The Times - Rightmove Index Rises Again, Market Bottomed Back In Winter

[Kazuya]

.

Snippet from the Rightmove HPI article you attached.

Having seen average asking prices rise by nearly 7% so far this year and transaction levels bottom out,

the quandary for many existing and aspiring home owners is the future direction of the housing market

given the continuing UK and global recession. We see three possible scenarios: a ‘Double Dip’, a ‘Steady

State’, or a ‘Resurgence’.

• The ‘Double-Dip’ scenario would see asking prices falling by 10% in the second half of the year

to end 3% down overall in 2009, as mortgage lending remains tight, unemployment continues to

rise, and many more repossessions come to market. This would give a further window of

opportunity for bargain-hunters who missed out on the best buys last winter.

• The ‘Steady-State’ scenario would see prices stay flat for the rest of the year, ending at circa 7%

up, as both mortgage availability and the number of sellers coming to market remain at

historically subdued levels.

• The ‘Resurgence’ scenario would see prices go up by a further 5%, ending the year 12% up, as

buyer interest and mortgage availability pick up significantly while supply remains relatively

constrained.

Edited July 20, 2009 by Kazuya

[Kazuya]

In a further sign of the resurgence of the market, these bargain-hunters are now putting their own houses on the market, with Rightmove recording a 20 per cent increase in the number of houses for sale on its website.

Thats it sheeple, put your houses up for sale now thinking a 2007 recovery is on the way, it'll help get the falls going again

Its good to see Rightmove considering the double-dip scenario which IMO is the most likely. The government have only plastered over the "cracks" which are beginning to show again.

[spline]

They seem to be plumbing for the ‘roughly flat’ outlook (although RM’s index is clearly ‘frothy’ and likely to settle back again, also particularly as it’s not SA). Also broadly consistent with the Tradition property futures suggesting that’s there’s only £1.9k left to go on Halifax.

Edited July 20, 2009 by spline

[Montauk]

http://www.timesonline.co.uk/tol/money/pro...icle6719661.ece

People are simply refusing to price their properties any lower. Forced selling is being contained by record low rates, and those that do move are renting out instead. Sustainable?

Ya know, you guys is so open to bullsheet. There ain't no way commercial props are gonna weigh in at above 2007 prices for years! Put that in your pipe and smoke it! So now we gonna see anotha SECOND wave of defaults, big time. The big banks ah gonna take anotha BIG hit real soon. Enjoy goin down, ya know what I'm sayin?

[Mikhail Liebenstein]

Thats it sheeple, put your houses up for sale now thinking a 2007 recovery is on the way, it'll help get the falls going again

Its good to see Rightmove considering the double-dip scenario which IMO is the most likely. The government have only plastered over the "cracks" which are beginning to show again.

Yes indeed, its right move.

I can say now this is entirely due to more high end (over £1m) homes being put on the market, many not having sold 12-18 months ago.

This is starting to looking like early 2008 again. Heading down!!!!!!!!!!!!

[Bruce Banner]

I bet we'll hear more from the mainstream press and television news than we did last month when they reported a 0.4% drop.

All they, and the lenders etc, have to do is report one month up, one month down etc and a complicit press will ensure that joe public get the impression of "green shoots" .

Of course, it won't make a blind bit of difference in the end, house prices have a lot further to fall yet.

[Sybil13]

January 2009

Miles Shipside comments: Would-be buyers are sniffing that 2009 could be the year of the property deal. The market has plumbed the depths, with agents reporting sales being achieved at a discount of around 25% from peak boom prices.....

February 2009

Even though the anticipated 75,000 repossessions for 2009 could add over 6,000 properties a month to the depressed monthly listing figures, property coming onto the market still remains massively below industry norms......

Shipside explains: Estate agents always deal with a vast number of enquiries, often needing to register 100 applicants for every successful sale. However, current pent-up demand is being frustrated by banks,Building Societies and, indeed, the taxpayer contributing insufficient funds to potential borrowersThat leaves a shrinking number of lenders who are cherry-picking the most credit-worthy borrowers, whilst arguing amongst themselves as to who is to blame for this crisis as opposed to solving it.

