Property prices thread

[Admiral Yi]

Damnit. Now I want to watch The Big Short.

Margin Call is a better movie.

[Valmy]

Damnit. Now I want to watch The Big Short.

Margin Call is a better movie.

Is it? 

They are both amazing, that is for sure. I think I admire Margin Call a little more just because when it came out the economic crisis was virtually current event. Whereas The Big Short came out many years later.

[Sheilbh]

Of the two I'd also go for Margin Call.

[Josquius]

I've never heard of margin call. Big short is good though.

[Admiral Yi]

The Big Short is an adaptation of Michael Lewis' book.  I've only read a part of The Flash Mob, but my distinct impression is his entire career is sensationalizing complex issues.

The Big Short paints a picture of an industry of loud, unlikeable greedheads with their heads in the sand.  And our intrepid trio of courageous shorters swim against the stream to bet against them.  But Hank Paulson's brother ran a hedge fund that made a mint off of shorting MBS.  CDS was a systematic risk precisely because lots and lots of people had bought them.  But Paulson's hedge fund, and the other hedge funds that shorted MBS, didn't make their trades barefoot while listening to shitty metal or work out of their mom's garage so they aren't cool enough for the movie.

Margin Call is a great story about believable human beings confronted with the information that they can only save their own company (and their own net worth) by throwing every other person in the world under the bus.

[Admiral Yi]

Incidentally, "I like your shirt, do they make it for men too" is a perfect example of what I think of when I hear talking smack.

[The Brain]

Margin Call is much better than The Big Short.

[Tamas]

Margin Call is the better movie, but The Big Short is more entertaining.

[Richard Hakluyt]

Incidentally, "I like your shirt, do they make it for men too" is a perfect example of what I think of when I hear talking smack.

They are not clear on what a man is? Sounds woke to me!

[Tamas]

Surprisingly, Halifax has reported a 1.1% rise in property prices month on month. Their mortgage director did say the general trend remains down, but it does cast a doubt at the pace of it, and the number will no doubt be used by estate agents and pundits to prop asking prices up.

[Josquius]

I wonder.... as regular sales go down surely it'd make sense for average prices to go up as those who don't really care about mortgage rates make up a bigger percentage of the number of sales going on?

[Richard Hakluyt]

With inflation at 10% that is really quite a fall.

[Tamas]

I wonder.... as regular sales go down surely it'd make sense for average prices to go up as those who don't really care about mortgage rates make up a bigger percentage of the number of sales going on?

Good point.

The charts I posted a couple of years ago clearly show activity is falling sharply so that would support that read.

[Tamas]

I wonder.... as regular sales go down surely it'd make sense for average prices to go up as those who don't really care about mortgage rates make up a bigger percentage of the number of sales going on?

My favourite property market Youtuber agrees with this, claiming trading volumes going down (and they are down) price volatility goes up: https://www.youtube.com/watch?v=R7-ks0Vb-MQ

[Sheilbh]

We'll see. I'm not clear what the result will be from the financialisation side of housing interacting with the physical lack of supply. I think post-pandemic prices are probably a bubble (and I see lots of emails about price reductions right now) but I think there is a physical reality of more demand than supply and - so far - employment data has held up relatively well, wage growth has been higher than expected (but lower than inflation still) which supports that demand.

The BofE is also signalling that they're not necessarily anticipating significant further interest rate rises - I think 4% which is where we are now is roughly what the market is expecting the peak to be too. In addition the UK has (technically) avoided a technical recession so far.

There may be a general economic collapse - but I'm not sure. I think a lot depends on how Europe as a whole deals with energy in the next year when we'll have no Russian supply at all and the impact that has on prices and the economy and also whether the US (as is looking possible right now) actually manages a soft landing. And also China's course.

Overall I think there's lots of indications in lots of directions and I don't personally have any confidence in what I think will happen.