When/Will house prices cool down?
Discussion
Phooey said:
Interesting.. https://www.youtube.com/watch?v=7IhxhF1o5_A
Cherry-picking. Lovely coincidence that it's a nice round number like 20 years, but he's still cherry picking.If you look at the earlier charts on house-price growth, 2004 coincides with the tail-end of a very rapid spike in prices (i.e. at or close to a peak in terms of house prices : income or house prices : underlying inflation).
...and he's taking right now, after a dip in prices, not 6-12 months ago when they were at the peak. So he's comparing a localised peak (2004) with a localised trough (2024).
(Note that most people state that the house price problem starts in the late-90s, so he just lets 5-6 years of unfettered (very rapid) growth happen before he starts his measurement. Cherry picking!)
I'm also not convinced by his "correction chart" at around 5:30 - he talks about "real house prices" but doesn't specify whether that's adjusting for CPI, RPI, Wage inflation or some other measure (he just says "inflation"). RPI, which is the true measure of household cost, has been ignored for a long time now. CPI is lower, and wage inflation lower still (doubly so if you consider fiscal drag and use net pay, but no-one ever does). So I'd wager a sizeable sum he's not used the appropriate measure, he's just picked one at random (probably not maliciously), and it's given him the answer he wants, but the true ratio - house prices to net earnings - is almost certainly worse than he presents.
havoc said:
Cherry-picking. Lovely coincidence that it's a nice round number like 20 years, but he's still cherry picking.
If you look at the earlier charts on house-price growth, 2004 coincides with the tail-end of a very rapid spike in prices (i.e. at or close to a peak in terms of house prices : income or house prices : underlying inflation).
...and he's taking right now, after a dip in prices, not 6-12 months ago when they were at the peak. So he's comparing a localised peak (2004) with a localised trough (2024).
(Note that most people state that the house price problem starts in the late-90s, so he just lets 5-6 years of unfettered (very rapid) growth happen before he starts his measurement. Cherry picking!)
I'm also not convinced by his "correction chart" at around 5:30 - he talks about "real house prices" but doesn't specify whether that's adjusting for CPI, RPI, Wage inflation or some other measure (he just says "inflation"). RPI, which is the true measure of household cost, has been ignored for a long time now. CPI is lower, and wage inflation lower still (doubly so if you consider fiscal drag and use net pay, but no-one ever does). So I'd wager a sizeable sum he's not used the appropriate measure, he's just picked one at random (probably not maliciously), and it's given him the answer he wants, but the true ratio - house prices to net earnings - is almost certainly worse than he presents.
Interesting reply, thanks. House prices to net earnings (affordability) has to be one of the most sensible measures of house prices. It’s only recent wage growth / job supply that has supported the market so far. If you look at the earlier charts on house-price growth, 2004 coincides with the tail-end of a very rapid spike in prices (i.e. at or close to a peak in terms of house prices : income or house prices : underlying inflation).
...and he's taking right now, after a dip in prices, not 6-12 months ago when they were at the peak. So he's comparing a localised peak (2004) with a localised trough (2024).
(Note that most people state that the house price problem starts in the late-90s, so he just lets 5-6 years of unfettered (very rapid) growth happen before he starts his measurement. Cherry picking!)
I'm also not convinced by his "correction chart" at around 5:30 - he talks about "real house prices" but doesn't specify whether that's adjusting for CPI, RPI, Wage inflation or some other measure (he just says "inflation"). RPI, which is the true measure of household cost, has been ignored for a long time now. CPI is lower, and wage inflation lower still (doubly so if you consider fiscal drag and use net pay, but no-one ever does). So I'd wager a sizeable sum he's not used the appropriate measure, he's just picked one at random (probably not maliciously), and it's given him the answer he wants, but the true ratio - house prices to net earnings - is almost certainly worse than he presents.
Mr Whippy said:
Unless the pictures have got mixed up, they didn't even have to refurb the bathroom.I note the current listing has avoided showing the garage doors on the rear elevation.
Not sure about the open wardrobes either - OK in a dressing room, but not in a bedroom.
Sheepshanks said:
Mr Whippy said:
Unless the pictures have got mixed up, they didn't even have to refurb the bathroom.I note the current listing has avoided showing the garage doors on the rear elevation.
Not sure about the open wardrobes either - OK in a dressing room, but not in a bedroom.
But it is the first time I've ever seen a 15 octave piano
Can't get my head around what's going on with values in my road.
From 2020-2022 good extended and modernised houses used to go for between 1,050m to 1.125m dependant on if they had a drive, pre conservation loft conversion and what the finish was like. I paid 865k for mine as it needed a lot of work doing to it.