Some agents report only one deposit-strapped enquiry in 40 being able to get a mortgage, with current deposit and income multiple restraints singling out aspiring first time buyers. Unfortunately, the current enquiry feast is being blunted by the mortgage famine. While leaving a great opportunity for the cash-rich to strike a deal, it also highlights the extent to which the financial sector needs to put its house in order before market recovery can truly begin.

March 2009

Unsurprisingly, the majority of prospective spring sellers are being deterred by the conditions attached to doing a deal in the current market. There is evidence of buyer

appetite at around 25% below peak prices and this level of discount is likely to be a major factor preventing many aspiring sellers from coming to market....

The small increase in asking prices may also reflect estate agents having to compete for the limited numbers of good quality homes coming to the market. To win

new instructions, agents are agreeing to vendors demands and marketing properties at what seem like unrealistically high prices for a short period of time. They then have to persuade vendors to reduce the price to the point at which buyer interest is going to be found.

Disappointingly too, the minority of buyers and sellers who are adjusting to the new market reality are finding that mortgage funding from the banking sector remains scarce, decreasing the odds of a speedier market recovery. Miles Shipside, commercial director at Rightmove comments: Some sellers are still pricing wishfully high, though it is encouraging that elements of the market have adapted relatively quickly to find a new price floor at a discount of around 25% from peak. We are seeing a

big jump in enquires, looking for those best buys. However, it is disappointingly predictable that the banking sector is still in the early stages of coming clean about its levels of toxic debt, limiting funding for one of the few bright spots of consumer demand in the economy. Until banks get their own houses in order, the active minority of sellers and agents who have drastically adjusted pricing will remain frustrated by the limited functioning of the financial services sector.

Shipside comments: Rightmove advised sellers in March last year to get smart and price sensibly rather than chase prices down in a deteriorating market. Those that acted smartly may well have sold at half the discount that those who over-priced are now facing.................."

April 2009

Feedback from estate agents suggests that prices actually being achieved are still around 25% below peak prices in many instances, though quality homes in desirable locations perform better. Those parts of the country that have adjusted to the credit famine have found that prices have stabilised at around this level, giving substantial leeway for sales activity to increase if credit restrictions were to be relaxed.

The length of time to sell could be further reduced by sellers launching their property onto the market at a lower initial price, rather than reducing it after a few weeks when no buyers have appeared. Whilst Rightmove web traffic analysis shows reducing the asking price generates renewed interest, the initial marketing impetus of a “new to market†property has been lost. Rightmove is seeing around 16,000 asking price reductions of 2% or more each week. These might be a reflection of misplaced seller optimism

May 2009

Shipside comments: While buyer sentiment is improving, with email enquiries to agents via Rightmove so far in 2009 running at 109% ahead of last year, the number who can proceed has been savaged by the mortgage famine. Pricing below your local competition, if you can, is vital in order to achieve a sale. With deals being done at prices 25% below the peak of the 2007 boom, it s not surprising its taking some sellers a long time and some hefty price slashes to adjust to the new 2009 price floor.

Shipside comments: At present it looks like the market is bumping along the bottom in terms of transactions, with limited supply preventing further price falls. This is a welcome element of stability though being on ones knees, whilst stable, is not a desirable position for any length of time"

June 2009

Miles Shipside adds, Its a mistake to confuse the upturn in enquiries and sales with a return to a more normal market. While conditions are much improved on the darkest days of last year, we are now starting to see some big distortions and wild swings due to the combined effects of recession and restricted mortgage availability.....

A large rump of less saleable stock remains, with average stock per estate agency branch remaining stubbornly consistent at just over 70 for the last six months. We would normally expect this to fall, given the lack of new stock coming to market, and the pick-up in sales and mortgage approval figures. This confirms reports that fresh stock of the right type is saleable if priced correctly. However, older stock is far less saleable if it does not match current mortgage lending criteria. We report a further 62,519 price

reductions this month of 2% or more in Rightmoves Property Deal Weekly, compared to 59,072 in our May report. Given lenders tight lending criteria and their raising of fixed rates, the pool of potential firsttime buyers who can mop-up this less saleable stock, which includes repossessions, is reducing further.

