Seven weeks ago the headlines started to sound ominous warning bells – Meltdown on Wall St – shades of October 1987. What followed was an alarming tsunami of economic news which has undeniably impacted consumer confidence and shaken financial institutions. It is no surprise to learn then that interest in searching for property has equally been significantly impacted by these intervening weeks of somber news.
Earlier this year in a post entitled “Media seriously impacts the psyche of NZ’ers when it comes to property” the correlation was shown between the media headlines and visitor traffic to real estate websites. Well with the benefit of 7 weeks of tracking analysis the same metrics can highlight in the graph below the direct correlation of consumer confidence and incidence of property website viewings during the recent exceptional period.
As can be seen when viewing the tracking of website visitors to this “basket” of 7 real estate websites for the year to date of 2008 in red – a promising early start to the year was shattered as interest rates spiked and property sales ground to a halt with speculation of a major crash in the market.
From a healthy peak in the early months of the year far above 2007 levels, the traffic volume slipped to below 2007 levels by April and so began a 4 month period of flat visitor traffic at 2007 levels – until in mid August the first signs of spring started to appear and traffic started to build and broke free of the doldrums of 2007 levels. But then as sure as late spring frosts appear to wipe out early blossom so the credit crisis froze out consumer confidence and the level of traffic slipped back and for the past 5 weeks has been showing all the classic signs of “flat-lining”.
Not only is general property searching impacted by the credit crisis but very active searching for mortgagee property has also suffered the same degree of nervous apprehension by would-be-purchasers. The graph below tracks number of searches (blue bars) made per month on realestate.co.nz for the word mortgagee since the start of 2007 matched to the quality of listings (red line) on the site identified as mortgagee.
The peak of searching in April was influenced by some significant media coverage of the subject area and the reference to the website, however since then whilst inventory has grown the level of searching has come back somewhat and has shown in a “perfectly paralleled” visual to the graph of web traffic the same eerie “flat-lining”.
These graphs analysing website activity on the most comprehensive real estate website provide a valuable insight into the lead-indicators of the market for property. The data expected within the next week from the Real Estate Institute (REINZ) will report the sales for the month of October which could show some potential impact of this credit crisis; however given the lead time of purchase intent to unconditional sale the full impact may not be seen until the November or December figures. I wait with interest to see these latest figures.