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Mikhail Liebenstein

How Many Years Of Unsold Stock In Your Area

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http://www.housepricecrash.co.uk/forum/ind...showtopic=81818

The above topic is one I posted on the regional forum for surrey, but following some interest from jethrotull into doing a similar thing for Sussex and finding the result of interest, I thought it might be worth putting on the main fourm.

In essence the idea is to take a given price range (in our case we did homes over £1m) and see how many homes are for sale in your area in the bracket, so perhaps use rightmove or primelocation etc - there may be some duplication due to multiagency, but it will give a feel and if you are really determined I guess you could count excluding the repeat entries.

The next step is use www.houseprices.co.uk to find out how many homes in your area have sold over a given period. Generally the data on www.houseprices.co.uk is back to 2000, so effectively if you start counting down from the first entry in your range which might be entry number 60 say and then click through to just below the range say number 780, the difference being 780-60 = 720 is how many homes sold in that timeframe. The site makes this easy as it put an index number 1 through to N by each entry.

Anyway from doing this we have found the following:

Surrey: currently available stock (well actually a few weeks ago) over £1m is about 2000, properties sold in the last 8 years for more than £1m 3287

This is about 5 years worth of stock that currently available at normal market clearing rates, of course things are slower now, at half the normal rate it could take 10 years to clear, unless of course prices drop massively :lol:

Sussex: about 600 listed at £1m or more currently, and since the year 2000, only 654 have sold for over £1m

This is about 8 years worth of stock at normal rates that is currently available. Again with the market slowing to half its normal rate, it could take 16 years to clear the backlog, unless of course prices drop massively :lol:

I appreciate this is not 100 percent scientific and perhaps I should be using a deflater of some sort on the data, but I think it gives a pretty good feel as in practice wages won't be up hugely over that period.

Edited by mikelivingstone

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<a href="http://www.housepricecrash.co.uk/forum/index.php?showtopic=81818" target="_blank">http://www.housepricecrash.co.uk/forum/ind...showtopic=81818</a>

The above topic is one I posted on the regional forum for surrey, but following some interest from jethrotull into doing a similar thing for Sussex and finding the result of interest, I thought it might be worth putting on the main fourm.

In essence the idea is to take a given price range (in our case we did homes over £1m) and see how many homes are for sale in your area in the bracket, so perhaps use rightmove or primelocation etc - there may be some duplication due to multiagency, but it will give a feel and if you are really determined I guess you could count excluding the repeat entries.

The next step is use www.houseprices.co.uk to find out how many homes in your area have sold over a given period. Generally the data on www.houseprices.co.uk is back to 2000, so effectively if you start counting down from the first entry in your range which might be entry number 60 say and then click through to just below the range say number 780, the difference being 780-60 = 720 is how many homes sold in that timeframe. The site makes this easy as it put an index number 1 through to N by each entry.

Anyway from doing this we have found the following:

Surrey: currently available stock (well actually a few weeks ago) over £1m is about 2000, properties sold in the last 8 years for more than £1m 3287

This is about 5 years worth of stock that currently available at normal market clearing rates, of course things are slower now, at half the normal rate it could take 10 years to clear, unless of course prices drop massively :lol:

Sussex: about 600 listed at £1m or more currently, and since the year 2000, only 654 have sold for over £1m

This is about 8 years worth of stock at normal rates that is currently available. Again with the market slowing to half its normal rate, it could take 16 years to clear the backlog, unless of course prices drop massively :lol:

I appreciate this is not 100 percent scientific and perhaps I should be using a deflater of some sort on the data, but I think it gives a pretty good feel as in practice wages won't be up hugely over that period.

Hi Mike,

I was going to say is 2000 a good starting point, because obviously there are more million pound houses now than then due to the HPI.

But then I thought, if lending goes back to normality, why would they sell in the numbers they sold in 2006-7 for instance.

Interesting, and a worry for those selling at over a million. I see you have already done surrey, so my contribution os not required. :)

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Hi Mike,

I was going to say is 2000 a good starting point, because obviously there are more million pound houses now than then due to the HPI.

But then I thought, if lending goes back to normality, why would they sell in the numbers they sold in 2006-7 for instance.