With limited funds to lend, rationing of mortgages by raising interest rates and requiring large deposits is likely, as demand recovers with the increased number of sales. Unless the markets for wholesale mortgage funding re-open, volumes will remain muted due to a distorted reliance on equity-rich buyers.

"Market bottomed back in the Winter" !! ?

July 2009:

[

b]Window closing for bargain buys[/b]

The benefit of hindsight shows that the lowest ebb of prices, and thus the best time to pick up a bargain, was last winter. Prices were in freefall in the second half of 2008 as desperate sellers reduced prices by circa 2% a month, yet most buyers still held back leading to a 50-year low in transactions. As in most market corrections, there was a price undershoot that appears to have rectified itself this spring, with average rises of circa 1% a month. The window of opportunity to pick up the best buys in popular areas in this phase of the market is therefore closing.

But Shipside then goes on to speak about:

Double-Dip scenario would see asking prices falling by 10% in the second half of the year to end 3% down overall in 2009, as mortgage lending remains tight, unemployment continues to rise, and many more repossessions come to market. This would give a further window of opportunity for bargain-hunters who missed out on the best buys last winter.

So come on folks on what bases is RM calling the bottom of the market? Has anything changed ? Were the lenders and Moodys wrong whey they said "the assumption now is 40% falls"? Are the economists wrong to say that property is still 40% overvalued? Was the IMF wrong to warn of a LONG HOUSING SLUMP?

SO HAVE THE SELLERS THAT ARE INCREASING THE ASKING PRICE OF THEIR PROPERTIES ACTUALLY REDUCED THEM FIRST?

Have you seen properties at the new floor that Shipside speaks about at 25%?

That is £300000 property NOW £225000 ? So is RM's average asking price based on what were £300000 properties in 2007, not on what was an average property at peak according to Halifax etc which was a £200000 property now £150000 ?

I just don't understand. We hear that valuations are coming in at 25 - 30% below peak ( up to 40% for remortgages), causing chains to break and confirming that lenders are expecting significant further falls so on what basis has RM concluded that the bottom was Winter 2008?

Has mortgage lending improved?

Have the lenders suddenly got more funds?

Are approvals significantly up? We need 90000 + for the market to stabilse, currently we have around 40000.

Mortgages Will Get More Expensive

Lenders have quashed expectations of a return to the days of high loan to value (LTV) mortgages by warning that funding restraints are ongoing and unlikely to ease in the near future.

Dispelling any hopes that there is a glut of cheap credit set to come on stream which could boost the housing market, the Council of Mortgage Lenders (CML) said its members' ability to extend more credit was 'constrained for the foreseeable future.'.....

Look at the list in this article and ask yourself if ANYTHING has changed Why House Prices Have Further to Fall

If anything the reality of the restrictions in the mortgage market have become more apparent since the start of the year when RM said that sellers needed to reduce by 25% .

Every day we have anecdotal evidence on HPC of property going Under Offer or STC and then coming back on the market as buyers find they cannot get a mortgage of a mortgage for the value they have offered or can't sell their own property etc etc. .

The advice surely is still Stay Away From Property It Has Much Further to Fall

As James Furgurson said in his article House Prices Could Fall Another 40% From Here:

...almost no matter how you look at the UK housing market be that through the UK house price to history ratio; the house price to GDP ratio; the ratio of house prices to other assets, or house prices to earnings you get the same sort of target fall: 40-50% in real terms. Given that 1989-1996 saw a real-terms drop of nigh-on 40%, that's not so surprising.

IMO WE STILL HAVE A LONG LONG WAY TO GO BEFORE WE ARE ANYWHERE NEAR THE BOTTOM OF THIS MARKET

Edited July 20, 2009 by Sybil13

[interestrateripoff]

http://www.timesonline.co.uk/tol/money/pro...icle6719661.ece

Property prices in England and Wales rose by nearly £1,500 this month while the number of sellers jumped by a fifth, boosting hopes that the housing market may be over the worst.

The average home is being put on the market with a price tag of £227,864, up from £226,436 in June, figures from Rightmove, the property website, show. This is the fifth rise in the past six months, prompting Rightmove to say that the market has already bottomed out.

