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The Builder Bellwether Index (BBI)- Monthly Statistics

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Date: -TW-- :1.39xTW BDEV- PSN-- -BDVx1.92 -BBY- Tot.Idx/26.80 /FTSE x4477

Jul29 360.75: 501.44 993.0 1158.0 1906.56 443.00 5002.0 186.64 6608 126.45

aug31 347.25: 482.68 928.5 1157.0 1782.72 473.50 4824.4 180.01 6303 127.86

sep28 275.75: 383.29 748.0 964.00 1436.16 474.50 4006.0 149.48 6467 103.48

 

A HUGE 19% DROP in September !

That's back BELOW the lows of 2005 month ends (106).

A big fall in UK property retracing the post-2005 is in prospect.

- -

 

oct06 293.50: 408.00 765.0 1050.0 1468.80 481.25 4173.0 155.71 6596 105.69

 

PSN had a big move up in recent days, which lifted the BBI back to 106.

Why the near 20% move back up in PSN?

A short squeeze, was an explanation from the PSN thread.

But was "stopped in its tracks by the BDEV downgrade."

 

Here's the latest chart (as of mid-August?) from Spline's website:

 

housebuildersbo1.png

 

At sep-end's 102, it was lower than shown on this chart

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...AND MEANTIME, in the Real Property Market

 

Last week two of Britain's biggest lenders, Halifax and Nationwide, admitted that the market was slowing, but they still painted a reasonably rosy picture, saying that values were 10 per cent higher than a year ago. But their conclusions are at stark odds with findings by The Telegraph, which contacted estate agents the length and breadth of Britain. Agents in Leeds, Birmingham and Nottingham report a market that has ground to a halt – where property is proving almost impossible to shift, even with substantial price cuts.

 

Sarah Nixon of Hammond Harwood, a Nottingham-based agency, says none of the city's agents could remember a time when so few sales were going through.

 

"It's frightening," she says. "We have properties which have been on the books for months and months, which have suffered price reduction after price reduction but are still not selling."

 

Nixon says September is usually one of the busiest months but was "completely dead".

 

"Even buy-to-let has gone stale, in a normally buoyant students' market. The returns mean that as an investment buy-to-let simply isn't feasible any more."

 

Leigh Bradnick of Englands in the Harborne area of Birmingham says he has a large stock of unsold property which has been on the market for more than six months. "Owners are having to be very realistic about what their properties are really worth."

 

Paul Wilson of Dacre, Son & Hartley describes the market in Leeds and much of Yorkshire as "very, very hard".

 

"Price cuts have been substantial, up to 10 per cent," he says. "Many vendors do understand what is going on, and if they want to sell, they have to cut their price. Unfortunately this isn't working either."

 

/more: http://www.telegraph.co.uk/money/main.jhtm...7/cmhouse07.xml

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To be a good trader, you need to understand crowd behaviour,

and learn to trading against an "unthinking and unblinking consensus."

= = =

 

Market Psychology : a good balanced podcast from Peter Day

 

http://www.bbc.co.uk/radio4/news/inbusines..._20070920.shtml

 

Forever blowing bubbles? (with much discussion of property, in the US and UK)

 

In this edition of In Business Peter Day takes a look at why market bubbles occur and then go bust with monotonous regularity and why we never learn to spot the trouble before it happens.

 

Among our experts are two brothers, one and economist and one a psychiatrist, to explain how human behaviour plays into these cycles of booms and busts

 

= = =

 

Meantime, the Builders Index, also suggests a crash is ahead

 

housebuildersef6.png

 

Explanation:

The HPI indices (pink lines) should soon follow the BBI index (green) lower,

and within 6-12 months should wipe out those 2005-7 gains (assuming the BBI stays down.)

 

If the BBI falls below 100 (and stays there), then the pre-2005 gains are at risk too.

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BACK BELOW 100. ominous!

