House prices fall: BBC front page - whats happening?

brit1234

Today I woke up turned on the BBC news 24 and their headline story was House prices falling and a double dip recession. Lots of so called experts trying to spin stuff and even an Estate agent saying prices are going to continue to fall.

Then on the BBC website front page there was this:

• House prices fall, say surveyors
  
  House prices are starting to fall, says the latest survey by the Royal Institution of Chartered Surveyors.http://www.bbc.co.uk/news/

Good news for us bears with this widespread coverage. Hopefully this will stop some ftb making a costly mistake as house prices will continue to fall.

This must be a first as the BBC apart from radio 5 always trys to spin house prices up.

chucky

desperate much?

sss555s

"UK house prices rose by 0.8% in the quarter to June 2010 compared to an increase of 2.8% in the March quarter," the DCLG said.

In the past year, the DCLG figures show that all parts of the UK have seen prices increase, except for Northern Ireland where they have fallen by 8%.

London has seen the biggest increases in that time, with values up by 15%.

Erm, am i missing something? :undecided

michaels

I think you are missing something, price expectations are a key driver of the market, if expectations change then all the 'supply and demand' arguments are put on hold, as recently witnessed, falling prices choke of both demand (why buy now when it will be cheaper in a year) and supply (I know my house is worth £x and if no one is willing to pay that I will hold on to it) andd there is of course a fairly clear correlation between housing market activity and overall economic activity.

Is there enough 'bad news' in the news (yet) to move the public mood from house prices are rising to house prices are falling again?

IveSeenTheLight

sss555s wrote: »

Erm, am i missing something? :undecided

Here's the report
http://www.rics.org/site/download_feed.aspx?fileID=7173&fileExtension=PDF

11% reported price rises
64% report prices stable
25% reported price falls

Interesting note, this survey was compiled with 242 contributers out of 80,000 members (in England alone)
http://www.rics.org/england

Interesting little table showing the areas and percentages of rises and falls within the report

chucky

it's quite ironic that Brit is cheering on this RICS report when the same report indicates that house prices are still rising in his own local area. never mind...

IveSeenTheLight wrote: »

Interesting little table showing the areas and percentages of rises and falls within the report

zappahey

michaels wrote: »

I think you are missing something, price expectations are a key driver of the market, if expectations change then all the 'supply and demand' arguments are put on hold,

I think you are missing something and don't understand supply and demand.

The supply and demand argument cannot be put on hold, there is nothing else.

sss555s

chucky wrote: »

it's quite ironic that Brit is cheering on this RICS report when the same report indicates that house prices are still rising in his own local area. never mind...

Someone got my point :j

michaels

So when prices and volumes fell in 2007-9 here had been a fundamental shift in the number of households? Or could it be that although underlying supply and demand remained unchanged expectations had adjusted and buying, rather than being something to 'do now before it became too expensive' became something to 'put off till prices were lower' and similarly selling became something to avoid as prices were weak.

Yes still 'supply and demand' but not driven by fundamentals (number of houses, population) but by expectations. In the long term the fundementals will dominate, but as Soros would say the market can continue to be irrational much longer than a fundamentals investor can remain solvent...

zappahey wrote: »

I think you are missing something and don't understand supply and demand.

The supply and demand argument cannot be put on hold, there is nothing else.

IveSeenTheLight

michaels wrote: »

Yes still 'supply and demand' but not driven by fundamentals (number of houses, population) but by expectations. In the long term the fundementals will dominate, but as Soros would say the market can continue to be irrational much longer than a fundamentals investor can remain solvent...

Expectations still contribute to the supply and demand

Demand is the desire and ability to buy.
If the desire has lowered because the expectations are for further falls, then the demand lowers.

Supply is those properties available for sale.
If the expectations are that the achievable price is too low and they wish to wait until prices are higher then the supply lowers

In both cases, expectations feed into the supply and demand basis

Graham_Devon

yer but no but yer but no but....