2023, nothing doing apart from a tired one that sold for 1m which given the mess the mortgage market was in and the work the house needed was a fair deal.
Today I see a completion showing at the land reg late last year, almost over the other side of the road and 4 houses over from me of one that's pretty tired and needs a lot of work doing to it, some old boy used to live there, it needs a kitchen diner extension as all it has is a shonky old lean to at the back, £1.210m. It wasn't even marketed from what I can see so must have been sold off market or via discrete marketing. Or it's a mistake.
From 2020-2022 good extended and modernised houses used to go for between 1,050m to 1.125m dependant on if they had a drive, pre conservation loft conversion and what the finish was like. I paid 865k for mine as it needed a lot of work doing to it.
2023, nothing doing apart from a tired one that sold for 1m which given the mess the mortgage market was in and the work the house needed was a fair deal.
Today I see a completion showing at the land reg late last year, almost over the other side of the road and 4 houses over from me of one that's pretty tired and needs a lot of work doing to it, some old boy used to live there, it needs a kitchen diner extension as all it has is a shonky old lean to at the back, £1.210m. It wasn't even marketed from what I can see so must have been sold off market or via discrete marketing. Or it's a mistake.
Edited by princeperch on Monday 1st April 21:16
A couple of areas I know well in South London, I’ve noticed
Area A
- There’s still a lot of unrealistic pricing going on, particularly at the more illiquid end of £2.5m+. Lots of vendors asking >£1,000/sqft, despite this being achieved by only the best stock 21-22.
- Stuff that is listed reasonably (£800-900/sqft) goes quickly
Area B - taking one road of very similar 4-beds as an example
- Lots of transactions 21-22 at £1.2-1.3ish, one outlier transaction at £1.4+ but those buyers may be regretting it now
- Massive drop in volumes through 2023 - just one transaction on the road, at £1.1 (and from Rightmove photos, no obvious reason difference to the 21/22 houses)
- A few have listed in the last 9 months at ranges between £1.185 and 1.4, but so far looks like none have moved to SSTC.
Area A
- There’s still a lot of unrealistic pricing going on, particularly at the more illiquid end of £2.5m+. Lots of vendors asking >£1,000/sqft, despite this being achieved by only the best stock 21-22.
- Stuff that is listed reasonably (£800-900/sqft) goes quickly
Area B - taking one road of very similar 4-beds as an example
- Lots of transactions 21-22 at £1.2-1.3ish, one outlier transaction at £1.4+ but those buyers may be regretting it now
- Massive drop in volumes through 2023 - just one transaction on the road, at £1.1 (and from Rightmove photos, no obvious reason difference to the 21/22 houses)
- A few have listed in the last 9 months at ranges between £1.185 and 1.4, but so far looks like none have moved to SSTC.
princeperch said:
It wasn't even marketed from what I can see so must have been sold off market or via discrete marketing. Or it's a mistake.
You would be really surprised how many of these still going..My opposite house, the owner was old and in bad health. His cleaner just told her friends that she might need a new job. Her cleaner friends employer (similar neigbourhood), is an investor and just visited the old man and said he can buy the property from him with cash, no hassle and etc. He just accepted, moved to his relatives than sadly died a few months later.Edited by princeperch on Monday 1st April 21:16
New owner(Investor) just told me this original story and he literally bought several houses like this over the years. He did a bit of work on the house and currently renting to a young family.
brickwall said:
A couple of areas I know well in South London, I’ve noticed
Area A
- There’s still a lot of unrealistic pricing going on, particularly at the more illiquid end of £2.5m+. Lots of vendors asking >£1,000/sqft, despite this being achieved by only the best stock 21-22.
- Stuff that is listed reasonably (£800-900/sqft) goes quickly
Area B - taking one road of very similar 4-beds as an example
- Lots of transactions 21-22 at £1.2-1.3ish, one outlier transaction at £1.4+ but those buyers may be regretting it now
- Massive drop in volumes through 2023 - just one transaction on the road, at £1.1 (and from Rightmove photos, no obvious reason difference to the 21/22 houses)
- A few have listed in the last 9 months at ranges between £1.185 and 1.4, but so far looks like none have moved to SSTC.
Suspect I’m monitoring similar areas - more flyers and I suspect a glut of people waiting for some positive market sentiment and weather!Area A
- There’s still a lot of unrealistic pricing going on, particularly at the more illiquid end of £2.5m+. Lots of vendors asking >£1,000/sqft, despite this being achieved by only the best stock 21-22.
