EAT would like you to know that you are playing a major part in Bank of England policy.
How so?
Apparently, the Bank of England is using Google seach data to research and forecast the housing market.
In particular, it is looking at searches for ‘estate agent’, having found a correlation between the number of searches for ‘estate agent’, the number of transactions and the direction of house prices.
Indeed, the BoE reckons to be able to plot the housing market more accurately using Google searches for ‘estate agent’ than two of the house price surveys – mind you, one of them is the RICS’s baffling monthly report, but it’s good to know that even BoE economists are also at sea when it comes to net balances.
Furthermore, Google searches for ‘estate agent’ are likely to become more important.
“Internet search data have the potential to be useful for economic policy making,” wrote Nick McLaren and Rachana Shanbhogue in an article for the Bank’s latest Quarterly Bulletin.
“As further developments are made in this area, and the back-run of the data increases, these data are likely to become an increasingly useful source of information about economic behaviour.”
We hope the Bank is along the right lines.
After all, the property portals are recording record traffic, yet transactions are still stubbornly bumping along the floor, which seems to prove that lots of people searching for ‘estate agent’ haven’t the slightest intention of making any kind of a move.
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Comments
Okay,
I sort of like this – in my business I know that when applicant levels (new ones) kick over a certain level in a month funnily enough about 4 months later my exchanges increase………….bit obvious but I like it.
On the other hand there is one thing having a one off provincial estate agent like me forecasting cash flow on sales just so he can get a handle on the staff commission and the flippin BOE making proper decisions on stuff like this.
Next they will be taking into account what 260 odd old surveyor duffers that make up a fraction of the EA market with patches on their tweed jacket elbows and funny little stains on their trousers think is going on
Now that would be silly wouldn’t it?
Jonnie
"which seems to prove that lots of people searching for ‘estate agent’ haven’t the slightest intention of making any kind of a move."
Rubbish, clearly the author of this article hasn't looked at the statistics before producing this ill informed conclusion.
Take a look at the graph plotting the data on Google Trends
http://www.google.co.uk/trends?q=estate+agent
and compare it to your performance over the last 8 years, I suggest that the data will uncannily track most agents' sales figures - you can also see the seasonal variations. You will also see that number of searches over the last couple of years is only a fifth of what it was in 2005/6
Interestingly though the term Rightmove shows the opposite trend:
http://www.google.co.uk/trends?q=rightmove&ctab=0&geo=all&date=all&sort=0
Dan - I thought that's what you were referring to, but wanted to clarify rather than correct the point. There was a thread here recently where inflation in the general sense was mentioned as a way out of the debt problem. It is of course not that simple!
People may think their house is worth more than the peak (Rightmove's latest Asking Price index is out on Monday, so we'll find out more). The only way they'll discover the true worth is if they try to sell it. But with transactions outside of London far and few between, there's little to stop them dreaming.
Point of the thread is using google to predict interest in a property market and compare that the number of sales etc.....
I dont think simply using the search term Estate Agents is enough.....
Buying a house, selling a house perhaps but how many sales companies type in "estate agents" in google to find their list of cold calls for the day to sell advertising to, I get calls every day from Yell, 118 etc.
Most people using the internet with not an ounce of knowledge of where to start might do this, but I am sure most buyers or sellers have heard of rightmove, zoopla, primelocation etc! and have knowledge of where to find the local agent anyway.....it is a bit like the CTR with rightmove, forget 95% of "estate agents" google searches and the number left is a little more accurate.
@rantnrave "The only inflation that is going to erode people's personal debt (incl mortgages) is wage inflation."
You are of course entirely correct. I should have said that the BoEs policy to to cause high inflation to help erode the (governments) debts.
The little guy is going to get screwed. But at least his house is 'worth' more than it was at the peak.................
Laughable - think about how you operate your business and the stats you use.
Now think of the amount of metrics available to the government. I'm pretty sure give or take a few weeks they could predict the average riot about to occur in the fast east let alone the situation in relation to UK's housing market.
To be honest I'm a tad bored at sterling being so low that our country looks like some massive investement potential to foreign buyers, that has artifiically or should I say deliberately kept prices too high and out of sync with ave earnings therefore not allowing your averarge FTB a foot on the ladder, builders to sell in volume with better LTV's. The sooner we all wake up to what has been happening under the Blair/Bush regime the better.
The only inflation that is going to erode people's personal debt (incl mortgages) is wage inflation. At the moment there is very little sign of that. Price inflation without a corresponding increase in wages actually makes it harder, not easier, to pay off debts.
Not that any of this will affect the BoE group who vote on interest rates, because their pensions are all inflation-linked anyway.
What? If there's more activity in the market, prices go upwards?
Why didn't I think of that?
I’m sorry, but no way.
The BoE would love you to believe that they are probing deeply into every facet of our economy before deciding the price of money, in much the same way the old soviet food boards in the USSR claimed to monitor the people’s needs and farmers production before centrally planning the price of bread or potatoes.
The truth is the only thing they care about is maintain a bloated overspending state ticking over and keeping inflation high to erode the debt. Interest rates will be kept on the floor until the bond markets refuse to buy the government debt and they need to up rates to entice them back.