Interesting, and a worry for those selling at over a million. I see you have already done surrey, so my contribution os not required. :)

Hi Bob, yes it was quite a difficult one to call. I think you are right that if lending standards return to the old ways then it is not a bad approach, though it might still be a fair bit out due to the fact salaries will on average be up to 24% higher over that period. I guess this issue is one of salary distribution curves and so is rather complex to correct for, eg if I did the same study between £250k and £300k, I'd have to see how big the shift in the number of people being able to afford that range now versus 2000.

That said, another approach might be to assume that there is little change between consecutive years, so perhaps we could look at the number of houses sold in that range in 2007, clearly the number will always be substantially less than when compared with the 8 year range, but the salary effect will be less pronounced over that period. I can probably have a go at doing this, though from the houseprices.co.uk website it could take a while as I'll need to cut and paste all the entries over £1m into Excel and then sort by date.

Edited by mikelivingstone

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I have a much simpler way of working this out. I looked at Romsey, in Hampshire.

Going on to houseprice website I looked at how many properties had been sold so far in 2008 - it is 111. In the same period (1st Jan to 20th July) of 2007 - 374 were sold.

Now looking at Right move there are 261 properties for sale. So without anyone else putting their houses up for sale we already have over a years worth to sell going by sales volume for 2008.

Does this make sense - just seems a very easy way to do it and compares like with like.

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I have a much simpler way of working this out. I looked at Romsey, in Hampshire.

Going on to houseprice website I looked at how many properties had been sold so far in 2008 - it is 111. In the same period (1st Jan to 20th July) of 2007 - 374 were sold.

Now looking at Right move there are 261 properties for sale. So without anyone else putting their houses up for sale we already have over a years worth to sell going by sales volume for 2008.

Does this make sense - just seems a very easy way to do it and compares like with like.

Old enough to know better, yes your method would work and is similar to the comparison with 2007 method I suggest later, though in both these cases we are using more short term term data and so theremight be more volatility in the numbers. The one thing that Bob said about my original method that interested me was that he thought it was wrong at first, but then decided that it may actually capture the effect of tightened lending standards, ie back in 2000 fewer people could get £million mortgages because actually fewer banks would lend that sort of money. Whilst since then incomes may have risen 20% or so, it probably hasn't greatly increased the overall number of people who can make a new purchase of a million pound house (without at least trading in their old million pound house).

So my gut feeling is both methods have some validity, with one being closer to the current market and recent lending practices, and the other giving more of a perspective on more traditional lending standards (but needing some quite clever correction for salary distribution curves, ie looking at people who can afford £1m plus, it is no good looking at how many could have afford £600k 5 years ago, but rather what percentage of the population have moved into a salary bracket where a £m house is now affordable).

Anyway, from looking at both approaches, it is pretty clear to me that if you own a house that you think is worth more than £1m, you are extremely unlikely to sell it. So in practice you £1m home, is probably worth just £600k, ie the prices of all £1m homes need to drop so that the slide down the income and wealth distribution curves to such a point that a sufficiently large number of people can afford them.

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Liverpool, L1 and L3, prime 2-bed-flat territory.

L1:

Properties on Rightmove: 157.

Date of 157th sale on Houseprices.co.uk: 29 June 2007

L3:

Properties on Rightmove: 441.

Date of 441st sale on Houseprices.co.uk: 29 May 2007

Edited by pppeter

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I have a much simpler way of working this out. I looked at Romsey, in Hampshire.

Going on to houseprice website I looked at how many properties had been sold so far in 2008 - it is 111. In the same period (1st Jan to 20th July) of 2007 - 374 were sold.

Now looking at Right move there are 261 properties for sale. So without anyone else putting their houses up for sale we already have over a years worth to sell going by sales volume for 2008.

Does this make sense - just seems a very easy way to do it and compares like with like.

It is a good idea, but the drawback is that it takes a while for property to get into the LR figures and onto houseprices.

For instance in our postcode area, 1st May had 5 properties sold in March. 1st June had around 17 sold in March.

I think we would only be able to look back reliably at a month after 9/12months have passed.

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You would need to factor in the rise in population now and the popularity with second home ownership...... and don't forget those buy to let folks are always looking for a bargain. These three factors may help push sales along a little quicker when (or if) the housing market bottleneck frees up.

