Blog
Housing - a buyers market
27th September 2008
This BBC report covers the RICS survey which finds that average asking prices are sliding at a rapid rate. When properties sell for a value close to their initial asking price, it is a safe bet that there are sufficient prospective buyers out there for sellers to hold on before accepting a bid. When asking prices are on the slide, this is indicative that weeks and months of waiting around for people to have a look round prompts home-owners to shave their valuations or perhaps take their properties off the market until market conditions improve. The latest figures from the RICS do indeed show a steep decline in monthly sales and a rising stock of unsold homes. This is classic microeconomics - unsold stocks drive prices lower.
The weakness of expectations from those participating in the RICS survey concerning new buyer enquiries, and new instructions of sell properties reinforces where we are in the market.
Jim wrote about volume indices as another guide to the future direction of prices in his recent blog.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.