Is The Property Market Still In Deep Recession? - No 2

[Alfie Moon]

Last week I started a thread with the title posing the question - is the property market still in deep recession? - Discuss.

I posed the question to counter the spin about the amazing 'recovery' in the property market.

When you look at the levels of successful transactions it is very apparent that the property market remains in a deep depression with historically low levels of successful sales and hence the incomes of Estate Agents is paltry.

Using Worcester as an example I have used Home.co.uk to compare the numbers of sales achieved each month from 2006 till June 2009. The stats are very revealing about the reality of the property market. I will try to present the stats but unfortunately the forum does not accept tabulated material.

For 2009 in Worcester:

Jan = 45

Feb = 60

Mar = 95

Apr = 77

May = 95

Jun = 76

For 2008 in Worcester:

J = 89

F = 112

M = 96

A = 105

M = 114

J = 150

J = 93

A = 110

S = 85

O = 82

N = 79

D = 65

For 2007 in Worcester:

J = 189

F = 153

M = 175

A = 214

M = 193

J = 192

J = 160

A = 244

S = 138

O = 165

N = 217

D = 139

For 2006 in Worcester:

J = 144

F = 187

M = 229

A = 259

M = 217

J = 219

J = 268

A = 247

S = 206

O = 248

N = 217

D = 249

Totals for Worcester:

2009 = 448 (so far up to end of June)

2008 = 1180

2007 = 2179

2006 = 2690

I'll say it again Estate Agents, if you want a sustainable recovery in the property market (and return to 2006/07 levels of sales) you will have to cut asking prices aggressively and keep cutting until sales go through successfully.

It would be interesting to see similar data for other people's locations.

[blankster]

If it was in dep recession the monthly sales would be in single digits.

[Lepista]

Not going to bother posting all the months, but the totals are as follows:

"Middlesborough"

2005: 4,530

2006: 5,187

2007: 4,866

2008: 2,495

2009: 723

so, on target for about 1/3 of the peak sales.

[CountryMove]

Last week I started a thread with the title posing the question - is the property market still in deep recession? - Discuss.

I posed the question to counter the spin about the amazing 'recovery' in the property market.

When you look at the levels of successful transactions it is very apparent that the property market remains in a deep depression with historically low levels of successful sales and hence the incomes of Estate Agents is paltry.

Using Worcester as an example I have used Home.co.uk to compare the numbers of sales achieved each month from 2006 till June 2009. The stats are very revealing about the reality of the property market. I will try to present the stats but unfortunately the forum does not accept tabulated material.....

....I'll say it again Estate Agents, if you want a sustainable recovery in the property market (and return to 2006/07 levels of sales) you will have to cut asking prices aggressively and keep cutting until sales go through successfully.

It would be interesting to see similar data for other people's locations.

Cardiff:

2006: 9,313

2007: 7,900

2008: 3,839

2009: 1,616 (to June)

Edited September 9, 2009 by welsh1

[DaisyB]

I can't upload the spreadsheet but this is what the data looks like when graphed. Time permitting I'll add some more postcodes for comparison

[gravity always wins]

I can't upload the spreadsheet but this is what the data looks like when graphed. Time permitting I'll add some more postcodes for comparison

Nice graph, is that Gloucestershire?

Nov. - Dec. should be a ball.

[SwampDonkey]

IPSWICH:

2006: 3638

2007: 3112

2008: 1452

2009: 656 (to end of June)

[DaisyB]

Nice graph, is that Gloucestershire?

Nov. - Dec. should be a ball.

Worcestershire, from the OP's data. Will add Glos if time permits

[Godley]

Interesting.

And supply?

[Alfie Moon]

I can't upload the spreadsheet but this is what the data looks like when graphed. Time permitting I'll add some more postcodes for comparison

Thanks for doing the graph Daisy. Just need to be made compulsory for Worcester Estate Agents to have a large copy of it on display in their front window for all and sundry to see.

In terms of whether the property market is in recession or depression Wikipedia's page on economic depression includes the following:

There is no widely-agreed-upon definition for a depression, though some have been proposed. In the United States the National Bureau of Economic Research determines contractions and expansions in the business cycle, but does not declare depressions.[1] Generally, periods labeled depressions are marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced using current resources and technology (potential output).[2] The economic theory most concerned with periods of inflation, deflation and depressions is known as the Kondratieff wave. Another proposed definition of depression includes two general rules: 1) a decline in real GDP exceeding 10%, and 2) a recession lasting 3 or more years.[3][4].

Not quite at 3 years yet but I'm sure we will get there. Decline in 'productivity' for the property market? - I suspect that criteria is well and truly met.

