Thursday 21 August 2008

How much will house prices drop from their 2007 peak?

My Fun Online Poll with over 700 votes cast shows that the expected overall drop is 42% with a standard deviation of 11%, which is slightly larger than the statistician's rule-of-thumb that SD = highest minus lowest divided by six, however 84% of results were within one SD of the arithmetic mean, so that looks pretty solid.

It'll be interesting to re-run this in six months' time or so, to see how expectations* have changed. Maybe I ought to rephrase the question to "By how much would house prices have to fall before you as a First Time Buyer or Buy-to-let Landlord would consider buying?".

NB - the options '10%' and '20%' were included for a giggle as much as anything - average prices are already down over 10% and steaming towards 20% - but only 4% of people fell for the trap and chose one of these options.

* I voted for '40%', BTW.

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