This morning’s headlines about the housing market reach new heights in making assumptions. The Times this morning leads with a ‘House market stalls as economy falters’ which rightly won plaudits for its sub-editors last night as the paper went to press, but is at best misleading.

Of course a headline that says ‘Glut of houses for sale coincides with possible economic downturn following yet-to-come government cost cutting’ isn’t likely to shift newspapers off the shelves, but at least it’s more accurate.

So let’s separate the facts from the hyperbole. House prices are falling or at least stagnating in many parts of the UK but this is not because the economy is ‘sagging’ but instead, many of the writers have omitted to point out until their later paragraphs, because there has been a huge surge in the number of properties for sale.

On FindaProperty.com this supply into the market has risen by 31% over the past 12 months and by 9% alone in June – so there is no argument that, after a period of price rises many sellers have decided to put their homes on the market and see what happens.

The unfortunate and unintended outcome of this is to force prices down. The constant number of buyers house hunting at the moment means they have more properties to choose from and when that happens, their bargaining power increases and prices drop. But it doesn’t mean the economy – or the property market – is nose diving, as The Times, Daily Telegraph and Daily Mail have all suggest.

The greatest mistake many commentators make when examining house prices is that they are somehow like the retail prices. They think that if prices drop it must be because demand is dropping and this means we’re all going to hell in a handcart. Insteasd, unlike the latest Jimmy Choo’s or iPhone, property is all about supply and price and not so much about demand – although it is still important.

The figures that sparked this morning’s frenzied reporting – almost every newspapers has lead with the story – has been based on figures from the Royal Institute of Chartered Surveyors. It is a ‘sentiment’ report as Radio 4’s Today programme pointed out this morning, not a facts or research-based effort. It reflects which way surveyors feel or think house prices are going at the moment.

The other point is that although the property market may be wobbling this month, it is a very regional, not national picture. The Findaproperty.com sales index clearly reflects what the Nationwide and RICS figures also show – that in London, SW and the NW surveyors are feeling a bit downbeat about the market while in the NE, Yorkshire and Humber, Wales and the Midlands there’s a bit of a pall.

But most importantly (and missed out in all the newspaper reports) the same surveyors say things will look up over the next three months – which probably reveals the real story here; everyone is on holiday and buyers are thin on the ground at the moment, while properties for sale are rising.

Source: House price headlines: hyperbole or fact? http://blog.findaproperty.com/general/house-price-headlines-hyperbole-fact/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+WingingItPropertyBlog+%28Winging+It+Property+Blog%29#ixzz0wC3JH5i5
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