Miles Shipside, commercial director of Rightmove, said: “There were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market. In most parts of the country, prices have consistently improved during spring.â€

House prices plummeted by more than 20 per cent in the 18 months after the market peaked in autumn 2007, but many of the leading house-price surveys have registered rises in recent months.

The latest promising figures come only a week after new figures showed that the number of estate agents expecting house prices to increase in the coming months outnumbered those predicting further falls for the first time since May 2007.

As the rapid fall in house prices eased, activity in the market picked up as more bargain-hunters — confident that prices did not have much further to fall — joined the fray. In a further sign of the resurgence of the market, these bargain-hunters are now putting their own houses on the market, with Rightmove recording a 20 per cent increase in the number of houses for sale on its website.

“The increased confidence and activity is tempting more sellers to test the market as they seek to take advantage of the smaller price difference to trade up to a better home,†Mr Shipside said.

Estate agents recently sounded concerns that if there was a flood of new properties coming on to the market, prices could start to fall again as the competition between buyers eased.

Fears over unemployment, which recorded a record rise in figures in the three months to May, is also likely to hamper any full-scale recovery.

Rightmove said that it foresaw the market remaining stable for the rest of the year, with asking prices — which have already risen by 7 per cent so far this year — remaining flat as a lack of mortgage lending delays the recovery.

However, it said that if more lenders loosened their lending criteria, prices could rise by a further 5 per cent this year, taking the total annual gain to 12 per cent.

Rightmove also conceded that there could be a “double dipâ€, with asking prices falling by a further 10 per cent unemployment continuing to rise and the number of repossessed properties coming onto the market surging.

Excellent we could have an annual gain of 12% by the end of the year, my £1.38bn pound will be achieved even quicker if 12% YoY can be sustained.

And then the buggers have to go and be negative and mention unemployment. I was feeling all happy clappy until they went and depressed me.

[Sybil13]

Thats it sheeple, put your houses up for sale now thinking a 2007 recovery is on the way, it'll help get the falls going again

Its good to see Rightmove considering the double-dip scenario which IMO is the most likely. The government have only plastered over the "cracks" which are beginning to show again.

In an article about negative equity recently it said:

As the FT points out all these people stuck in their homes are creating a glut of hidden property , which in turn is likely to depress house prices further. Even a short term rise in prices, Fitch argues, is likely to make things worse in the longer term, by encouraging trapped sellers to put their homes in the market, which in turn will push prices down again. It sounds like a vicious circle with no way out, for the immediate future at least

[Mikhail Liebenstein]

The sheeple definitely need to adjust to a new house price double think. They need to believe that houses were never actually worth what they were in 2007, even if they have a ludicrous valuation for their own home in their heads, they need to be able to deny this to themselves. Right now many cling to 2007, they need to be able to say 'no it was never really worth that and I never believed it. It was just that dame estate agent.' At that point they will all accept lower prices.

[Bloo Loo]

Thanks to Sybil.

Maths, its never a strong point of VIs...

By the way, I have a car for sale, its not sold, so Ive issued a new ad, 10% higher, to attract a more effluent buyer.

[Realistbear]

http://www.timesonline.co.uk/tol/money/pro...icle6719661.ece

Fears over unemployment, which recorded a record rise in figures in the three months to May, is also likely to hamper any full-scale recovery.

Fear (sentiment) + unemployment = continuation of the sharpest downward trajectory in house prices ever recorded.

EAs are in the fight for their lives and if the government can consistently lie to us why not EAs and the VI economists that agree with their propaganda?

[Democorruptcy]

The problem is there is never anyone on TV giving a HPC type view. There seems to be an increasing of HPI'ers given air time and the sheeple are being brainwashed again.

[BlackSwan]

Have EA's contributed to their own downfall in all this?

Those that are still waiting for the market to correct to its proper state will not be buying for another 6 months at the very least. Panicking cash buyers/equity swappers will now wash through even more quickly than before.

However, negative equity and the slow return to normal lending practices mean that supply of new properties and buyers will remain low.