 

Date: -TW-- :1.39xTW BDEV- PSN-- -BDVx1.92 -BBY- Tot.Idx/26.80 /FTSE x4477

Jul29 360.75: 501.44 993.0 1158.0 1906.56 443.00 5002.0 186.64 6608 126.45

aug31 347.25: 482.68 928.5 1157.0 1782.72 473.50 4824.4 180.01 6303 127.86

sep28 275.75: 383.29 748.0 964.00 1436.16 474.50 4006.0 149.48 6467 103.48

Oct19 251.00: 348.89 667.0 971.00 1280.64 470.50 3738.0 139.48 6528 095.66

 

After A HUGE 19% DROP in September !, Another -7.6% down in 3 weeks

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this chart looks familar somehow

2628-1housing.gif

doesnt it?

housebuildersef6.png

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(a big slowdown is showing up in the mortgage lending figures now - and they tend to lead also)

 

Sharp fall in UK mortgage lending

 

A clear slowdown is under way in the property market

There was a sharp slowdown in mortgage lending in the UK last month, says the Council of Mortgage Lenders (CML).

Gross lending dipped by 12% from August to September, to £30bn.

 

Although lending was still higher than in September last year, the drop from month to month was larger than is usually seen at this time of year.

 

The CML said it was another sign that the housing market was responding to the five increases in interest rates since the summer of 2006.

 

"We have been expecting a slowdown in monthly lending levels in line with interest rate rises," said the CML's director general Michael Coogan.

 

"In the coming months, we expect to see monthly lending levels dip below their 2006 levels for the first time this year as rate effects are exacerbated by the recent liquidity problems in the mortgage market," he added.

 

Slowdown

 

The CML said that mortgage lending usually dips by just 5% between August and September.

 

However, September was the third month in a row that mortgage lending has dropped.

 

The CML's figures are very much in line with those from other market commentators such as individual lenders and estate agents.

 

Their regular surveys have all shown a slowdown in prices, sales or new mortgage approvals over the past few months

 

/more: http://news.bbc.co.uk/2/hi/business/7050277.stm

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The relationship seems to be that they are not related. But the Builders index of itself shows something is up. Why did it take off like that in '05 '06 when it was clear even then to anyone who cared to find out that builders were going to suffer?

 

LOL.

Well I think you are blind!

I make a very good living trading, and an important part of my success is the ability to interpret charts.

 

This one is obvious and important. The HPI indices look like a Moving Average (lagged a bit) of the

BBI index.

 

Are you sure you cannot see it?

 

housebuildersge1.png

 

It certainly worked on the way up! And it has worked on the way down in the USA.

For the leading role to work now in the UK, in what should be a falling market, we will need to see:

 

+ A very swift upward move in the builders (unlikely now, but we saw this in late 2005), or

+ The beginning of a big slide in UK house prices

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Dr B, and chance of viewing a comparable chart from the US if you have one?

 

 

Sorry, i dont have one, though I wish I did.

 

Behind your question, lurks a very important issue- i suspect.

 

CAUTION !!

 

I believe we would find that US property prices are proving very sticky on the downside.

The US builders have collapsed in price, and many, many months ago, but the downward

thrust in US prices is nowhere as large- at least not yet.

 

So it may be that: this index has correlated reasonably well with prices on the way up,

but on the way down, the slides in UK prices will be far less than the huge percentage

drops that we have seen in the UK builders.

 

If this supposition proves correct, then I still think the BBI has great value as a timing

tool. it seems to prediction turns (in both the US and the UK) with a 6 - 9 months lead.

 

Let's se how things play out. But do not expect the UK to give up all the gains since

2003 in only 6-9 months- which is what the index hgas been suggesting.

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from the BDEV thread on Adfn:

 

(Finally, posters her are acknowleding what is really going on):

 

tara7 - 17 Nov'07 - 17:28 - 485

Sorry mate, just my view, the world has changed. Money is drying up fast, house prices are going far lower than most think. Real estate [comm property has come off 16% in 10 weeks. House prices are falling very fast Now, today. Look at the last two property busts, 1974, and 1998. See just how low shares will fall. Forced sellers are hitting the market, and by the spring, will be in droves. Housebuilders are a one way bet, down,cos they will not make a profit on thr high price land they have. That land seemed cheap a year ago, however, now is falling like a stone. Losses for the next few years the pain has yet to start. Trust me, i saw a run on the banks comming. see thread , [RUN ON THE BANKS].

 

= =

 

Whodathunkit?

 

Barratt and other UK builders can now sell only at a loss.

