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May 29, 2008

Comments

Riz

Flipping this around, if newscasters reported the price change of an individual stock (say RBS, Barclays, or M&S) as much as they reported as they reported nationwide house prices indices, people may think stocks are more risky than they actually are.

chris

True - but idiosyncratic risk in shares can be diversified away easily. Idiosyncratic risk in housing is far harder to diversify.

Riz

Good point - another reason why I'd rather rent. Houses are big lumpy things...both nest and nest egg at the same time.

cityunslicker

spot on, in the last crash many areas experience falls of well over 50%, some even up to 80-90% - flats in poor and inaccesible parts of london - like graves end, dartford etc.

However, a nice 5 bed detached in surrey etc barely lost 10%, even at the bottom of the market. This is before you even factor in good agents/bad agents etc.

Localism is everything in house prices; as you point out national statistics are utterly meaningless.

kinglear

Speaking as a developer, I can assure you that everything relates to location.Quality of build, size etc etc have a bearing but tiny in comparison to the location. Your remarks about house prices in Surrey from say 1989 - 1994 are correct, and so they are for lots of other enclaves. What is worth the money is the piece of ground the house is built on - which is one of the reasons that in Australia property taxes are based on the land, not on the building on it.

kinglear

.. and by the way, although I find Kirstie attractive, I'm sad the somewhat undressed young ladies are no longer in evidence.

Sam

You can live in a house (even in lots of house). You can't live in some shares. People (not unreasonably) worry about having a secure roof over their heads before worrying about investments.

Quinn

"...22 Acacia Avenue..."

Do we have a closet / reformed / actually existing Iron Maiden fan around these parts?

Elias/Cognitariato/Left Libertarian

In my country, Greece, people have their own unique relationship with the meaning of the House.From the ancient years,as an opposite force to the death instict.Well, the prices are high here because of the STRONG DESIRE,the almost ''mechanical'' demand for houses.The idiosyncracy in the prices is because of the non-disclosured limits between the meanings of Use and Ownership.A lot of people made money by building houses,but now,in Greece,the banking octapus started to win the game...A young family is prisoner of its own desire for a Home...Nomads in the cities, the modern Greek are often afraid of their future and the use the ancient custom of building houses as an exorcism of this fear...

kinglear

I love that from Elias. The pagan symbolism of building a house to exocise fear is perfect. Except you're then petrified the mortgage will gobble you up...

dearieme

I wonder how many people buy rather than rent as a way of ensuring that they are in the catchment area of the school they want? Any figures on that, anyone?

Dipper

A housing market crash is more like a phase transition. The market disappears, and then eventually reappears with prices at a much lower level.

The number of transactions is the key. Well down ...

Schumacher Homes Press

I would rather rent anyway. It has many more benefits with the housing market the way it is.

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