- Stuff that is listed reasonably (£800-900/sqft) goes quickly
Area B - taking one road of very similar 4-beds as an example
- Lots of transactions 21-22 at £1.2-1.3ish, one outlier transaction at £1.4+ but those buyers may be regretting it now
- Massive drop in volumes through 2023 - just one transaction on the road, at £1.1 (and from Rightmove photos, no obvious reason difference to the 21/22 houses)
- A few have listed in the last 9 months at ranges between £1.185 and 1.4, but so far looks like none have moved to SSTC.
I suspect so.
I think just a dose of realism from the vendors and a settling of nerves on buyers and they’ll end up meeting in the middle.
In area A the market’s message is simple - list at £800-900/sq ft and you’ll sell quickly, probably close to asking.
On the road mentioned in Area B, list at or under £1.2 and you’ll get interest, you’ll probably end up not too far off. Vendors on that road will still have made c40% in 10 years. Hardly going to the moon, but not a cold bath either.
I think just a dose of realism from the vendors and a settling of nerves on buyers and they’ll end up meeting in the middle.
In area A the market’s message is simple - list at £800-900/sq ft and you’ll sell quickly, probably close to asking.
On the road mentioned in Area B, list at or under £1.2 and you’ll get interest, you’ll probably end up not too far off. Vendors on that road will still have made c40% in 10 years. Hardly going to the moon, but not a cold bath either.
brickwall said:
A couple of areas I know well in South London, I’ve noticed
Area A
- There’s still a lot of unrealistic pricing going on, particularly at the more illiquid end of £2.5m+. Lots of vendors asking >£1,000/sqft, despite this being achieved by only the best stock 21-22.
- Stuff that is listed reasonably (£800-900/sqft) goes quickly
Area B - taking one road of very similar 4-beds as an example
- Lots of transactions 21-22 at £1.2-1.3ish, one outlier transaction at £1.4+ but those buyers may be regretting it now
- Massive drop in volumes through 2023 - just one transaction on the road, at £1.1 (and from Rightmove photos, no obvious reason difference to the 21/22 houses)
- A few have listed in the last 9 months at ranges between £1.185 and 1.4, but so far looks like none have moved to SSTC.
This is always the best way to analyse pricing although, you're right in that some sellers completely fail to recognise the sheer cost and effort of turning a sArea A
- There’s still a lot of unrealistic pricing going on, particularly at the more illiquid end of £2.5m+. Lots of vendors asking >£1,000/sqft, despite this being achieved by only the best stock 21-22.
- Stuff that is listed reasonably (£800-900/sqft) goes quickly
Area B - taking one road of very similar 4-beds as an example
- Lots of transactions 21-22 at £1.2-1.3ish, one outlier transaction at £1.4+ but those buyers may be regretting it now
- Massive drop in volumes through 2023 - just one transaction on the road, at £1.1 (and from Rightmove photos, no obvious reason difference to the 21/22 houses)
- A few have listed in the last 9 months at ranges between £1.185 and 1.4, but so far looks like none have moved to SSTC.
tter into a luxury home.Anyway, in my part of NW London I reckon around £750/sq ft gets you into something fully modernised and turnkey.
A couple of miles down the road, people are asking for and getting £1,150/sq ft. It's very hot down there.
brickwall said:
I suspect so.
I think just a dose of realism from the vendors and a settling of nerves on buyers and they’ll end up meeting in the middle.
In area A the market’s message is simple - list at £800-900/sq ft and you’ll sell quickly, probably close to asking.
On the road mentioned in Area B, list at or under £1.2 and you’ll get interest, you’ll probably end up not too far off. Vendors on that road will still have made c40% in 10 years. Hardly going to the moon, but not a cold bath either.
Todays offering in the Village well over £1k/sqft - pants layout too. I think just a dose of realism from the vendors and a settling of nerves on buyers and they’ll end up meeting in the middle.
In area A the market’s message is simple - list at £800-900/sq ft and you’ll sell quickly, probably close to asking.
On the road mentioned in Area B, list at or under £1.2 and you’ll get interest, you’ll probably end up not too far off. Vendors on that road will still have made c40% in 10 years. Hardly going to the moon, but not a cold bath either.
okgo said:
Todays offering in the Village well over £1k/sqft - pants layout too.
Yeah I saw that. Off street parking for 1 car. One bathroom and a tiny en-suite, east-facing garden. And a bizarre layout as you say.
I think they’d be very lucky to get £1.75M. Let’s see.
But they’ve owned it for 20 years, so probably are mortgage free and in no rush to sell. This is their goldmine.
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