tag:blogger.com,1999:blog-2948538160252327076.post2686943754641340906..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: the daunting dynamics of Staffordshire house pricesAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-2948538160252327076.post-84688412909471361902011-01-17T20:17:22.330+00:002011-01-17T20:17:22.330+00:00The issue is the rise from around 1995, not just f...The issue is the rise from around 1995, not just from 2000. London prices tripled in ten years 1995-2005, and in the ten years up to the peak whether it is 2007 or 2008 in your chosen region, the same tripling effect will be seen. It was an enormous bubble, and one which in the natural course of the bust would in real terms see a total drop of two-thirds. Even if you feel there is real earnings growth over the cycle, that has to be tempered with the fact that busts 'overshoot' before the final low. Google on " Lifecycle of a Bubble" or go to:<br /><br />http://www.housepricecrash.co.uk/graphs-bubble-lifecycle.php<br /><br />B. in C/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-20509103555956865552011-01-16T14:30:45.967+00:002011-01-16T14:30:45.967+00:00Strange comments-all the data shows is that the pr...Strange comments-all the data shows is that the price of a house has grown by c 20% more than earnings.<br /><br />This does not, in itself, seem like a big deal and much less dramatic than the 100% rise, that the chart shows.<br /><br />Jens-that is simple arithmetic.<br />Anonymous-no, comopunding does not make much of a difference for a 2% interest rate.james cnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-90104275434127411552011-01-15T23:22:28.975+00:002011-01-15T23:22:28.975+00:00Crap housing - that is England.Crap housing - that is England.Mnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-83443895301619797442011-01-15T01:14:29.903+00:002011-01-15T01:14:29.903+00:00James, if what you said was true then we wouldn...James, if what you said was true then we wouldn't have had a banking crisis. Obviously, something big happened, and a doubling of house prices in Staffordshire might have something to do it.<br /><br />It is one thing for a fancy house in London to increase in value far faster than incomes. That could be explained by growing income inequality, or an influx of rich Russians. But Staffordshire? Give me a break.Jensnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-69392366914843995272011-01-15T00:56:41.878+00:002011-01-15T00:56:41.878+00:00James c you are obviously a financial illiterate. ...James c you are obviously a financial illiterate. I bet you aren't rich. Two percent real growth over ten years by the miracle of compounding is a big deal.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-87989080470969565212011-01-14T21:50:57.013+00:002011-01-14T21:50:57.013+00:00House prices doubling over 10 years equates to 7% ...House prices doubling over 10 years equates to 7% compound p.a. That is maybe 2% above the rate of nominal earnings growth.<br /><br />So house prices might have grown by 2% above earnings for 10 years-hardly a big deal.james cnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-24440492936608724152011-01-14T17:30:56.079+00:002011-01-14T17:30:56.079+00:00When deflated by the RPI, the lower final point gi...When deflated by the RPI, the lower final point gives a better indication of value - I would guess in this case about 20%?<br /><br />What is keeping prices up, in my view, are the artificially low interest rates. One of the desired effects of low interest rates, on the part of the Bank of England and the government, is to make people feel wealthier than they ought to feel and thereby to maintain consumption. Eventually either interest rates will have to rise and house prices revert to genuinely sustainable levels, or homoe-owners will just take a further massive hit by way of unchecked inflation. Either way, real lower values will assert themselves and home-owners will feel less well off than at present.<br /><br />B. in C.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-9323233164281335632011-01-14T12:43:01.688+00:002011-01-14T12:43:01.688+00:00Nice part of the country.Nice part of the country.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-32253702246718648182011-01-14T05:24:07.494+00:002011-01-14T05:24:07.494+00:00Little boxes in neat little rows.Little boxes in neat little rows.WFhttp://wretchedfinance.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-50867841694984360782011-01-14T04:02:32.160+00:002011-01-14T04:02:32.160+00:00Funny, I thought you had never been further north ...Funny, I thought you had never been further north than the Watford Gap.<br /><br />GrahamAnonymousnoreply@blogger.com