And are beginning to rent properties out in order not to take the hit

on their balance sheets.

 

A sad, but predictable state of affairs

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HOPEFUL SPIN from, Mr.Slipshod...

"Prices are set to flatline in 2008," said Miles Shipside, commercial director of Rightmove.

 

"While we do not expect a price drop overall, there will be parts of the country that are over-priced and over-supplied for the likely levels of affordability and demand next year.

 

"In these areas, motivated sellers are starting to cut their prices and will need to be the cheapest on the street to sell.

 

"While bargain hunters will be paying less for these properties, prices will rise where demand continues to outstrip supply in quality areas close to major conurbations, especially London."

 

/see: http://www.housepricecrash.co.uk/forum/ind...showtopic=61388

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UPDATE on Fred Harrison's 18 year cycle

 

357-property-graph.gif

 

My model suggests that the property market runs in 18-year cycles. There have been three in the postwar years (1956-74, 1975-1992 and 1993-2010). The operating mechanism is shown in the graph above. Earnings across the economy rose roughly in line with national income, as did the cost of building homes (including materials, and wages and profits in the construction sector). House prices, however, rose much faster, to disruptive heights, peaking in the booms that result in busts. The cause of this instability is the out-of-control rise in the cost of land. The supply of land is fixed, so when the economy is growing, it has to become more expensive. Rising land prices squeeze corporate profits, reducing the money available for wages, until prices simply can’t go any higher because most people can no longer afford to buy.

 

The phenomenal rise in land prices since 1993 is the main reason why the next downturn will turn into a depression.

 

That may sound extreme. After all, most of us could relax if the only issue was the trend in house prices. Negative equity will burden only those who are forced to sell properties bought in the past three years or so. But much more is at stake. Forecasters base their optimistic outlook on the belief that the “fundamentals” rule out a recession, claiming a strong labour market will offset the pain of falling house prices. In fact, causation runs in the opposite direction. The fall in house prices creates the conditions for recession, as is now clear in the US. Lay-offs in the construction industry and related sectors are curbing consumption, which discourages investment and ends in a recession.

 

Look what happened when the last real estate cycle exhausted itself at the end of the 1980s. In Japan, the authorities mishandled the biggest postwar boom in property prices. Bad loans to land speculators were allowed to blight the balance sheets of banks that should have been allowed to fail. The outcome? A decade-long depressed economy.

 

Much the same happened in Germany, and it looks like the US and the UK will make the same mistakes.

 

/more: http://www.moneyweek.com/file/37485/house-...-the-worst.html

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Interesting article from Roger Bootle that backs up Dr Bubbs theory.

 

--------------

Housing market on the brink

By Roger Bootle

Last Updated: 12:37am GMT 03/12/2007

 

The last time I wrote about house prices, in mid October, I was just finishing my diet of humble pie which had been self-imposed after my earlier forecast of falling house prices had proved so wrong. Since then the evidence has piled up that the housing market has turned a corner. In October, mortgage approvals for new house purchases fell to 88,000, the lowest level since February 2005. In recent weeks, Nationwide, Halifax, Hometrack, the RICS and Rightmove have all reported house price falls.

 

Moreover, this chimes in with evidence from the Home Builders' Federation. Their site visit balance has already fallen below its 2004 low. Interestingly, in the past six months house builders' share prices have fallen by 50pc. Falls on that scale have only been seen three times in the past: in 1974, 1976 and 1992. Each of the three major house price corrections of the past 30 years has been preceded by a collapse in house builders' share prices.

 

The credit crunch is not the root cause of what is going wrong in the housing market. The decline in new buyer inquiries began at least six months before the onset of the problems in wholesale markets - as did the downward move in completed sales. There are two fundamental causes of the housing market slump, one proximate and the other underlying. The proximate cause is interest rates. Official interest rates began to rise last August and they are up in total by 125 basis points.

 

The second, fundamental reason is that property has become too expensive. What goes up too far must come down - and often too far as well. There are several indicators of housing market excess. My own favourite is the house price to earnings ratio, which currently stands in unheard-of territory at over six.

 

This indicator is often decried because it takes no account of the effect of low interest rates. But even when you take account of this factor by measuring housing affordability, the picture still looks grim. A new mortgage currently absorbs about 50pc of national average take-home earnings, a third above the 30-year average.

