Asking prices fall 1.7% as properties for sale drops to record low
Asking prices fall as number of properties for sale drops to record low.
The price of a property coming onto the market has fallen by an average of 1.7%, according to new figures from Rightmove.
The drop means the average asking price for a property right now is £267,127, compared to £271,669 in October.
The property website says new sellers are asking for around £4,550 less in a bid to stand out against other properties and boost their chances of finding a buyer during the traditional winter slowdown.
The month of November has recorded a drop in new seller asking prices in eight of the last ten years.
However, the seasonal shift is the smallest for five years with average property prices up 8.5% (£20,890) on average over the year.
Record low stock
Rightmove says that as a result of 2014 being the most active year for property transactions since 2007, average property stock levels per estate agency branch have reached record low levels.
The property website, which covers 90% of the market, reports there are only around 60 properties for sale per agency, which is the lowest number ever recorded at this time of year.
The volume of property coming to the market is also slowing down, further limiting supply. This month new listings were down 1% on the same period last year and 15% down on last month.
So while prices are falling in the run-up to Christmas, there are signs of supply shortages compared to buyer demand, which could push prices up again in 2015.
Christmas traffic surge
Sellers tend to delay putting their home up for sale until January, after the festive period.
But Rightmove warns this is a wasted opportunity as its data shows interest picks up over the nine-day Christmas break, when people have more time on their hands to browse listings.
The website recorded over 500,000 visitors on Christmas Day last year. But come Boxing Day, this rocketed to 1.3 million visits, while New Year’s Day saw 1.4 million hits. By the first working day of the year 2.2 million potential buyers were visiting the site looking for a property.
Rightmove warns that sellers that wait until after the Christmas break to get on the market will miss the wave of activity from these festive window shoppers.
Instead it recommends listing just before Christmas to ensure sellers don’t miss valuable exposure time to this eager audience of potential buyers.
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@Hopefultom... I think you will find that in general, prior to 2014, I was extremely critical of Lovemoney and their swinging posts from Boom to Bust week to week on the housing market. My view has always been that they make bold statements about what is going to happen, with completely the wrong analysis, as it happens, also in this case suggesting that sellers are reducing prices to 'stand out' in a limited supply housing market. Actually, that makes very little sense. A limited supply housing stock 'should' give the sellers the upper hand, and in this case, prices are falling, which we rarely see, so there must be other factors. I've just highlighted the nice little stew pot that the government have brought together in the economy, and whilst I dont class myself as a pessimist or optimist, just an observer, and I hate the Lovemoney headlines and analysis, on this occasion, with all the messing with the economy, this time I can only see this causing hell in the housing market, despite the low interest rate cushion, on this occasion, they've made that little gem almost completely irrelevant. People who can buy the stock up will continue to put pressure on prices, despite there being a limited supply, it might bubble along for a year in my view with supply and demand peaks and troughs but, this cocktail of horrors is going to drive prices very low in my view. What annoys me most, is that there is very little consultation before they run with these schemes, or at least there appears to be very little analysis, and the tinkering rarely ever works, whenever the government introduce or remove a scheme, everything goes tits up for 10 years. eg 1987 Lawson, double tax relief/Miras, lowering interest rates, ERM madness, black Wednesday Lamont 1990, Dividends and Pensions Brown 1997, Help to buy Coalition 2013 (too little too late too stupid). Many other examples of ridiculous economics in the last 20 years... but the undoing of the latest regulatory change will be very difficult in my view.
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Not related, but GR8IT has a good analytical brain. The reason why the predictions, which are mathematical certainties, have gone on and on is that back in the day, no-one would have predicted IRs of 0.5%, and huge borrowing and QE to support these. Low IRs, incidentally, are damaging the economy and should never have happened. House prices particularly rely on IRs and IRs will remain low as long as we can borrow 100 bn a year and probably print more money. It is an unsustainable Ponzi system, and the question is, how much longer can we, the EU and the USA keep messing with the laws of economics. I think it is immoral that house prices have been manipulated to be totally disconnected to building costs, all encouraged by Cameron and his crew.
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GR8IT Are you, by any chance related to NickPike ? He has been making the same forecast as yourself, on Lovemoney since 2009.
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28 November 2014