England's Home Prices

I have talked a couple of times about home prices in England. On a valuation basis, real estate became more overvalued than the U.S. I don't remember the exact number but I think Grantham estimated the U.S. real estate market was a 3 standard deviation event and England was a 5 standard deviation event (may have been 4). Anyway, England home prices have supposedly not declined nearly as much and recently shown some form of stickiness. Unlike the U.S. however there is really no one standard for home prices measurement (this is my understanding, if I am wrong please let me know). In the U.S. you have several measurements of housing prices also but the Case Schiller Price Home Price Index is sort of the standard that everyone goes by. In England, there are three or four and all are reported. Well today Rightmove reported big home price drops in England. There are alot of interesting things in the Independent article:

A 2.2% drop in a month?

The average asking price fell by 2.2 per cent, equivalent to £5,102, between 12 July and 8 August despite a scarcity of stock coming on to the market, the property website Rightmove said.

This is what I am talking about with different data releases:

The latest survey carried out for the Halifax found that house prices were now rising and that the cost of the average home had gone up by 1.1 per cent in July, to £159,623.

Rightmove has not been one of the aggressive data centers on home price drops. They have just been playing catch up:

Asking prices fell by 1.9 per cent and 0.4 per cent in January and June, respectively, which were the only other monthly falls this year, according to Rightmove.

In the whole article this is what I found most amazing:

In another positive sign for the market, Rightmove said 75 per cent of home owners did not expect prices to fall in the next year.

That seems very bullish to me on housing in England. This mindset may have helped prices in England but overvalued is overvalued and reality may be slower than the United States but I would not surprised if this isn't overly optimistic. Of course that has huge impact on the banking soundness of England's banks which is why I continue to watch it very closely.