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FTBagain

Cycle Phases Showing Up In The Data?

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It's a bit of a graph fest today so I thought I might as well chuck in my penneths worth.

Given that the various indices indicate different phases of the house selling process I have often wondered if it is possible to identify market sentiment from the data. The graph compares Haliwide and Rightmove data from 2003 up to today. I have identified the following:

Disbelief - because seller were effectively under priceing back in 04,

Greed - because sellers were pushing for ever higher prices in 07 despite many saying affordability was stretched to breaking point,

Denial - well I do not need to explain that do I.

YOY_July_08.jpg

post-1956-1215770118_thumb.jpg

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Given that the various indices indicate different phases of the house selling process I have often wondered if it is possible to identify market sentiment from the data.

YOY_July_08.jpg

I think you've got a good point there. But how do you identify the bottom? Would land registry or other 'sold' indexes add anything? On relection, I think that when the banks are willing to lend to one another and they are slowly clawing back profit, that will be the bottom. But to a degree, knowing the absolute bottom isn't important. Getting to a lower level then allows you to search for the property that suits you, location, size and price. I suspect many of these will only be available on death, divorce etc.

Edited by NorthamptonBear

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I think you've got a good point there. But how do you identify the bottom? Would land registry or other 'sold' indexes add anything? On relection, I think that when the banks are willing to lend to one another and they are slowly clawing back profit, that will be the bottom. But to a degree, knowing the absolute bottom isn't important. Getting to a lower level then allows you to search for the property that suits you, location, size and price. I suspect many of these will only be available on death, divorce etc.

I haven't really thought it all through yet but I suspect there could be away of identifying the bottom phase of the cycle. It could be when leading and lagging indices switch places e.g. on the way down the land registry will always give higher values as the market falls away from previous sale values. When the Haliwie and Land Reg data start to agree then we would probably be at the bottom, when they swap i.e. Haliwide go above Land Registry we are probably into recovery.

I might go have a dig and see if I can find some data to support these ideas. ;)

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  • 399 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%



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