House prices

[Twiglets1]

Hi Guys, we got to the end of the last thread so need another one on this controversial topic!

And to respond to @CrashyTime I don't say "demand is strong" over and over again. In fact, I rarely comment on demand at all. My posts are more focussed on house prices and interest rates/mortgage rates.

And I don't deny economic "reality", I just don't exaggerate how bad the house price correction is likely to be. I have a running bet with @XVGN that property prices generally will fall about 5% in 2023 and another 5% in 2024 so I do believe prices are falling in most areas. Just nothing like the 30-35% crash predicted by some!

This is interesting, but not in a good way. These folk normally try to talk up the market and are predicting a big drop over the next 3 months.

"Residential property prices will fall 3.6% in the first quarter of the year, based on deals agreed between buyers and sellers in Q4 2023, Reallymoving’s House Price Forecast."

The good thing about this index is that it is generated from the agreed sale prices at the time of conveyancing requests of claimed 10% of the market. So a much more substantial data set than Halifax and Nationwide, and more finely tuned prices than the RM initial asking price index - which is probably the most useless one out there.

It's still only a subset and won't reflect price changes between offer and exchange, but pretty indicative of where reported prices in LR will be heading in c.6 months time.

What are you basing this thinking on, can you describe a time in history when it was a gentle slide and not a crash? As I recall the last two property crashes were just crash no slide, late 80s and 2007 (when it went down about 20% and they massively cut rates, which is not going to happen this time) I dont think you can go from a bubble built on zero rates to a "slide" with the inflationary pressures that are around now.

The absolute best way for ordinary people to get ahead is cheap property, the absolute worst way to damage your financial future is to borrow too much during a property bubble.

Use PropertyLog to see what other sellers are doing.

@CrashyTime I'm not basing it on a repeat of some other event in history just saying what I think will happen over the next few years. I think continuous nominal falls combined with inflation will mean housing being relatively cheaper in 5/10 years it's just my opinion that's all. I think the government (now or labour) will manage and massage things to avoid it looking like a crash

The uptick in mortgage rates seems to have started again. Of the 9 voters on the BOE panel, only one has recently (this month) voted for rate cuts.
It looks like being a difficult year. The BOE say are expecting inflation to rise again after April - which will be the lowest point of the year.

https://www.dailymail.co.uk/news/article-13035465/nationwide-mortgage-prices-rise-rates-hold.html

I also read somewhere that Nationwide put rates up because of the influx of applications for the lower rates. They simply cannot cope with interest it generated in new applications.

Hard to know at this stage. We need to look at the bank swap rates. At present, they haven't got scope to lower rates significantly.

hi @Mover2024
I agree with this. Defo do not trust EAs valuation. They are making it up as they go along. Business in sales is dry and so they're trying to win contracts by just saying what vendors want to hear.

See what buyers are doing and willing to pay in your area. Of course, the data isn't exactly correct because they are advertised prices, not actual agreed prices.

It's a buyer's market you see, and buyers know it . Also, buyers don't care about "finishes" too much at all. Both houses are new built, they're practically the same! Where they are in the plot is probably the one factor that matters e.g. noise levels and views, and even the views won't matter if you're just look out on to the street anyway.

@cupcakesarelife just had our last valuation at £400k. The EA brought in printed rightmove ads of 5 other comparable houses and also recent sold data and said this was what it was based on. I had a look through and agreed (had seen a few of the houses already).

The EA felt that price point would get people interested and may generate a few offers

"Of course, the data isn't exactly correct because they are advertised prices, not actual agreed prices."

Very true, I see PropertyLog more as a guide to sentiment than anything else, if sellers in a specific area are waking up to the fact that their asking prices are no longer achievable then you know you can approach them with the much lower much more realistic price offers.

Perhaps this is where we disagree. I don't have a problem with narcissists who have basis for such vanity.

You have probably seen the stats I posted elsewhere, something like -20% on flats in Nottinghamshire?

Whilst that doesn't encompass all homes, it shows a trend that over arches his predictions.

