good for FTBs at all .

What Orbital was suggesting was a period of real stagnation for 7 years. There is nothing on the graph which indicates that that anything like that has ever happened before - particularly at the tail end of a period of strong growth.

I think what you're saying is that you can't tell from where we are whether it will go up or down (agreed) but the issue in question was whether there could be a long period of stagnation (plateauing) of HP. And there is no evidence that it has ever happened before.

[LargelyIgnorant]

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

How did you infer 'Point 2' from 'Point 1' ???

And look at the overshoot past mean each of the 3 last times

[castroses]

There is absolutley no chance of stagnation. When speculators realise that prices are staying flat ie falling in real term they will 1. Not buy anymore and 2. Sell those that they hold. This will cause a big jump in supply as demand is falling = crash. The die is cast now it is too late for anyother scenario.

BUT how mach of the market is made of speculators or BTL'ers??

Does anyone have that statistic - even approximately?

OF all the housing stock in UK - how much is owner occupied and how much llet out to rent?? I'd bet it's less than 20% of the total?

(Cheers for the support Orbital !)

[AteMoose]

Something that's been botherig me for a couple of weeks now.

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

Sorry - but game over ! No HPC I'm afraid. And NO I'm not a troll before the paranoids amongst you start - it's all there in black and white - well red and blue anyway!

(Disclaimer: Crappy 2 bed innercity (-futureghetto) new build flats obviously excepted)!!

Almost... if we get higher inflation 3 or 4 years stagnation would do it ;p

[Guest The_Oldie]

I think the graph on the homepage is out of date, the last Nationwide report shows a drop on that graph.

http://www.nationwide.co.uk/hpi/historical/Aug_2007.pdf

[Tiger Woods?]

Something that's been botherig me for a couple of weeks now.

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

Sorry - but game over ! No HPC I'm afraid. And NO I'm not a troll before the paranoids amongst you start - it's all there in black and white - well red and blue anyway!

(Disclaimer: Crappy 2 bed innercity (-futureghetto) new build flats obviously excepted)!!

The slope of the red line is skewed by the steep blue curve. If the blue curve dropped so the red line would flatten - the two graphs are far from independent.

[mattyboy1973]

The slope of the red line is skewed by the steep blue curve. If the blue curve dropped so the red line would flatten - the two graphs are far from independent.

exactly - the 'trend' cannot continue and is massively skewed by the current boom. If we are envisaging a return to longtime averages then the red line should be flat at 3.5 average earnings, or whatever.

as far as stagnation having not ocurred in the past - remember you are looking at a graph of real house prices. Stagnation in nominal terms for 7 years is a significant real drop and would look as such if it was appended to this graph.

matt

[DabHand]

The slope of the red line is skewed by the steep blue curve. If the blue curve dropped so the red line would flatten - the two graphs are far from independent.

Ding, we have a winner.

Castroses, why the userid? I can only find references to male stripping.

[PropertyGuru]

(Cheers for the support Orbital !) lick lick lick

jesus, what a brown-nosing little moron.

[quantinghome]

The slope of the red line is skewed by the steep blue curve. If the blue curve dropped so the red line would flatten - the two graphs are far from independent.

Absolutely. To be accurate the trend line needs to be based on a complete number of cycles - i.e. from one peak to another peak, or from a trough to a trough. At the moment the red line is based on data which starts at a trough and ends at a peak - it's bound to overestimate the growth rate.

[dogbox]

Prices rose to 1984, track the average for a couple of years. And then take off again. How about in 2000. Bit of stagnation and then up again. How about 2004, again went steady for a bit, then up again.

Exactly. Whilst I recognise a sharp price decline could be on the cards, driven by a lack of sub prime and self cert lending coupled with increased sub prime interest rates and a newbuild appartment mess, we also have to factor - in the balancing effects which might include a surge in lending on the back of reducing BOE rates and B2Lers taking advantage of recent rate rises coupled with lower mortgage rates - again if BOE drops rates.

Bust follows boom APPLIES TO PURE INVESTMENTS SURE, but property is not a pure investment, it has an intrinsic utility value unlike a tulip bulb

[FernandoMorientes]

In real terms the house prices could drop below the mean average before gaining momentum upwards again which is essentially what occurs in boom and bust, no one can deny there has been a huge boom in real estate so who can deny there is a chance of a bust? So the endless cycle of appreciation depreciation rolls on, some people just cannot bare the thought of the reality of this prospect though.

Prices rose to 1984, track the average for a couple of years. And then take off again. How about in 2000. Bit of stagnation and then up again. How about 2004, again went steady for a bit, then up again.

Do I win a prize?

Just goes to show you see what you chose to see!

Sure the obvious peaks and troughs are there. What the OP is saying is that we wont see one of those. Plenty of example where it hasnt just gone up then down. Sure at some point prices might drop. But is it part of this boom, or another one? For example, many agree that the post 2005 boom will wind back quite quicky. But its not going to drop down to the trough of 1996. I dont think. Well it could do. But with plenty of people still earning well that wouldnt be good for FTBs at all .

I look forward to checking back in 20 years, maybe we will see more nice little peaks and troughs. Have a look at the graph again, has there been such an increase for such a long period of time? Im not sure what will happen but things are different this time. Any fool can see that. Prices have risen higher for longer. That is adifference. Dur! Some people aint too bright lol!

For the record, i dont care either way. Just moving the converstation along ! I chose to invest in human capital and not bet my house lol!

[Guest d23]

jesus, what a brown-nosing little moron.

How's life in the ex Local Authority 'chateaux' PG?

[castroses]

jesus, what a brown-nosing little moron.

You want to step outside and say that? Don't think you do!

[geneer]

Something that's been botherig me for a couple of weeks now.

Look at the Real House Prices graph at the top of the Home tab. Now project that Red line (which I assume is some kind of historical average) at the same gradient and then project the blue fill area straight across - I reckon they'd meet after 7 years - 2014.

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

Sorry - but game over ! No HPC I'm afraid. And NO I'm not a troll before the paranoids amongst you start - it's all there in black and white - well red and blue anyway!

(Disclaimer: Crappy 2 bed innercity (-futureghetto) new build flats obviously excepted)!!

The trend line is heavily skewed by the current massive bubble.

A similarly large scale fall will make the long term trend shallower.

[Guest muttley]

Bust follows boom APPLIES TO PURE INVESTMENTS SURE, but property is not a pure investment, it has an intrinsic utility value unlike a tulip bulb

Just because houses have a use does not stop them becoming subject to speculative buying. Having an "intrinsic utility value" does not mean that the price can drop, only that it will not drop to zero.

[pmaupoil]

Doesn't that mean that if house prices stagnated for 7 years, ie didn't crash AT ALL then we would have a return to SENSIBLE (historically speaking) house prices?? I think it must or am I missing something?

If I'm right 7 years stagnation is what we'll have and then everything will be back to normal!!!!!

Yes you are definitely missing something, some basic knowledge of property demand and supply (income increase, employement stability and most importantly consumer confidence).

We have been in a strong speculative market for the past 5 years at least and now the global economy is going into recession, how would you expect prices to stagnate!

Anyway, property market affects EVERYONE so the buyer/seller confidence is even more important than any other market and that's why prices NEVER stagnate.

[dogbox]

now the global economy is going into recession,

It's definite is it?

I said it 2004, 2005 and 2006 on here, I'll say it again:

The world economy is expanding due to hitherto undeveloped nations joining the trek to industrialisation. UK benefits in many ways. I gave an example of how we export health and education expertise to the world - I was laughed off this site back in 2004.