 

Meanwhile, gross rental yields on property are running at around 5.3pc - below mortgage rates of roughly 6pc. This means that once you take account of all the incidental costs, landlords are making a running loss. It is only the hope of future capital gains that can justify hanging on.

 

On top of these pre-existing fundamental causes comes the credit crunch. The number of new mortgages approved by specialist lenders - those without a retail deposit base and who thus rely on raising funds in wholesale markets - is down 46pc over the past three months. Mortgage approvals by building societies by contrast are up 5pc over the same period. And there may be even more of an effect in the months to come as pressure on lenders intensifies.

 

So how bad could things get? Could it be a repeat of the early 1990s? In broad terms the answer is that the degree of pain will surely not be as serious since the economy is in radically different shape. That will limit the rise in mortgage arrears and forced sales.

 

Moreover, then interest rates reached levels that are unthinkable today. These conditions, plus the surge in mortgage lending close to the peak in house prices, coupled with the widespread use of 100pc mortgages, caused a huge surge in negative equity. This affected over 1m households, exacerbating the economic and financial impact of house price weakness.

 

But the market is arguably more over-valued now than it was then. And there are some adverse structural factors operating now. We estimate that over the next year an average of 110,000 households a month will come to the end of a fixed-rate deal. Two-year fixed mortgage rates are currently around 1.5 percentage points higher than in October 2005, a rise of a third.

 

Furthermore, the buy-to-let market is vulnerable. There is some, but not yet conclusive, anecdotal evidence of landlords selling up. Also many of the major buy-to-let lenders are heavily reliant on wholesale markets. A lack of new mortgage credit in what has been the fastest growing sector in the housing market could leave prices vulnerable.

 

Whenever I write about the housing market I get a host of smart-alec messages asking whether I realised that the housing market is an average and there are a whole host of different experiences within this average. Funnily enough I had realised this. It is just that when talking about macro factors it is most useful to concentrate on the average rather than on a myriad of special cases. Indeed, a blow-by-blow account of every facet of the housing market would take up the whole newspaper.

 

At present, there is acute downward pressure on the prices of purpose-built flats in city centres built for the buy-to-let market. In some cases the prices of such property are already 30pc down or more. By contrast, so far, the prices of good family houses in leafy suburbs are holding up well.

 

It is widely believed that London is the most over-valued region, but relative to earnings and compared with historical averages, this is not true. Valuation and affordability measures look most stretched in Northern Ireland, the South West, North East and North West, the East Midlands and Wales. Wales, Northern Ireland and the North East are also heavily dependent on the public sector for job creation - and could thus suffer from the public spending squeeze.

 

London has demand from overseas buyers and clear limitations on supply. Having said that, it will be the most vulnerable to upsets in financial markets and weakness in the global economy.

 

It is astonishing how much things can change. Once prospective buyers and sellers realise that prices are no longer rising they will concentrate their attention on fundamental values and the forces making for price falls will grow. But because house prices cannot fall very fast, in conditions of low inflation it can take many years to return the market to equilibrium.

 

In the last major downturn, prices started to fall in 1989 and continued to fall, depending upon which measure you look at, for between three and a half and six and a half years. In real terms house prices did not regain their 1990 level until 2002. Accordingly, during the recent housing boom, only the last five years have been breaking new ground; the previous 12 were simply recovering the ground lost since 1990.

 

Still, this time it's different - isn't it? Don't worry, I have learned enough not to throw away the humble pie just yet. It may well come in handy in relation to other awful forecasts. But at least as regards house prices, somehow I suspect that over the coming year I will not be forced to eat it.

 

Roger Bootle is managing director of Capital Economics and economic adviser to Deloitte.

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Interesting article from Roger Bootle that backs up Dr Bubbs theory.

 

--------------

Housing market on the brink

By Roger Bootle

Last Updated: 12:37am GMT 03/12/2007

 

The last time I wrote about house prices, in mid October, I was just finishing my diet of humble pie which had been self-imposed after my earlier forecast of falling house prices had proved so wrong. Since then the evidence has piled up that the housing market has turned a corner. In October, mortgage approvals for new house purchases fell to 88,000, the lowest level since February 2005. In recent weeks, Nationwide, Halifax, Hometrack, the RICS and Rightmove have all reported house price falls.

