From the latest monthly survey of housing by the Royal Institute of Chartered Surveyors (Rics) — highlighting the direction of change for house prices:
But wait — Rics also reports that while there was a drop in new buyer enquiries for the fifth consecutive month, should a slide in the number of people putting houses onto the market for sale continue, (the net balance shifted from +22 in September to -4 in October) it could ease pressure on prices. As Jeremy Leaf from Rics put it:
With both supply and demand falling transaction activity is set to remain at relatively flat levels for the foreseeable future. Agents may be cautious about what this could mean for house prices in the short term, but dramatic falls are likely to be limited by a gradual drying up of stock coming to the market.
Meanwhile, Citi is on hand to offer some perspective:
In the last couple of months, the net balance on house prices has been roughly as negative as in Q4-07, as the credit crunch began to spread. One key difference, however, is that while price declines are widespread (hence a highly negative balance for the price series), at this stage price declines are relatively mild. In total, 55% of surveyors report that house prices are falling, and 80% of those report that prices are down by less than 2% over the last three months. So only 11% of surveyors report price declines of more than 2%. By contrast, in November 2007, when the overall RICS price reading was similar to now (minus 46%), 21% of surveyors reported price declines of more than 2%. As a result, while housing is undeniably weakening, it does not appear to be crashing as sharply as in late- 07/early 08.
Still, we’re betting this won’t do much to cheer Redrow’s Steve Morgan.
Related links:
House price rant – FT Alphaville
Double trouble for UK house prices? – FT Alphaville