London Home Prices Finally Start to Slow
I saw this headline go across my screen on Bloomberg and my first reaction was to assume that prices were actually going down.
The next line read: “Annual rise in June down to 19.3% from record 20.1%.”
Ok so prices went up “only” 19.3% and that’s a slowdown. I am not sure that is very comforting to those struggling to buy.
The next article on Bloomberg was: “Monaco Luxury Housing Boom may see $400 Million Penthouse”.
As I was reading these articles I heard a Bloomberg commentator talk of the “artificial increase in home prices in the last 24 months because of institutional buying.” He was referring to the US, of course, where prices remain 10-15% below their peak levels.
Meanwhile, the US stock market once again hit a new high this week. The US economic recovery finally appears to be gaining some traction and consumer confidence has increased for four months in a row. Mortgage rates, against most predictions, have dropped all year and are back to around 4%.
Housing prices – in general – went up too far too quickly, and not surprisingly then went down sharply. The institutional buyers referred to above took advantage of a heavily oversold situation to snap up cheap properties. We now appear to be at or close to a more normal housing market. No boom, no bust. Buyers have more choices, and there are more buyers becoming more confident about their futures. That signals to me a healthy market.
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
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