 

Moreover, this chimes in with evidence from the Home Builders' Federation. Their site visit balance has already fallen below its 2004 low. Interestingly, in the past six months house builders' share prices have fallen by 50pc. Falls on that scale have only been seen three times in the past: in 1974, 1976 and 1992. Each of the three major house price corrections of the past 30 years has been preceded by a collapse in house builders' share prices.

 

The credit crunch is not the root cause of what is going wrong in the housing market. The decline in new buyer inquiries began at least six months before the onset of the problems in wholesale markets - as did the downward move in completed sales. There are two fundamental causes of the housing market slump, one proximate and the other underlying. The proximate cause is interest rates. Official interest rates began to rise last August and they are up in total by 125 basis points.

 

The second, fundamental reason is that property has become too expensive. What goes up too far must come down - and often too far as well. There are several indicators of housing market excess. My own favourite is the house price to earnings ratio, which currently stands in unheard-of territory at over six.

 

This indicator is often decried because it takes no account of the effect of low interest rates. But even when you take account of this factor by measuring housing affordability, the picture still looks grim. A new mortgage currently absorbs about 50pc of national average take-home earnings, a third above the 30-year average.

 

Meanwhile, gross rental yields on property are running at around 5.3pc - below mortgage rates of roughly 6pc. This means that once you take account of all the incidental costs, landlords are making a running loss. It is only the hope of future capital gains that can justify hanging on.

 

On top of these pre-existing fundamental causes comes the credit crunch. The number of new mortgages approved by specialist lenders - those without a retail deposit base and who thus rely on raising funds in wholesale markets - is down 46pc over the past three months. Mortgage approvals by building societies by contrast are up 5pc over the same period. And there may be even more of an effect in the months to come as pressure on lenders intensifies.

 

So how bad could things get? Could it be a repeat of the early 1990s? In broad terms the answer is that the degree of pain will surely not be as serious since the economy is in radically different shape. That will limit the rise in mortgage arrears and forced sales.

 

Moreover, then interest rates reached levels that are unthinkable today. These conditions, plus the surge in mortgage lending close to the peak in house prices, coupled with the widespread use of 100pc mortgages, caused a huge surge in negative equity. This affected over 1m households, exacerbating the economic and financial impact of house price weakness.

 

But the market is arguably more over-valued now than it was then. And there are some adverse structural factors operating now. We estimate that over the next year an average of 110,000 households a month will come to the end of a fixed-rate deal. Two-year fixed mortgage rates are currently around 1.5 percentage points higher than in October 2005, a rise of a third.

 

Furthermore, the buy-to-let market is vulnerable. There is some, but not yet conclusive, anecdotal evidence of landlords selling up. Also many of the major buy-to-let lenders are heavily reliant on wholesale markets. A lack of new mortgage credit in what has been the fastest growing sector in the housing market could leave prices vulnerable.

 

Whenever I write about the housing market I get a host of smart-alec messages asking whether I realised that the housing market is an average and there are a whole host of different experiences within this average. Funnily enough I had realised this. It is just that when talking about macro factors it is most useful to concentrate on the average rather than on a myriad of special cases. Indeed, a blow-by-blow account of every facet of the housing market would take up the whole newspaper.

 

At present, there is acute downward pressure on the prices of purpose-built flats in city centres built for the buy-to-let market. In some cases the prices of such property are already 30pc down or more. By contrast, so far, the prices of good family houses in leafy suburbs are holding up well.

 

It is widely believed that London is the most over-valued region, but relative to earnings and compared with historical averages, this is not true. Valuation and affordability measures look most stretched in Northern Ireland, the South West, North East and North West, the East Midlands and Wales. Wales, Northern Ireland and the North East are also heavily dependent on the public sector for job creation - and could thus suffer from the public spending squeeze.

 

London has demand from overseas buyers and clear limitations on supply. Having said that, it will be the most vulnerable to upsets in financial markets and weakness in the global economy.

