● Selling times shortest since 2008
● Prices rise, but remain lower than a year ago
● Number of homes for sale down by 23%
House prices in Glasgow and the west of Scotland rose by £2,000 in the last three months of 2013, but it was not enough to offset earlier price falls in 2013 and average selling prices remain just over 2% lower than they were a year ago (see graph). Selling times, however, shortened significantly and are now back to levels last seen in mid-2008. The average number of days to sell fell by 30%, down from 131 days at the start of 2013 to 91 days today.
There are now some tentative signs that prices have at least stabilised. It is rare, for example, to see prices rising in the last three months of the year. In five out of the last six years, prices have fallen between the third and fourth quarters of the year. Moreover, the stock of properties for sale fell by 23% during 2013 as demand outstripped supply.
There is no strong indicator yet, however, of a sustained recovery in prices which have seen little movement over the last two years. At the start of 2012 GSPC recorded an average selling price of £121,000. Today, the equivalent figure is £119,000.
Nevertheless, if the fall in selling times and stock levels continue, prices could reach a firmer footing. As Professor Gwilym Pryce of Glasgow University, who analysed the sales data from GSPC, comments: “The clearest portent of recovery is the notable fall in selling times indicating that any slack in supply is gradually being used up. It is the first time since 2008 that we have witnessed average time on the market remaining below 93 days for three consecutive quarters. If selling times continue to fall, we would expect at some point that prices will rise as demand begins to bite and the market finds a new equilibrium”.
From my point of view , despite almost universal talk of a house price bubble, prices in the west of Scotland have remained largely unchanged for the last two years. The slight increase in prices this winter was welcome in as far as it suggests that prices may be stablising, but prices remain below where they were this time last year and there is no clear evidence of a strong recovery in prices yet.
Nevertheless, the shortening in selling times and the decline of stock levels are both important indicators of recovery in the market. We would expect to see further improvement in selling times this year as buyer confidence in the property market grows and mortgage lending improves further. The improvement in market conditions should also tempt growing numbers of aspiring movers to put their current property on the market and so provide a new injection of homes for sale.
The recovery will, however, be patchy. Some areas are already experiencing the return of closing dates while others remain in the doldrums. Some types of properties, especially affordable three bedroom family homes, are selling faster and more easily than others – notably larger four or five bedroom homes.