A realistic picture of house prices

[Old Greg]

Only hindsight will tell if you actually end up better off, trying to call the bottom will be likened to catching falling knives. I guess the declines is likely to have some way to go so you can probably improve your position. When we last moved in 1991 we sold a house in Middlesex @ 96k. Bought one in Somerset @ 205,000. This subsequently dropped to probably 180,000 (by which time the one we sold was probably about 85k).

About 1 year before when we considered moving the house we sold was probably worth 115k. The house we actually bought was marketed at 350,000 and had an offer of 325,000 turned down.

Cost to change therefore reduced from 250k ish to 110k ish (and at the absolute trough would have been 100k ish).

The point of this? The tendency is that when the recovery starts it has always tended to be strong. If you are still looking to buy a bigger house then wait until there is blood in the streets and only those who would be regarded as insane are buying. This is probably as close as you'll get to calling the bottom.

Good luck.

Agreed - not going to try to call the bottom - when we see something that we really like for the money we want to pay, we'll buy. But I think we'll end up with something better for our money than if we'd bought in April.

[expat]

that makes quite alot of sense, but... when someone needs to sell a house as will probably happen shortly alot more sales will be realised. As there will be fewer buyers than sellers you'd expect prices to drop as sellers compete to atract the smaller pool of buyers.

In economic terms this negates the aspirational argument as wants become needs.

That's right, I was merely saying that those who would like to sell but don't need to, may not. A shift of the demand curve to the left is the same as a shift downwards; if it is seen as the first, it is called a drop in the market price, if the second, a drop in market volume. Same event, 2 views. Neither means that any individual house has sold for less than it woul have done last year.

[ASB]

"Supply" and "demand" are not fixed numbers; each is a function of price. Normally supply is taken to be a curve with positive gradient, and demand a curve with negative gradient. Where they meet, supply = demand, and that gives the market price.

...

That is what I was trying to say - but far better put

[fitzy73]

I would say a few of you on here at at classic "denial" stage

http://www.momentonmoney.com/012808_...eCycleofM1.jpg

[LittlestHobbo]

That's right, I was merely saying that those who would like to sell but don't need to, may not. A shift of the demand curve to the left is the same as a shift downwards; if it is seen as the first, it is called a drop in the market price, if the second, a drop in market volume. Same event, 2 views. Neither means that any individual house has sold for less than it woul have done last year.

well yes if the supply drops by the same rate as demand then prices would stay the same but volumes would drop, is this what you mean? Surely market volume and market price are different things? My A level economics is a touch rusty - i only lasted a month.

[DiscoStu]

Interesting figures that are based on ACTUAL SALES registered at the Land Registry from UpMy Street and are a couple of months behind for obvious reasons:



Property market in May 2008


We use property sales from the Land Registry & Registers of Scotland to create an average property price for each region, and compare this against the average in the previous month - as above - and year.

London: +0.8%; +0.3%
South East: +0.0%; +3.0%
East: +0.9%; +3.3%
E Midlands: +1.1%; +0.3%
North East: -2.4%; -1.3%
North West: -0.5%; +1.7%
South West: -2.0%; -0.8%

Wales: +0.6%; -0.7%
W Midlands: +0.5%; -0.5%
Yorkshire: +0.9%; +1.2%
Scotland: +1.4%; +12.2%
Edinburgh: -1.8%; +9.6%
Glasgow: +4.6%; -17.3%


(% changes to average price - previous month, then year)


In my area it shows an increase of 3% in the year to May..... mo massive crash at all.... and Scotland is UP 12.2% over the year !!!

I've highlighted the pertinent points. How long does it take to sell a house? 3/4/5/6 months?

So in reality you're looking at sales that reflect prices from the end of 2007 / beginning of 2008. I'd hardly call your figures current...

[Cyberman]

I've highlighted the pertinent points. How long does it take to sell a house? 3/4/5/6 months?

So in reality you're looking at sales that reflect prices from the end of 2007 / beginning of 2008. I'd hardly call your figures current...

I thought with HIPS that houses now sell quicker or have our 'clever' government implemented yet another failing system ?
The figures are not mine either... they are the best available because they are from the Land Registry and based on actual selling prices. We can safely blame the lack of current figures on public sector bureaucracy.

[ctdctd]

I thought with HIPS that houses now sell quicker or have our 'clever' government implemented yet another failing system ?
The figures are not mine either... they are the best available because they are from the Land Registry and based on actual selling prices. We can safely blame the lack of current figures on public sector bureaucracy.

He made a joke - didn't he?

[Bagpuss]

Demand is a function of supply, the money supply. That dries up and demand dries up. If Supply of housing remains constant or even reduces, as the money supply contracts so do prices.

[JamieMoles]

He made a joke - didn't he?

Homes with HIPS are selling quicker on average. The problem is that the market is only currently supporting cash buyers or buyers with a fat deposit.

When it eventually picks up, the value of the HIP will be clearer.