Richard Smith – The Finance Zone Independent and Impartial Advice about Financial Matters

In a period where Doom and Gloom are the overriding factor for any good news that may be around.

I have republished the entire overview below, for those of you interested in the Property Market will find it an interesting read.

Rightmove’s market overview

This month sees a return to rising average asking prices, albeit up by a more modest 0.6% compared to the more dramatic price rebounds seen in the earlier months of 2009. This follows on from the previous month’s slight fall of 0.4%, suggesting we will see the housing market remain in a ‘steady state’ during the second half of 2009.

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.

Miles Shipside, commercial director at Rightmove comments: “There is now clear evidence that 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. With growing confidence that we’ve passed the bottom, buyers are more active, although they may discover that many of the best buys have gone.”

Buyer activity remains strong, with traffic on Rightmove’s website remaining much higher than we would expect during the months of June and July which are typically quieter. Last year traffic peaked in March then reduced significantly as summer approached. However, in 2009, the tail-off has been almost nonexistent. This year the number of pages viewed remains at 97% of its spring high, compared to 79% in 2008. Indeed, some agents are reporting some of their best weeks’ sales so far this year.

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. Normally two-thirds of sellers are also buyers, though they have proved reluctant to come to market while their main asset is still falling in value. With initial asking prices up by 6.7% since the beginning of 2009 and better prospects of finding a buyer, the number of new sellers measured is the highest so far this year. This month’s average is 21,364 a week and, while still well below the historic norm of circa 35,000, it represents a 20% increase in sellers coming to market compared to the previous year-to-date average