Monday, January 19, 2009

-1.9% MoM, -7.3% YoY

'Prices now within 8% of the bottom'

We forecast last month that prices were within 10% of the bottom of the market, so this month's substantial fall is consistent with the market bottoming out in the latter part of 2009. This is given further credence by a chronic lack of housing supply. The speed with which prices have declined has been worrying, but it does mean we are potentially reaching the bottom sooner. 2009 could be the year of the property deal. The market has plumbed the depths, with agents reporting sales being achieved at a discount of around 25% from peak. The reduction in the number of properties coming to market appears to be aligning supply and demand which will help create a floor for prices.

Posted by little professor @ 12:18 AM (2192 views)
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19 thoughts on “-1.9% MoM, -7.3% YoY

  • little professor says:

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  • Rightmove = asking prices = measure of seller delusion.

    Actual sold prices = Haliwide.

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  • gone-to-colombia says:

    Total BS

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  • when house prices reach 3 to 3 and a half times the yearly income for YOUR area bearing in mind wages will drop soon, then factor in the economy in your area, plus real demand, then you should come up pretty close to the mark,of house prices in YOUR AREA.

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  • I think the rightmove bottom, will differ significantly from the real bottom. Expect more falls of 40% – 50%.

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  • Looking at the long term trend from that graph, all you can conclude is that there is no long term trend. But that’s not surprising since this is asking prices, and sellers ask for whatever they think they can get away with.

    Unfortunately this also means that they usually don’t get to sell their property!

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  • “The market has plumbed the depths, with agents reporting sales being achieved at a discount of around 25% from peak boom prices.”
    – and the rest!

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  • If Rigtmove are serious about their predictions then they had better name the site “Nevermove” cos sellers who believe RM’s propaganda will never move.

    Prices are down 18% in a year & and are going to fall at least as much again.
    Remember one “problem” (according to RM, Politicians etc) last year was availability of mortgages.
    The “problem” this year will be availability of mortgages PLUS (should that be TIMES) rising unemployment PLUS (TIMES? or even TIMES SQUARED ) a reality check on behalf of sellers.
    Optimistically down 20-25%

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  • Rightmove writes that we are within 8 percent of the bottom given their 2009 forecast? How fare are we from the bottom given their 2008 forecast? I suspect we have fallen well under the floor.

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  • Rightmove stats will simply give an indication of sellers realism or denial in this case.

    Looked at a property at the weekend, the estate agent seems to have convinced the seller that rpices are going up.

    Very foolish.

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  • Keep it up guys, these posts are adding fuel to the fire. Let’s all talk ourselves into a deeper recession, ignore any positive signs and focus tirelessly on the negative. I’m sure I’ll be branded as delusional for this opinion, and in many ways, given press coverage and comments like yours, will prove you right. The national mood has been media driven and as writers on this forum, you are as guilty as the reporters.

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  • Agents in my area pushed prices up massively 12 months ago is anicipation of future price falls, so when the falls are reported the sellers still try to achieve a 2007 peak price. With this manipulation by estate agents why should we ever trust them again. Why is it that estate agents still can’t see that prices are overvalued? The sooner prices REALLY come down, the market can operate normally once more, and agents earn a living.

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  • Estate agents are really quite stupid. They don’t seem to understand that they make money by selling houses, not by trying to keep them inflated. It would be all to their advantage to try to get prices down as fast a possible to revive transactions. Look at california:
    prices are down by about 50% but sales volumes are way up.

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  • For will turner: “ignore any positive signs?”. what positive signs? I see only one positive sign: house prices are going down fast.

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  • Will Turner – Sounds as if you may have property. If you owned through the 1989-1996 house price decline, you will know prices really did fall for 7 years. The issue has always been affordibility, and when any market becomes overvalued that market will always correct it’s self. If prices were to continue forever upwards, who would you sell to ? Surely our children don’t deserve to borrow 10 X their salaries, as they should be saving for their pensions.

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  • Hooray!! It’s been ages since an estate agent has visited this site!!

    Mr Turner – all the comments above are putting the rightmove stats in perspective and are factually correct. If the media have pushed the market up, then we are simply a balance to that. The site is, after all , called HPC.

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  • 13. Will Turner

    Market forces.

    Force up. Force down. It’s called the force of bubbles. The elastic band contracts easier than it extends and with more pain, even if you wish otherwise.

    Let the force be with you- and not against.

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  • new user 2007 says:

    Will Turner…

    This is a real example. In Jan 2007 a REAL price of 230k was achieved on a property. By Aug 2007 the ASKING price for a similar property had reached 335k. EAs then told sellers to raise ASKING prices to 355k in Dec 2007. If in Dec 2008 the ASKING prices falls to 305k, that is still higher than the last ACTUAL price at the peak.

    Based on that, where is the bargain? As for supply and demand arguments…outward migration had not started in 2007 and the supply of housing was fixed. Now we have had outward migration (back to Eastern Europe, largely), and some rise in the number of properties built (but for this example we can assume supply remained fixed).

    SO, how has the supply and demand situation improved in terms of supporting prices? The BUBBLE came because of everyone OVER-leveraging and now it is deflating as everyone is deleveraging. That is part of the natural cycle. Welcome to capitalism. That is not a negative attitude, that is a pattern that has run for centuries. It was not different this time!!

    The funny thing is that stories specific to housing* are still quite balanced between the very negative (based on numbers) and the very positive (based on what I see as the biased opinions of VIs). Before that it was ALL positive. Doubt you complained when the media talked it up!

    * As opposed to about the economy in general.

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  • Will Turner…..

    “Keep it up guys, these posts are adding fuel to the fire. Let’s all talk ourselves into a deeper recession, ignore any positive signs and focus tirelessly on the negative. I’m sure I’ll be branded as delusional for this opinion, and in many ways, given press coverage and comments like yours, will prove you right. The national mood has been media driven and as writers on this forum, you are as guilty as the reporters.”

    You should take a look at the history of this site over the past 2 or 3 years. There have been many exceptional people that have posted on this site and who have accurately predicted the events we are now experiencing. Essentially it has been blatantly obvious to many (not enough but many) that a financial day of reckoning was coming.

    Now we could all go and bury our heads in the sand and pretend that nothing is happening but that won’t help. Greed, incompetance and criminal activity have destroyed the capitalist system and we have to live with the consequences. Infact, the mainstream media could easily have been well ahead of the curve and warned people what was coming but chose not to. So I think it’s a bit insulting to tar users here with the reporters brush, seeing as how all the reporters are doing is reporting predictions from this site that are coming true.

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