 

It is astonishing how much things can change. Once prospective buyers and sellers realise that prices are no longer rising they will concentrate their attention on fundamental values and the forces making for price falls will grow. But because house prices cannot fall very fast, in conditions of low inflation it can take many years to return the market to equilibrium.

 

In the last major downturn, prices started to fall in 1989 and continued to fall, depending upon which measure you look at, for between three and a half and six and a half years. In real terms house prices did not regain their 1990 level until 2002. Accordingly, during the recent housing boom, only the last five years have been breaking new ground; the previous 12 were simply recovering the ground lost since 1990.

 

Still, this time it's different - isn't it? Don't worry, I have learned enough not to throw away the humble pie just yet. It may well come in handy in relation to other awful forecasts. But at least as regards house prices, somehow I suspect that over the coming year I will not be forced to eat it.

 

Roger Bootle is managing director of Capital Economics and economic adviser to Deloitte.

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A COLD WINTER COMING for UK Property

 

'The graph below shows the number of houses per agent,

rebased to zero at the beginning of each year, for the last 3 years.

findapropertysupplynov0wh7.png

 

The usual pattern, of more houses being offered for sale as we head into the spring and summer

occurred again in 2007. But what has NOT happened this year is the fall in supply, as:

 

+ Properties get bought in the fall, and

+ Unsold supply gets withdrawn

 

Are we seeing more-than-usual seasonal supply because BTLers are pushing properties into the market?

 

/source: http://www.housepricecrash.co.uk/forum/ind...showtopic=63295

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(as posted elsewhere ):

 

QUOTE (Rudi @ Dec 31 2007)

I don't mean to dismiss your index, as I think it could be used as a useful signal for upcoming market reversals (particularly as a way of timing a bottom). However I simply don't agree with the correlation between the house price indices and the adjusted 5 builders index you have created.

UNQUOTE

 

DrBubb:

 

TIMING & LEVEL ??

=============

 

The BBI Builders Index has been an effecting TIMING tool, giving leading indications of the property

market's direction 6 to 12 months ahead. I have used it for the US and for Hong Kong too.

I can say, it is helping me to make money, as the indication it gave me about the upward thrust

in Hong Kong helped me to gain the confidence needed to invest aggressively, especially early

on when the best opportunities were still available.

 

As to LEVEL of the market...

I would have to agree with you, that to ask the BBI Builders index to tell you the precise level at

which the UK property market will bottom out, might be asking too much.

 

However, do consider this. Even with the effect of gearing, isnt it conceivable that if the BBI index

stocks wipe out all their gains since 2003 or 2004, that UK property markets are also capable of doing

the same thing? I think this correlation - how many years of gains get wiped out by the BBI, and then

how many years of gains subsequently gets wiped out by actual property prices is something

interesting to watch in the years to come.

 

Meantime, keep an eye on the US, where some builders have wiped out 70% or even 80% of value.

Not just 70-80% of the gains, that's a price destruction of 70-80% of value. I do not expect to see

US prices fall by 70-80%. But some of the US builders have wiped out all of the gains since 2000,

and even since the late 1990's. Let's see if US prices fall 40-60% for that to happen too.

 

The city showing the biggest declines in the Schiller Index is Detroit.

 

Detroit====== -2000- : Peak / Timing : Recent level :: Pct. of gain erased

CS index level: 100.00 : 127.1/ Dec'05 : 108.2/ Oct'07 : about 2/3rds

 

Keep in mind, this does not include condos, which have had deeper falls. So perhaps the Schiller

index is understanding the extend of price drops in many cities (like Miami) with loads of condos.

 

One reason I think the UK HPI indices will understate price drops is the way they are calculated.

In the UK, is someone spends Pds.25,000-30,000 (or something) upgrading their property by adding

a roof extension, a garage, or a conservatory, that value-added will show up in the price

ultimately received in the sale. But there is no adjustment to the base price. The so the index

gardually gets inflated by various ugrades that cost the owners money. The average home in the

UK now is larger, has better bathrooms, and kitchens. etc than it had in the 1960's, but there

have never been any adjustments to teh index. Perhaps 20-30% of the index inflation since the

1960's is due to these types of capital expenditures (that's just a guess.) And this may be one

reason why prices may not fall all the way back to 1994-5 levels even if the UK property market

is very weak.

