• All Analyst Weblogs
• North America
  • Bill Tancer
  • Heather Hopkins
  • Heather Dougherty
• United Kingdom
  • Robin Goad
• Asia Pacific
  • Alan Long
  • Sandra Hanchard
  • Hitwise To Go
• Insider
  • Client
  • Company
  • Industry
  • Product

Hitwise Intelligence - Robin Goad - UK

Analyst Weblog

« Chelsea: flowers or football? | Postcode searches and SEO »

UK house prices: searches and sales

June 02, 2008

Heather Hopkins recently identified a correlation between house searches and house sales in the US. She compared searches for the term "homes for sale" with actual sales data from the American National Association of Realtors, and found that there was a very close correlation (.92). As you could expect, thanks to the sub-prime crisis and the credit crunch, both sets of data are on the decline in the USA.

I decided to carry out a similar exercise using UK data, but rather than looking at house sales volumes I focussed on prices – these days as much of a British preoccupation / obesssion as the weather. The chart below illustrates two sets of data. The pink line, measured on the left axis, is the average UK house price, based on the Nationwide House Price Index. The green line, measured on the right axis, is the volume of UK Internet searches for the term ‘house prices’.

Broadly speaking, the two lines follow similar pattern, although the search data peaks and troughs a lot more than the house price data. It also starts to decline earlier - from February 2007, compared with November 2007 for the actual house prices. Of course, one reason for the lack of a clear correlation might be that British people are just obsessed with house prices full stop. We search for them when they’re increasing, hoping to make a quick buck (or wondering how we can afford to get on the property ladder); but also when they’re declining, panicking about our nest eggs (or trying to determine the right time to buy in a falling market).

With this in mind, I decided to look at the data in a different way. As we’ve learnt from our attempts at predicting reality TV results based on search behaviour, it’s not only the volume of searches that matter. It is also important to understand why people are searching, and one good way of doing this is too look at where they go after executing a search. The chart below illustrates the volume of searches sending traffic to Business and Finance websites – which includes both property and banking sites, and therefore could be considered the optimists’ destination of choice – and News and Media sites, arguably the pessimists’ preferred destination during a crisis.

As you can see from, the amount of people searching for ‘house prices’ and going to Business and Finance sites is on the decline, while the number going to News and Media sites is on the increase. Another victory for the pessimists is illustrated in the chart below. As you can see, UK Internet searches for ‘house price crash’ have more than trebled over the last three years.

This is not our first post looking at the impact of the economic downturn, and I’m sure that it won’t the last. In the meantime, here’s a clip of me talking about some of the other effects on Sky News.

Posted by Robin Goad at 04:00 PM | (4) | (0)
In Categories Economy | Financial Services | News and Media | Property | Search

TrackBack

TrackBack URL:
http://weblogs.hitwise.com/movabletype/mt-tb.cgi/824.

Comments