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You would need to factor in the rise in population now and the popularity with second home ownership...... and don't forget those buy to let folks are always looking for a bargain. These three factors may help push sales along a little quicker when (or if) the housing market bottleneck frees up.

Not sure population per se is a factor, unless they are earning enough to get a mortgage and have a reasonable deposit...

With figures on how long people could last if they lost their job showing an average of 2 months (I think), people right now aren't goinig to be stretching themselves I suspect, and that memory lingers for a while after the economy recovers (well it did in the last recession, anyway).

I think BTL will go back to being the province of the professionals very shortly. the amateurs don't know a bargain, because they think any price is a good price to pay, because tomorrow it will be going up. the first sign of a lull in the drop and they will buy in and ruin themselves. That is the price for unshakeable blind faith I am afraid.

I am also interested to hear how second homes will not drop as much as first ones. My view would be as people tighten their belts, there will be a glut of unsellable properties; look to Florida for an example of this.

Sorry, taking this off topic a little here.

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you should include empty lets. these will soon be on the market when the next IR rise arrives. this year.

As much as I would welcome an interest rate rise, I don't believe that nice Mr Brown at number 10 will allow it. ;)

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Cambridge

Properties for sale on Rightmove c. 900 (doesn't include developers' multiples).

Sales in last quarter (source BBC) = 272

900 / 272 = 3.3 quarters of stock = 10 months roughly.

According to MoneyWeek today, there are in the US

"A full 18.6m properties stood vacant in the past three months, while in June, there was 11.1 months’ supply on the market."

and

"A balanced market, the NAR says, is five to six months’ supply."

Looks like we're on a par with the great American house price crash here in Cambridge, ENGLAND.

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Cambridge

Properties for sale on Rightmove c. 900 (doesn't include developers' multiples).

Sales in last quarter (source BBC) = 272

900 / 272 = 3.3 quarters of stock = 10 months roughly.

According to MoneyWeek today, there are in the US

"A full 18.6m properties stood vacant in the past three months, while in June, there was 11.1 months’ supply on the market."

and

"A balanced market, the NAR says, is five to six months’ supply."

Looks like we're on a par with the great American house price crash here in Cambridge, ENGLAND.

Redwing, that is interesting. Whilst 10 months of stock does not sound so bad, I wonder if that is across the whole price range. In particular I wonder if the higher valueCambridge market is similar to what we have seen for Surrey and Sussex, if it is then I smell the scent of panicking babyboomers and city types. Cambridge is interesting as a lot of City types live there, it has a good train service and better quality of life than London.

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<a href="http://www.housepricecrash.co.uk/forum/index.php?showtopic=81818" target="_blank">http://www.housepricecrash.co.uk/forum/ind...showtopic=81818</a>

Sussex: about 600 listed at £1m or more currently, and since the year 2000, only 654 have sold for over £1m

This is about 8 years worth of stock at normal rates that is currently available. Again with the market slowing to half its normal rate, it could take 16 years to clear the backlog, unless of course prices drop massively :lol:

I appreciate this is not 100 percent scientific and perhaps I should be using a deflater of some sort on the data, but I think it gives a pretty good feel as in practice wages won't be up hugely over that period.

I think you might be making a mistake in correlating the available stock to the rate of exchange. You need a reference point to say whether that available stock has increased, or decreased, relative to the rate of exchange (or in absolute terms), not a one off measure. It does sound like a lot I agree but those numbers dont prove that it is on their own, at least as far as I can see. Or maybe are there well known normal levels that I'm not aware of?

Edited by Fraccy

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Redwing, that is interesting. Whilst 10 months of stock does not sound so bad, I wonder if that is across the whole price range. In particular I wonder if the higher valueCambridge market is similar to what we have seen for Surrey and Sussex, if it is then I smell the scent of panicking babyboomers and city types. Cambridge is interesting as a lot of City types live there, it has a good train service and better quality of life than London.

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Ok, I admit to being baffled on this. From rightmove for the whole of Cambridgeshire I got 86 properties over £1m, and 56 on primelocation. I did expect more.

Checking www.houseprices.co.uk, I found 162 properties sold over £1m in the last 8 years, average of 20.25 per year.

So on that basis, there may be 3 - 4.5 years worth of £1m+ homes for sale in Cambridgeshire.

