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Economy in Brief

RICS Survey Takes an Ongoing Dive
by Robert Brusca January 16, 2008

The UK economy continues to be a bit enigmatic. Unemployment is still declining. Economic activity seems to blow and cold. The financial chaos is threatening to take Northern Rock into the public domain. The economy is clearly battered but at the same it shows some resilience and that goes for some of its inflation measures as well…but not so those for house prices. The RICS survey on housing prices finds that the breadth of price declines is increasing. The current reading on prices, price expectations and sales expectations are all on lifetime lows for those series, respectively. New sales are weak but comparatively seem full of life in the bottom 23 percent of their range (ranges since 1999). Both Price and price expectations are on extreme down legs of their respective cycles. And even with the new lifetime lows neither shows any sign of slowing down it pace of descent.

RICS: House prices and expectations for prices and sales
  Dec-07 Nov-07 Oct-07 3-Mo Avg 6-Mo Avg 12-Mo Avg Range
Prices -49 -41 -24 -38 -20 2 0.0%
Price Expectations -62 -48 -36 -49 -32 -10 0.0%
Sales expectations -19 -8 -6 -11 -9 3 0.0%
New Sales -21 -35 -32 -29 -26 -13 23.0%
Range percentile takes range back to 1999
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