HWO MUCH IS YOUR PROPERTY WORTH ? : according to Yahoo

Which part of the word 'could', as in "Your home could increase by n% in the next 5 years" did you not understand ?"

Quite.

Daytona

which part of this dont you understand: House Prices are falling not rising so why doesn't the Yahoo Propert Predictor say "Youe home could decrease by n% in the next 5 years" ?

still in denial ?

Only seems to work for certain parts of the UK. ie the England and Wales part, the rest is excluded.

No, just waiting for you to put forward some credible evidence over a credible timespan.

As someone who's performed my own analysis long before you appeared on the forum I find your approach lacks credibility, but it does give me a laugh, so thanks very much for that; I do appreciate it.

Daytona

Timespan is the key here Daytona. I have a hypothesis which is shared by many others that the price bubble has burst and prices will fall. This "insight" was formed by reading Galbraith's books on Stock Market and other speculative bubbles. The logic is inexorable and I wont bore you with the details unless you insist.

As with any hypothesis it must make verifiable and testable predictions. I have made a prediction that prices will fall for several years based on the speculative bubble hypothesis.

It is up to you and others to test and verify wether this prediction has any validity. Because of the slow-motion nature of the housing market compared with Stock markets this price fall will take many months or even longer to become evident.

But if it does happen (and I think it will) then my hypothesis can be said to have some validity although it is always possible to be right for the wrong reasons in the social sphere (which is where markets operate ) which is why it is almost impossible to make causal determinations where society is involved.

But as the Greeks said societies (including marekts ) are entirely a man-made phenomenon (unlike the cosmos for example) and are therefore amenable to human study and understanding.

it seems to give the same answer no matter what postcode you enter.

Not again!!

You are absolutely right. People have been making this prediction every week for the past 5 years and, one day, one of them will be right - why shouldnt it be you? Every one of them will be saying I told you so when it happens.

It's fairly standard in the investment market that if you see it happening, it is too late.

Why do you believe this is an investment bubble?

The population round here is increasing, more people squeezing more and more tightly into the same number of houses, *that* is what is forcing up prices, not speculation.

...then put your post-code in here and watch your property halve in value in seconds.

a google on "uk housing bubble" brings up a mere 76,000 hits.

Whether it turns out to be a bubble or not, there's a rational cause for the suspicion.

So why do you wet yourself every time the latest monthly Halifax/Nationwide/Rightmove/RICS survey appears ?

Daytona

The fact that we're more awash in credit than any prior point in history?

If this theory were correct, rents would have tracked prices up due to the same preference shift towards housing. They haven't.

FoFP

There was an article in last Fridays times pointing out that rents have recently risen.

"M Holmes" wrote

The planet is also more "awash" with h*mo-sapiens than at any prior point in history. Does that mean that we're imminently going to have the population reduce substantially??! :-((

Hmm, could be. Take a look at chaos theory.

oddly enough pandemics are in the news and urbanism is a principal cause.

Maybe bird flue will do it.........just think how cheap houses will be then.

wrote

Hmmm. Perhaps you're thinking of the wrong theory? - Chaos theory doesn't say anything at all about populations!

On Sun, 24 Oct 2004 11:18:13 +0000 (UTC), "Troy Steadman" wrote:

Based on a small number of books I have read on the subject: Mackay, Galbraith and the Irrational Exuberance book by Shiller. Also some articles by Kindleberger and even Soros.

Galbraith was the most convincing and If I can try and sum up his theory of the speculative bubble in a few sentences I will probably c*ck something up as I am not an economist but what the hell.

Rising prices on certain commodities (stocks and shares , housing , tulips etc ) attract more than normal level of interest from buyers which pushes up the price. This is perfectly normal and is what you would expect in a classical supply-demand situation. An increase in demand pushes up the price with the supply remaining reasonably constant. What makes it a speculative bubble is that the rising value of the commodity (caused by increased interest by buyers) gives those buyers the ability to raise more cash based on the increased value to then re-invest in the same commodity. This is called leverage. As long as there is fresh buyers bringing new money to the table this game can go on for quite a while. The money from the new buyers enables the etsablished buyers to then sell at even higher prices and so on and so forth. However there comes a time when new buyers dry up and the leverage goes into reverse . There is no one to buy the commodity at the hugely inflated prices and the price must of necessity start falling as ineluctably as an apple from a tree. When the price starts falling the paper wealth of many starts dwindling and they can no longer honour their debts which were backed up on the strength of the price of the commodity. The fact that they used the commodity gains to borrow money to buy more of that commodity only makes the reverse leverage all the more acute in its action.

I hope that makes some sense and I am sure economists among you can point out my mis-reading (forgetting) of Galbraith as I dont have the book to hand.

A good example of this happened in the 70s in the Silver market in London. Two brothers , whose name I forget , cornered the market in silver and aggressivley drove up its price. They borrowed a lot of money to do this and most of this money was borrowed on the strength of their assets. ie they were lent so much by the bank because they owned so much silver valued at so many dollars or pounds per ounce. They completely dominated the silver market and at one point almost owned the lot. However they could not meet their interest payments and had to sell some silver to raise cash. Selling the silver resulted in reverse leverage taking place and the price collapsed in vbery short order leaving them bankrupt.

There was a lot of chaos theory in population dynamics from what I recall.