Edited by mikelivingstone

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Ok, I admit to being baffled on this. From rightmove for the whole of Cambridgeshire I got 86 properties over £1m, and 56 on primelocation. I did expect more.

Checking www.houseprices.co.uk, I found 162 properties sold over £1m in the last 8 years, average of 20.25 per year.

So on that basis, there may be 3 - 4.5 years worth of £1m+ homes for sale in Cambridgeshire.

Sorry. I only read the thread title and gave an answer. I didn't realise we were supposed to be only discussing the top end.

My figures above are ALL house for sale and ALL houses sold in the last quarter to get a stock ratio of ALL houses to ALL sales per calendar month.

[by 'houses' I mean 'properties.]

Frankly, above about half a mill round here you're getting into very small sample sets where the real value of anything is really difficult to gauge.

People pay millions for Picassos when you can buy a photograph of one for about 50p.

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Sorry. I only read the thread title and gave an answer. I didn't realise we were supposed to be only discussing the top end.

My figures above are ALL house for sale and ALL houses sold in the last quarter to get a stock ratio of ALL houses to ALL sales per calendar month.

[by 'houses' I mean 'properties.]

Frankly, above about half a mill round here you're getting into very small sample sets where the real value of anything is really difficult to gauge.

People pay millions for Picassos when you can buy a photograph of one for about 50p.

Hi Redwing, I wasn't just about the high end, the more interesting bit can be the mid ranges and especially where there are a set or properties just above a price gap.

I don't know the Cambridge market well enough, but I picked Surrey homes over £1m, more because I am personally more interested in homes between £650-£900k where there seems to be substantially fewer on offer. Essentially I'd call it a an overhang analysis, a bit like one of those coin shoving arcade games. My suspicion is that all the £1m-£1.5m advertised homes are worth nothing of the sort and the stock of them is piling up (which I think I have proved) which means eventually they will come falling down and I can collect my winnings.

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I have just been trying to produce a graph showing house for sale in given ranges versus the historic numbers sold in those ranges.

All ok for the current sales as primelocation and right move let me count the range easily. I am stuggling though with the historic data, any ideas?

I used www.houseprices.co.uk and unfortunately it just gives one long set of data with 1/4 million entries. I don't fancy trying to search all that by hand.

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Here is my new improved chart.

To get the data from houseprices.co.uk, I twigged I could hand edit the URL to jump lots of pages and get to the transition points between prices ranges. As all the individual entries have an index number calculating the number of houses in a given price range then became very easy.

Anyway from my chart I can conclude that in the lower end market within Surrey, the level of stock is actually low compared with the annual average rate of sales (I took this over 8 years). My feeling here is that volumes were actually very high during the by to let boom and perhaps this market is more fluid, does that mean people are forces to drop their prices more quickly.

The high end is weird, basically if you own a house you think is worth over £1m, you stand almost zero chance of selling it. Clearly the boom has run to far and we are looking at almost 6 years worth of stock unsold - how bizarre is that.

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<a href="http://www.housepricecrash.co.uk/forum/index.php?showtopic=81818" target="_blank">http://www.housepricecrash.co.uk/forum/ind...showtopic=81818</a>

The above topic is one I posted on the regional forum for surrey, but following some interest from jethrotull into doing a similar thing for Sussex and finding the result of interest, I thought it might be worth putting on the main fourm.

In essence the idea is to take a given price range (in our case we did homes over £1m) and see how many homes are for sale in your area in the bracket, so perhaps use rightmove or primelocation etc - there may be some duplication due to multiagency, but it will give a feel and if you are really determined I guess you could count excluding the repeat entries.

The next step is use www.houseprices.co.uk to find out how many homes in your area have sold over a given period. Generally the data on www.houseprices.co.uk is back to 2000, so effectively if you start counting down from the first entry in your range which might be entry number 60 say and then click through to just below the range say number 780, the difference being 780-60 = 720 is how many homes sold in that timeframe. The site makes this easy as it put an index number 1 through to N by each entry.

