Clock Watching The Property Market
Date of Article
Feb 10 2009

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Property experts are turning to clock watching when it comes to understanding and explaining the vagaries of this year’s complicated housing market scenario.


Given the rapid pace of change in the current economic climate, even the most experienced property experts would be unwise to call the bottom of the market but, experts at Carter Jonas believe thinking about the property market in terms of the motions of a clock might give a good indication to buyers and sellers, alike.

This clock-based interpretation of the housing market assumes that the property cycle turns direction at 12 o’clock and 6 o’clock, with 12 o’clock always being the peak of the market.

While points on this notional clock are fixed, the length of the time segments it takes to move between the notional hours is not necessarily regular.

According to Carter Jonas, the bravest of buyers do so at 5 o’clock but the more canny purchasers buy before 6 o’clock because, although that is at the point at which prices are at their lowest, there is less choice of stock available to buy as vendors have usually pulled their homes from the market by then. 

Similarly, shrewd buyers know to sell at around about 11 o’clock at a time when, although the market is saturated with properties for sale, it is also crowded with a bulk of eager buyers and prices are still high enough.  As time edges closer to 12 o’clock again, it proves a bit more risky as nobody ever really knows exactly when the clock will strike twelve and prices will tumble.

Carter Jonas acknowledges that although the clock is a useful indicator there are other factors contributing to the confusion of telling the time in 2009.

While, historically, interest rates have been used as the key to locking or unlocking the housing market, they are not performing this function currently.

The lack of mortgage finance is also mixing the picture. However, the latest British Bankers’ Association figures for last month (December, published 26 January) give an indication of a positive shift with mortgage lending rising by £2.9 billion and even the Housing Minister has asserted anecdotal evidence of a ‘bit of an upturn’.

Reports of an unexpected quickening of the second-hand market in the USA last month (December), when sales in this sector increased 6.5 per cent, indicate that the Stateside property-clock might be reading 5 o’clock and this is bringing out the bravest of bargain hunters or it could be attributed to an ‘Obama-bounce’, says Carter Jonas.

While, historically, in these matters the UK lags behind the USA by twelve months, the December figures from over the Atlantic are still part of an annual set which were down 3.5 per cent year-on-year.

Carter Jonas admits that unpicking the property market from the tapestry of financial statistics, economic surveys and expert comment is never straightforward, even for the most expert of commentators.

Stuart Harris, a partner in the Residential Division of Carter Jonas in Cambridge, says:

"When it comes down to it, the right time to buy a home is a judgment that is made by an individual based on personal circumstances and whether the imperative to nest or invest is the most powerful at that point in time."

But he adds a note of caution:

"Our development experts are concerned now that the current and planned undersupply of new housing for future needs – there is a running current of undersupply even when the housing market is at its most buoyant - will cause a bubbling of the market at around about 9 o’clock and the cycle of house price inflation and an exposure of the lack of affordable housing will begin once again."