I find it exceptionally weird that you follow someone you despise on twitter.

There's absolutely no doubt that Charlie is full of himself. And of course he is flogging business stuff. But just how wrong do you think he is?

If I have the time and inclination come Spring, I will do my own data analysis for all counties across all home types in England.

I don’t follow him on Twitter I just said I look at his Twitter feed sometimes & I see he gets quite a few negative comments as well as positive ones so it’s not just me who doubts him.

Even if I did follow him, that would be my choice & not “exceptionally weird”. I don’t make personal remarks about you so would appreciate if you could keep your negative opinions to yourself.

In reference to the data you posted on your thread @KievLoverTwo Ive just had a better look at it and flats did not fall -20% in Nottinghamshire. They fell 0.79% on average, rose 13.26% in South Yorkshire, fell 1.42% in County Durham & rose 7.5% in North Yorks.

Even using the median ( which you prefer though I don’t know why as sales at the extreme ends are still sales), the prices of flats in Nottinghamshire rose 6.66% according to your data. They also rose 6.03% in South Yorkshire using the median and rose 29.24% in County Durham.

Flats in North Yorkshire fell by 16.66% using the median but if you meant to use that example, it’s hardly fair to cherrypick the worst region as if that proves the point that property prices are collapsing. All your data proves - as interesting as it is - is that property rises and falls are wildly variable depending on location & type of property.

I can’t edit that post but I got County Durham the wrong way round - your data showed the average flat price rose by 29.24% while the median was a fall of 1.42%

It's hard to say, but this press release could be the first warning that the BOE know, or think, they may not be able to be able to give the markets what they want. They do have form for using articles like this to covertly give forward guidance, or manipulate the direction of travel.
uk.news.yahoo.com/finance/news/might-raise-interest-rates-next-163120597.html

Gerard Lyons, a former economic advisor to Boris Johnson, said

“The voting suggests a bias to hike"

Please tell me where you are getting your numbers from,. Have you downloaded land registry data, or are you trusting what Rightmove says when you Google an area?

Since I posted these numbers I have earned that quarterly figures are more liable in a falling market, so perhaps I need to revise these numbers.

Reliable!

Blast the edit function

List at £395. The asking price is about getting viewers in. Once they’ve seen the house they will make an offer based on what it is worth to them.
An asking price starting with a 3 is psychologically more attractive than one starting with a 4. People are more likely to view your house first or your house alone. And you’ll look so much more reasonable and if you want to sell.

The numbers are from your post on your thread, I’ll link it later for the benefit of other people

Thank you. MN economists: What does '2) the jobs market' mean? See below

"Mr Pill said that even if there is no escalation in the Middle East, 1) the sustained pressure on inflation from wages, 2) the jobs market and 3) prices in the services industry means “that moment at which Bank Rate cuts might be possible is still some way off”

I wouldn't say he is narcissistic. He's obviously trying to sell something and that includes selling himself, his opinions, his data, etc. He waffles far too much though!

As regards, house price data, have you seen James Twallin's data?
He has plotted data from the Land Registry separated by both house type and region. He's on twitter. Bear in mind, the most recent data represents transactions that were taking place around June 23, most areas having fallen significantly since then. In many areas, detached houses have fallen the most. Flats, on average, fell a bit over the whole pandemic period-Summer 23. I think there were a couple of posters talking about prices still rising in Northumberland and that does indeed seem to be one of the regions bucking the trend according to this data. In other regions, some types of property have clearly come down >10% and will have fallen more in the last 7-8 months.

No, I have never heard of him. Whilst I would dearly love to follow Economists on twitter I find the platform to be infuriating. I haven't logged on for several years but on the one or two occasions I have tried to find a particular post of late, twitter won't show me posts in chronological order. What is that all about?

I do believe Charlie is has an over inflated sense of self but I also believe he deeply cares about people not ending up in negative equity. So the dude has a soul. He cut a video off last week when talking about how negative equity ruins lives and families. It sounded like he was about to burst into tears. I guess if impacted people close to him in the past.

And yes, the waffle 😳