Why is it that when I looked at the data presented in the press release covering the newly launched Rightmove consumer confidence survey I came to a very different interpretation from that given?
I am not an expert in survey work, but I am always interested in how they are put together, because I have made plenty of cock ups myself with questionnaires. It's rather late when the answers come back and you realise the ambiguity in the original questions.
It is a painful experience, so I have sympathy with the researchers here.
But I feel obliged to be an awkward cuss when I feel people are drawing their interpretations rather liberally from the answers to what appear to be suspect questions. I also feel an obligation to share my misgivings. It's my job.
Now I haven't got the full data and I am sure that I wouldn't be given access to it, but I would be extremely interested to delve more deeply into the responses to and, indeed, the methodology of the Rightmove survey.
The press release provides some background and some indication of how it is put together. The more I look at it the more I shudder.
Here's why.
What am I to answer to the question: "At present, is it a good or bad time to buy a property?"
Straightaway there is ambiguity. "Good" is rather vague in this context. The answers will be conditional and depend on the personal circumstances of the respondent as much as any detached view they may have of the market. How can you interpret them simply?
For instance, if I am trying to sell a home I'll most likely say "good", because I will see my house as a bargain against what it was worth. If I am neutral I will probably say "good", because if you want to buy at the moment it is much cheaper than 18 months ago. If I am looking to buy I may say "good", just because I want to support my own view that it is a good time to buy - cognitive dissonance and all that.
The survey sample consists of 56.2% of people who have already decided to buy properties within the next 12 months, most of which intend to live in them. They have already decided that now is a good to buy, which presumably is a good reason to be on the Rightmove website.
So what are the answers really telling us?
Again, what am I to answer to the question: "At present, is it a good or bad time to sell a property?"
Prices have dropped, money is tight so the answer from most people is unsurprisingly "bad".
But what about the next question. "In 12 month's time, do you expect it to be a better or worse time to sell a property?"
Apparently it will be "better" even though most of the respondents thought that house prices would drop with a sizeable group expecting big drops in prices.
Frankly if I am looking to sell in the next year or so and prices are about to drop, now is a very good time to sell.
And again, the respondents thought on balance that it would be better to buy in 12 month's time than now. So, unless they have to move, now is not a good time to buy, they should wait.
Importantly, as you need both buyers and sellers to make a market, perhaps next year is far better from both parties perspective, as it will be a better time for both, according to the survey.
Now there may be perfectly reasonable answers to each of my concerns, but you get my point I hope.
Given that, the interpretation that Rightmove puts on this survey worries me even more.
Here's one phrase pulled from plenty: "...the majority (65%) acknowledge the window of opportunity for cash-rich and mortgage ready buyers..."
Call me cynical, but does this not sound a little bit like: "Quick, buy now and keep my clients happy so they can keep paying me a subscription." Or is it me that is misinterpreting things.
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