Friday, Feb 22, 2008
Deconstructing the Rightmove "bounce"
The Times: Misleading house price spike
With the economy teetering on the brink of recession and a massive slowdown in mortgage lending already under way, house prices jumped by an astonishing 3.2 per cent last month, according to Rightmove, the estate agency website.
But what is behind this gravity-defying leap in the cost of housing?
Posted by little professor @ 10:46 PM (856 views) Add Comment
6 Comments
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2. alan said...
"However, while average house prices may be showing signs of resilience, there are parts of the market that should be approached with great caution. One of these is new-build properties, and in particular new-build flats.
The problems in this market are manifold. First, the supply of new-builds, unlike Victorian terraces, is not fixed. In many city centres, such as Birmingham and Manchester, the proliferation of new-build apartment blocks has been depressing prices for years. In some cases, values are falling quite sharply.
Another issue, is that many developers offer incentives such as cashbacks. Buyers must realise that these sweeteners are funded out of inflated asking prices. If the cash is used as a deposit, buyers are effectively using a 100 per cent mortgage and exposing themselves to the risk of negative equity, especially in a static or falling market. They could also be committing mortgage fraud if they do not inform their lenders how they raised their deposits".
3. theboltonfury said...
for the millionth time, it's not a spike! It's asking prices, prices paid are still lowering. Poor journalism from a fool
4. Plato said...
Absolute rubbish Wrongmove. It won't save you or any other "World is Flat" believer. Figures taken randomly outside any meaningful time frame are worthless. Porkies are not going to convince anyone.
5. Papabear said...
Woudn't it be interesting if someone compiled an index of "offering prices", i.e. prices potential buyers were willing to pay. I wonder if the media would then quote this index especially when it would show drastic price falls. I cant believe the rightmove index is given such prominence especially as it is so open to manipulation...
6. crash bandicoot said...
I thought that it wasn't even a real spike. It was basically a 0% rise (or is that a fall - I'm an eternal optimist at heart), but the previous two months had been misread (misrepresented?) and were adjusted down by 3.2%. So to stand still, prices required a rise of 3.2% and so that's what happened. Things must be bad if they need to resort to this level of sculdugery just to generate a positive property story.