Jordan prices

These days, it is hard to escape Katie Price aka Jordan. Even the Times cannot keep away from her. Yesterday, it did a feature entitled “Katie Price is right”. Apparently, she is a role model who is “self-supporting, hard-working, uncomplaining, cheerful, courageous, a humble girl made good who sticks by her man”.

Personally, I think it is more than a little sad that the Times consider her as a role model for women today. She is someone who got her start in life by taking her clothes off. However, that rant is best preserved for another time. This is a housing bubble blog, after all.

I did, however, learn two interesting things from the Times article. First, her recent book outsold all the authors on last year’s Booker prize short list, which is a shocking indictment of the UK’s reading habits. On the strength of that statistic, I have decided to bin my novel about an angst-ridden renter in North London. Instead, I will focus on a new project - my autobiography - which will come with lots of pink framed photos of me with the six-pack Adonis that lives with me.

Second, Katie has just downsized and she intends to sell her implants for £1 million on ebay. When confronted by this seemingly preposterous sale she said, “Someone will buy them, there’s always someone.”

Some of this Jordan “it will sell” attitude has also gripped the housing market. Earlier this week, rightmove.co.uk announced that asking prices are on the rise. In February, house prices surged 3.2 percent, bringing a “huge relief to homeowners who have been concerned about falling prices in a faltering property market.” Sellers have taken comfort from the Bank of England’s recent easing of interest rates. Sellers are hoping that yet another round of easy credit will fire off one more surge in house prices.

The optimism underlying this rise in asking prices is extraordinary. House sellers have faded out the cacophony of recent bad news, which if sellers had any sense, would have prompted them to slash their prices and run for the hills.

For reasons that I can not understand, sellers are unimpressed with the recent data from Halifax, which indicates that prices have been falling since July last year. Likewise, collapse of Mortgage approvals has left them unmoved. The buy-to-let investors must be looking elsewhere for financing after Paragon has shut up shop. They seem unfazed by Bradford and Bingley’s year-end results with its deeply depressing account of higher loss provisioning; financing difficulties; and reduced interest margins. They have ignored the gloom-laden warnings from Bank of England Governor – Mervyn King –of a slowing economy, rising inflation and real declines in living standards. As for Northern Rock, that was last year’s problem.

Sadly, for sellers, asking prices are not sales prices. Sellers may ask, but they will not receive. Already, there are clear signs of accumulating housing inventory.

Rightmove did not trumpet the inventory data with the same zeal that they did with asking prices. Nevertheless, it did report that estate agents now have the highest ever level of unsold homes recorded for this time of year. It also reported that homes are also taking an average of 93 days to sell, up from 78 days just 12 months previously.

Sellers may find that their “someone will buy them, there’s always someone” optimism is misplaced and that Jordan prices do not clear the market.