Friday, September 18, 2009

Its that W Shaped Recovery Theme

Warning of new housing crash as prices 'soar too high'

Can't undestand what this article is saying, seems to be saying propety prices will crash because nobody will be buying or selling ! If anyone can enlighten me as to what the author is trying to say I would be most appreciative. I thought the theory was few sellers vs lots of cash rich buyers meant HPI? This article seems to be saying the opposite doesn't it? Or is it just an APPEAL to the Government to drop HIPS?

Posted by sybil13 @ 09:03 AM (1105 views)
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5 thoughts on “Its that W Shaped Recovery Theme

  • I don’t think the author understands what he is saying, it’s all just snippets and unsupported anecodes. That marketing exec is said to have “secured an asking price offer” on his house but has he actually sold it yet? It appears not.

    AFAICS, there is absolutely shedloads of property up for sale, there’s certainly a lot more round where I am (London-Essex border), some of which has been up for sale for a year or more, and little of it is shifting (except the ones who drop prices by a fifth).

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  • “An “autumn drought” of flats and houses has sent London property prices soaring, creating a dangerous mid-recession boom and raising fears of a new crash”

    OK, lets see just how dry that drought is..

    I’ve taken eight London postcode areas at random, one from each sector, and checked the number of sales over the last six months against the number of properties advertised on Rightmove

    Postcode area – Sales over six months – Rightmove advertised properties – Time on market in weeks

    E15 – 166 – 266 – 42 weeks
    SE22 – 135 – 428 – 83 weeks
    SW3 – 157 – 385 – 64 weeks
    W12 – 94 – 263 – 73 weeks
    NW4 – 66 – 343 – 135 weeks
    N22 – 92 – 316 – 90 weeks
    WC2 – 17 – 56 – 86 weeks
    EC2 – 31 – 44 – 37 weeks

    Totals for the eight areas show just 758 sales over the last six months, but with 2101 currently advertised on Rightmove.

    How can anyone even pretend there is a shortage, when the average time taken to sell a house in the capital is nearly 18 months (72 weeks)??

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  • UT – off topic. Sorry didnt come back yesterday.

    Re the “event risk”. Although you may well be right my view is that the kind of thing you are talking about happens once the trend is established. In other words we will probably have some bad (or more likely not as good as expected) corporate results first (as a “mini catalyst”) which will start a downleg, then a retracement and then the bear move. During this bear move the bad news will manifest (which may include things like Santander (if your feeling about them is accurate).

    Its not often that you have bad news that comes in at the top to reverse the trend, or more acurately not bad news you remember. [you can have bad news which the markets absorbs depending on the underlying strength of the opposite prevailing trend, or which it exagerates based on the strength of the trend in the same direction. The Barratt homes story seems to me like it illustrates the former.].

    Of course all this assumes we are in a bear market rally – as i said a while back the rally will probably continue for as long as it takes to convince most of the participants that perhaps it wasnt a bear market rally after all, and the bear market ended in March. If i start to believe that thats probably the best time to short.You pays your money and takes your chances

    Sorry to hijack this thread

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  • If your area is similar to mine, you will see a lot of property on rightmove at silly prices – 25%+ above June 2007 peak which has been there for more than a year, and a very small number of more sensibly priced properties which get sold for around asking price within two weeks or so.

    The stupidly priced properties are not “on the market” because the sellers aren’t prepared to accept the market price for them, leaving a very small number of properties from distressed and sensible sellers which actually are on the market. The fact is, that at the moment, if you want to buy a house, and pay market price for it, there is very little to choose from. If you want to buy a studio flat for £147k which is probably worth no more than £75k, just because it has been dressed up like something out a property porn program, then there are plenty of places to chose from.

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  • greenshootsandleaves says:

    You should have given up trying to make sense of the article when it transpired that some of the input had come from fuxtons. Nothing but EA propaganda/wishful thinking. All the old favourites are there, apart from ‘missing da boat’ (must have been a bad line): ‘prices are sailing past their pre-crash levels’ (except it wasn’t really a crash, was it, boys and girls?), ‘like a herd of wildebeest, increasingly desperate buyers are stampeding towards the last few properties available’ and, wait for it, ‘if the government were to add a couple of pages to the HIP, the supply of property for sale would dry up altogether!’ . Does it really take TWO journalists to produce such drivel?

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