Anyway from doing this we have found the following:

Surrey: currently available stock (well actually a few weeks ago) over £1m is about 2000, properties sold in the last 8 years for more than £1m 3287

This is about 5 years worth of stock that currently available at normal market clearing rates, of course things are slower now, at half the normal rate it could take 10 years to clear, unless of course prices drop massively :lol:

Sussex: about 600 listed at £1m or more currently, and since the year 2000, only 654 have sold for over £1m

This is about 8 years worth of stock at normal rates that is currently available. Again with the market slowing to half its normal rate, it could take 16 years to clear the backlog, unless of course prices drop massively :lol:

I appreciate this is not 100 percent scientific and perhaps I should be using a deflater of some sort on the data, but I think it gives a pretty good feel as in practice wages won't be up hugely over that period.

Not only is this unscientific but its about as cackhanded a piece of "research" as I have ever seen.... there are so many irregularities in it it beggars belief... for a start postcode data on house prices and within primelocation do not overaly exactly, secondly you are comparing a today price with the same price from 2000... (if you wanted to get a true picture of this you should overlay how prices have changed over the period to allow for demand for properties in certain brackets) , you make no assumpitons for the number of "dreaming STR's" who are just fishing and won't sell in the end (all the agent info indicates that this has been a driver in the expansion in properties on the market).... etc etc.. I am sure it was fun for you to do.. but as a way of looking at the market its hopelessly unsophisticated.

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Not only is this unscientific but its about as cackhanded a piece of "research" as I have ever seen.... there are so many irregularities in it it beggars belief... for a start postcode data on house prices and within primelocation do not overaly exactly, secondly you are comparing a today price with the same price from 2000... (if you wanted to get a true picture of this you should overlay how prices have changed over the period to allow for demand for properties in certain brackets) , you make no assumpitons for the number of "dreaming STR's" who are just fishing and won't sell in the end (all the agent info indicates that this has been a driver in the expansion in properties on the market).... etc etc.. I am sure it was fun for you to do.. but as a way of looking at the market its hopelessly unsophisticated.

Actually I don't think its as invalid as you say, though I'll admit its not perfect, but is based on available data.

The reason why I think you are wrong is that really this is all about sales volumes - in one sense these should maintain a relatively consistent level within a given bracket, though on average overtime there will be a bit of inflationary drift that will distort things. But to be honest giving a value for the average number of £1m+ homes sold per year over the last 8 years is not going to be hugely unrepresentative for a given area.

That said, I don't think inflation drift will upset the apple-cart too much, my rational here is that true inflation is driven by wages rises, whereas housing bulls sometime confuse it with HPI due to credit expansion. It is also fair to say that there is some degree of cancelling out that will take place within price bands, for instance, in the £400k-£500 range some properties will move in and some will move out. Overall the average rate of sale would probably remain roughly consistent and I think it is also fair to say that it was recent lending stardards that were abnormal, not current ones.

So in summary, not perfect science, but does give a feel.

From your tone, I take it the findings worry you slightly?

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Actually I don't think its as invalid as you say, though I'll admit its not perfect, but is based on available data.

The reason why I think you are wrong is that really this is all about sales volumes - in one sense these should maintain a relatively consistent level within a given bracket, though on average overtime there will be a bit of inflationary drift that will distort things. But to be honest giving a value for the average number of £1m+ homes sold per year over the last 8 years is not going to be hugely unrepresentative for a given area.

That said, I don't think inflation drift will upset the apple-cart too much, my rational here is that true inflation is driven by wages rises, whereas housing bulls sometime confuse it with HPI due to credit expansion. It is also fair to say that there is some degree of cancelling out that will take place within price bands, for instance, in the £400k-£500 range some properties will move in and some will move out. Overall the average rate of sale would probably remain roughly consistent and I think it is also fair to say that it was recent lending stardards that were abnormal, not current ones.

So in summary, not perfect science, but does give a feel.

From your tone, I take it the findings worry you slightly?

No not worried... house prices are going down.. end of story.... how will your research into £1m houses look once prices have dropped off 20%.... the summation will be once you have readjusted the previous eight years data... that there not enough supply... becasue there will be so few homes in the £1m plus category... will that indicate prices will go up becasue theres insufficient supply.. no it won't.. prices may still have further to fall... I just don't believe its a sensible methodology and is full of holes... I would agree that transaction levels are a significant indicator of the market... I'd just leave it there, the research adds nothing valuable in my view.

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  • 399 Brexit, House prices and Summer 2020

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