Housing market slowdowns share certain common features, but the downturn of 2008 is producing some new phenomena. To date, the most marked of these is bizarre fury generated in some quarters at statistics showing that prices are stagnating rather than slumping.
This week Halifax reported that prices were unchanged in January; these statistics followed Nationwide data which revealed a decline of 0.1 per cent.
Both surveys provoked vitriol from the vocal minority that has been wrongly forecasting a crash for the past few years and now denounces any research that might thwart their hope that their dream is about to come true.
This pro-crash lobby accuses the economists at Nationwide and Halifax of publishing figures that give a falsely optimistic view. Journalists who report these numbers are deemed to be either mouthpieces for lenders or determined to support the value of their own property investments. The motives of this online fraternity that longs for the human misery produced by a market collapse are a mystery. Perhaps they hope that if they spread sufficient gloom, their rantings will become a self-fulfilling prophecy?
But some things are certain - one being that their outpourings will continue. There is, for example, very little similarity between the economic conditions today and the sorry situation that precipitated the housing crash of the early Nineties.
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If the economists at mortgage lenders were only cheerleaders driven by the desire to boost the sales of home loans, they would not have voiced their concerns early in 2007 that the sector was set to weaken. These commentators can also claim that their past forecasts have been accurate - unlike those of their online detractors.
Another surprise development of the slowdown of 2008 is the sudden improvement in the image of the buy-to-let investor, previously the villain, blamed from excluding first-time buyers from homeownership. A study from the National Housing and Planning Advice Unit (NHPAU) indicates that first-time buyers have been more disadvantaged by their own lack of purchasing power.
Indeed, the NHPAU, like Capital Economics, points out that buy-to-let has boosted the supply of private rented accommodation (although there is still a shortage, a problem highlighted this week by Shelter, the housing charity).This defence of buy-to-let is bound to spark yet more debate, proving that - in the bad times and the good - very little gets the British more excited than property.
BLOG CABINS
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Rupert Everett, the star of St Trinian’s is selling his condo in Miami Beach for $1.15 million (the building has pet restriction rules). Jennifer Garner, one of the leads in the Oscar-nominated Juno, and Ben Affleck, her husband, an Oscar winner in 1998, are viewing $20 million homes in Los Angeles, including a 15,000 sq ft “sprawler” whose comforts include a mud room (for pets who have got mucky on a walk). These are just two of the latest reports on realestalker.blogspot.com and bergproperties.com/blog, the celebrity blogs currently diverting Americans from their falling housing market.
More displacement activity is on offer at archinect.com, usually a high-minded information space for architects but the source this week of the story that a group of designers of computer generated images of homes have been producing weird pictures based on song lyrics, such as House With No Door. This was a Seventies hit from Van der Graaf Generator, the British prog rock band.
There could be no greater contrast between the glossy snaps of luxury real estate displayed on the homes of the stars’ sites and the reality of vandalised repossessed properties in American cities, sometimes without doors and roofs. But, after all, the business of Hollywood has always been all about escapism.
DREAMS AND REALITY
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City bonus money - which affected the direction of the market in London, the South East and in second-home locations everywhere - continues to have an impact, although the sums “trousered” this year will be lower. In Kensington, the hope that loaded bankers will be shopping for homes in the spring has caused a 10.7 per cent decline in the number of houses now for sale, according to Primelocation.com.
In contrast, owners in Streatham - where a one-bedroom flat can be had for £190,000 - know that their neighbourhood - although up and coming - will not be the first stop on the banker’s itinerary. As a result, they are displaying an admirable realism about the level of prices and the time it will take a property to sell - between six and eight weeks, according to Kinleigh Folkard & Hayward, the estate agents. The Kensington owners’ confidence could well be repaid, but they should be under no illusions that today’s buyers - whatever their resources - will be looking for a good deal.