Thus EA's will have even less properties to sell than before as the stand-off has reached a stage that I woudln't have foreseen a few months ago.

Edited July 20, 2009 by BlackSwan

[Dino]

The problem is there is never anyone on TV giving a HPC type view. There seems to be an increasing of HPI'ers given air time and the sheeple are being brainwashed again.

On the contrary, there's nothing TV likes better than doom and gloom.

Remember last year when prices were falling heavily? Program after progam had JD preening himself in front of the cameras, warning us of the armageddon scenario fast approaching.

But now prices have stopped falling, JD is redundant.

The BBC isn't HPC, they can't just pretend the market is falling when the facts show different.

[swissy_fit]

When the crash is this boring it almost makes me curse my addiction to this site.

Aren't you a doc?

Be grateful you're not addicted to something worse in the med cabinet!

I know what you mean though, I've been searching for a leechblock for IE.

[mew too]

Have EA's contributed to their own downfall in all this?

Those that are still waiting for the market to correct to its proper state will not be buying for another 6 months at the very least. Panicking cash buyers/equity swappers will now wash through even more quickly than before.

However, negative equity and the slow return to normal lending practices mean that supply of new properties and buyers will remain low.

Thus EA's will have even less properties to sell than before as the stand-off has reached a stage that I woudln't have foreseen a few months ago.

yep, the irony of it - even in a market that 'appears' to be recovering the EA's are still hurting on low volumes, surely at some point they will realise a short sharp correction and quick pain that will wash out the repos and forced sellers and new amateur landlords who really want to sell - increasing volume and business is better for them than this slow grind, I wonder how much longer it can continue. I suspect when the wind changes direction again they won't be so keen to talk it up.

[francis]

Confirmed - if you can actually get what their calculator says,

then buying a flat looks possible for the first time in about 6 years.

Hate to say it, but if lending at the multiple does become available,

then it could really be on the way back up =(

Spot on. As I said in my "The British are spending lemmings" post (http://www.housepricecrash.co.uk/forum/index.php?showtopic=120303), people are now hardcoded to spend, and buy properties. People want to buy because property is "a great long term investment". We are outnumbered. There are more lemmings out there than there are people like us. If the banks open up the lending taps (with coersion from the government) prices will go up. If prices start going up the risks of banks losing money on this lending is reduced. They will lend even more and the whole merry-go-round starts again. Joy!

[Bloo Loo]

snip

The BBC isn't HPC, they can't just pretend the market is falling when the facts show different.

sorry, asking prices are NOT facts.

Like the CML saying lending multiples are now below 3...on average...but wont disclose how they calculate the figure.

The BBC do this all the time: for example, the budget speach...it trundles on but the beep interupt what the man is actually saying and get their "expert" on to comment. we miss a vital set of words and nuances in the speach.

and dont forget also, the beeb news is 90% HEADLINES...to get you to watch and stay tuned to the next program.

Edited July 20, 2009 by Bloo Loo

[Jim B.]

This Rightmove index is irrelevant. Firstly it is just 'asking' prices, you need to look at completed sales prices.

And perhaps more important is that it is an average price for houses being advertised - anyone with a fraction of maths will realise if more expensive homes are being put on (i.e. people who have lost well paid jobs, people trading down) then it will increase the average. It tells you absolutely nothing about what house prices are doing in terms of sales.

[Bruce Banner]

........ doom and gloom........

[Lepista]

Thanks to Sybil.

Maths, its never a strong point of VIs...

By the way, I have a car for sale, its not sold, so Ive issued a new ad, 10% higher, to attract a more effluent buyer.

I smell a rat...?

[the flying pig]

does anyone have access to a few years' worth of RM data? i wondered when RM peaked and troughed, and how far the trough was from the peak... but the data on RM's website [based on my quick search] appears to go no further back than a year...

[Timm]

OK, I've read the rightmove report now, looked at the graphs and carefully considered the content.

The only thing I can see in any of it is the ending of the bull trap.

[Cherubium]

The most important item in that article is '20% more houses added to the market last month.'

Very low demand, very low supply = prices stable or rising

Very low demand, moderate supply = prices could start falling again.