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(as posted elsewhere ):

 

And this may be one

reason why prices may not fall all the way back to 1994-5 levels even if the UK property market

is very weak.

 

A return to 1994-5 levels! Wow. I don't see that either, though it would be very nice. Monetary inflation will stop that.

 

 

What year do you see a return to in nominal terms?

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Hey this is one of my fav threads and its gone very quiet. I've looking at Spline's site and the graph as moved on a bit making a bottom maybe? Is 2002/3 the price range we looking at in three to four years from now (real terms speaking).

post-1180-1202936078_thumb.jpg

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Looking at the UK builders here versus what happened to US builders.

 

US peaked around Aug 2005 and bottomed Jan 2008 ~ 29 mth decline.

Pulte dropped around 83% and DR Horton about 74% high to low.

 

UK peaked Jan/Feb 2007 ~ 16 mth decline so far

Persimmon has dropped ~ 67%, Taylor Wimpey around 82% and Barratts around 84% so far..

 

Any thoughts ?

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Looking at the UK builders here versus what happened to US builders.

 

US peaked around Aug 2005 and bottomed Jan 2008 ~ 29 mth decline.

Pulte dropped around 83% and DR Horton about 74% high to low.

 

UK peaked Jan/Feb 2007 ~ 16 mth decline so far

Persimmon has dropped ~ 67%, Taylor Wimpey around 82% and Barratts around 84% so far..

 

Any thoughts ?

 

Forecasting a bigger drop in the UK than the US, I would say

 

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Forecasting a bigger drop in the UK than the US, I would say

 

Barratt Developments was around £10-11 when in the FTSE100, look at it now.

 

ADVFN Market report.

Among the housebuilders, Persimmon was down 26 at 487-1/2, also under pressure as the company looks set for demotion to the FTSE 250 index next month, leaving no housebuilders in the FTSE 100.

 

And building materials group Wolseley was down 19-1/2 pence at 537-1/2, hit further by Panmure Gordon reiterating its 'sell' rating and 400 pence price target.

 

Among mid-cap housebuilders, Barratt Developments was 10-1/2 pence lower at 190, Taylor Wimpey was down 8 at 85.5, and Bovis Homes fell 19 to 429.

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That is an unbelievable decline in Barratt. I kep looking at it thinking this can't go much lower and leaving it. I've not traded it nearly as well as I should have. But what is it saying about UK housing.

 

I remember sitting next to Bubb in an internet cafe in late 2006 looking at a chart and him saying, 'That thing could go to zero'. Well, well, well.

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That is an unbelievable decline in Barratt. I kep looking at it thinking this can't go much lower and leaving it. I've not traded it nearly as well as I should have. But what is it saying about UK housing.

 

I remember sitting next to Bubb in an internet cafe in late 2006 looking at a chart and him saying, 'That thing could go to zero'. Well, well, well.

 

 

Yeah, you may be right but I think there is a case for a bounce here ;

 

- 1995 and 1999 lows were around these levels

- PE of 2.3% to June 2008 (lowest in FTSE 250)

- Doom and gloom (housing sales, potential debt downgrade / rights issue etc ) all well known now.

 

Undecided but I may pick some up below 200

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That is an unbelievable decline in Barratt. I kep looking at it thinking this can't go much lower and leaving it. I've not traded it nearly as well as I should have. But what is it saying about UK housing.

 

I remember sitting next to Bubb in an internet cafe in late 2006 looking at a chart and him saying, 'That thing could go to zero'. Well, well, well.

 

At the time it was probably about 1,000p, so it is 80% of the way to zero already

 

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Yeah, you may be right but I think there is a case for a bounce here ;

 

- 1995 and 1999 lows were around these levels

- PE of 2.3% to June 2008 (lowest in FTSE 250)

- Doom and gloom (housing sales, potential debt downgrade / rights issue etc ) all well known now.

 

Undecided but I may pick some up below 200

 

Hmmm, well maybe but i would be very cautious.

 

Believe me or not, but Barratt's have issued an instruction not to pay sub-contractors for the next month whilst they progress funding issues. ;)

 

Had it confirmed by people who work for Barratt's.

 

D.Y.O.R

 

Riggers

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