Edited September 9, 2009 by Alfie Moon

[DaisyB]

This graph adds the data from Home.co.uk for Cheltenham, sorry about the 'barbie pink' it is the next colour in the default series! The fit is quite good though, v similar drop in volume

Edited September 9, 2009 by DaisyB

[Alfie Moon]

It is also probably worth adding that Rightmove lists 25 Estate Agents operating in sales in Worcester.

[gravity always wins]

This graph adds the data from Home.co.uk for Cheltenham, sorry about the 'barbie pink' it is the next colour in the default series! The fit is quite good though, v similar drop in volume

Cheers DaisyB this my area.

Glad to see local estate agents are not as busy as they say.

Expecting to see uptick till Oct then down till Jan.

Transactions will only start to increase once prices are discounted.

Noticing Sold signs going back to for sale round here.

[CountryMove]

Interesting.

And supply?

What do you think of this as a proxy for supply/demand?

Comparing number of houses sold at a certain price (using Zoopla in this case) with houses currently for sale at that price (Rightmove). I have chosen high value houses as there are fewer to count up on Zoopla (is there an easier way to do it?!)

eg:

Houses sold in Monmouthshire the past 1 year:

£1m+ = 0

£500k-£1m = 11

Houses sold in Monmouthshire in the past 3 years:

£1m+ = 5

£500k-£1m = 99

Houses currently for sale (may be some double-counting if house listed more than once):

£1m+ = 15

£500k-£1m = 124

Thoughts?

[DaisyB]

This one includes Birmingham. I agree re adding supply figures, but don't know where to find the data although it presumably exists as the average number of properties on EA books is often quoted in articles

I have to go and do something constructive now

[the stig]

Peterborough:

Year____Total sold____Avg price across each month of the year

2004____4720________£136,410

2005____3739________£139,245

2006____4987________£148,926

2007____3810________£156,622

2008____1888________£151,242

*2009____670________£137,063

* Up until July 2009

Edited September 9, 2009 by the stig

[the stig]

Forgot to add, the average no. of transactions per month for 2004/5/6/7 was around 350-400. This dropped to around 150 p/m in 2008.

The no. of transactions for July 2009? 57

[lorna1999]

BN1 - large part of Brighton - Jan to June figures for comparison

2006 - 957 (year total 2112)

2007 - 891 (1760)

2008 - 510 (885)

2009 - 360

However, from Jan to June 09, sales figures show a definite Spring bounce :

jan 37

feb 36

mar 57

apr 56

may 71

jun 103

Compare to 2008 :

jan 93

feb 109

mar 75

apr 76

may 92

jun 65

jul 89

aug 68

sep 52

oct 51

nov 57

dec 58

and 2007 :

jan 148

feb 136

mar 164

apr 123

may 152

jun 168

jul 138

aug 195

sep 150

oct 142

nov 135

dec 109

Who knows where it is headed next??

[juvenal]

Micro view:

I watch eleven local postcodes covering approx 400 (mostly family) houses in a bit above average price area of Poole.

Total sales as follows.

2005 11

2006 18

2007 21 (tranche of newbuilds sold)

2008 10

2009 6 so far

Less than a third of peak sales.

Looks consistent with other posts.

[BlueRat]

B91, central Solihull (rather posh):

New builds flats struggling a bit

[nobody777]

I have been guessing a further 10% or more rise in prices due to government interventions before the next election.

Reading this interesting blog I may be a little optermistic and pleased its been brought to my attention.

[Alfie Moon]

Interesting.

And supply?

Did you see the Rightmove ad on TV last night boasting that they have over a million properties for sale on their website?

[DaisyB]

I've added the Brighton data posted by lorna1999, pattern of decline remains the same

[Alfie Moon]

Perhaps some of us should be doing letters to our local Newspaper's 'Letters to the Editor' page that give the transactions stats for 2006, 2007. 2008, 2009 to help joe and jane public grasp what a damp squib the so called recovery has been - that the number of sales being achieved has remained deep in crash territory/historically low levels throughout this year and the 'recovery'. Why have transactions remained so amazingly low? The letters might explain that this is because property prices are far too high and remain way out of reach for the vast majority of the population. The letters might also point out that whilst the small MoM prices rises reported by Nationwide and Halifax this year, in a small number of months, it has happened with historically low numbers of completed sales and the 'recovery' has been a damp squib - despite the context of the lowest Bank of England Base Interest Rate for hundreds of years and massive amounts of taxpayers money injected into the economy via QE. What will happen once interest rates start rising, the QE tap is turned off, taxes rise, unemployment keeops galloping along, massive cuts in public services are introduced, etc. (all due before or shortly after the General Election next year) the letters might ask.

[grumpy-old-man-returns]

Interesting.

And supply?

massive oversupply UK wide & hardly any demand = property depression

just wait til inflation hits in 2010.