Buyers beware as confident home sellers start to hold out for the asking price

LydiaJ

mewbie wrote: »

It's a reasonable argument. But unlike 2005 the government does not have enough money to rescue the market. We have interest rates at .5%, and a lull before the expected spending cuts and tax increases come into play. I read sensible forecasters predicting 10 years of austerity, which does not sound like boom times to me.

The other day I came across a class of A-level politics students, none of whom had heard of the word "austerity". I wonder how long that will last....?

Max_Headroom_3

mewbie wrote: »

It's a reasonable argument. But unlike 2005 the government does not have enough money to rescue the market. We have interest rates at .5%, and a lull before the expected spending cuts and tax increases come into play. I read sensible forecasters predicting 10 years of austerity, which does not sound like boom times to me.

The government didn't rescue the market with money last time. By 2005 the housing market was running on sentiment alone. The fact that house prices had gone up for so long made many believe that they would continue to do so.

When things started to stall in 2005 the government (or technically the Bank of England) dropped interest rates. Enough people believed that this would "save" house price inflation for it to become a self fulfilling prophesy, enough people piled back in to re-inflate the bubble, and many thought then that the government had some magic control and would never let house prices fall.

Of course what was really inflating house prices was cheap easy finance, and eventually that had to dry up. Which it did. Spectacularly.

But to answer your point, I don't think anyone is predicting "boom times" for a good while yet. I think the real question is, how bad will it continue to get? Are we bottoming out, or going over a hump in the metaphorical roller coaster before the death plunge, or somewhere in between?

And the answer to that is, for all the forecasting, name calling and intellectualising on here, no one actually knows.

So it's an interesting debate, but only time will tell.

Annpan

StevieJ wrote: »

Merryn Somerset Webb is editor-in-chief of Money Week and previously worked as a stockbroker. The views expressed are personal.

Yes. I do have a bit of a problem with Merryn and although she speaks a lot of sense, in her own words, she sold her property at the top of the bubble to a foreigner with more money than sense and is now advising others not to buy until prices fall further. She had no qualms about doing this. She didn't advise the 'foreigner' to wait for price falls that she knew were coming and I feel she has a vested interest in further falls so she can buy at a lower bottom if you see what I mean.

Davesnave

Annpan wrote: »

Yes. I do have a bit of a problem with Merryn and although she speaks a lot of sense, in her own words, she sold her property at the top of the bubble to a foreigner with more money than sense and is now advising others not to buy until prices fall further. She had no qualms about doing this. She didn't advise the 'foreigner' to wait for price falls that she knew were coming and I feel she has a vested interest in further falls so she can buy at a lower bottom if you see what I mean.

I agree that it is right to point out that Merryn has a vested interest. I suspect the OP urging people to 'Get in!' and the estate agents he quotes, also have an agenda.

I don't have any problem with what Merryn did, however, as I don't believe she 'knew' what prices were going do in '07 any more than we 'know' now where they will be by the autumn. She had a pretty shrewd idea, and she was correct.

The other party, foreign or not, had an equal opportunity to do his or her homework. Perhaps a visit to MSE would have been very useful at that time......or maybe not, because then, as now, there was no consensus on this forum!

Long may it continue.

bubblesmoney

Max_Headroom wrote: »

Gosh, fancy estate agents saying that, it must be true then!

probably the EAs must have seen this video below and thought that them shouting together that the house prices were going up would make the market move up by influencing crowd behavior like in the video. http://www.youtube.com/watch?v=GA8z7f7a2Pk&eurl

may be i should consider using this technique before it is time for me to sell my house when that time comes.

StevieJ

Max_Headroom wrote: »

There do seem to be a lot of assumptions that house prices can only ever go in one direction and at one speed.

.

I know a large number on here have thought that they can only ever go down.

neil324

chucky wrote: »

you haven't read the article..
haven't you heard of fixing your mortgage?

mini boom could last 12-18 months then drop off again into recession or another housing correction by the way. that's why they call it W-shaped

don't do recipes but i may put my savings in an Icelandic bank just because Martin said so.

Good idea.At least you'd get your money back.Plus a great rate of interest.

lostinrates

honeypopper wrote: »

People who don't need to sell will hold out until they get the price they want. Or they'll stay put. People seem to forget that only a minority of sellers are in arrears, or in neg E, over 90% of homeowners have at least 75% equity in their homes - or own them outright. They ain't gonna sell cheap!:rotfl:

Presumably a lot of those with 75-100% eqity can sell ''cheap'' and still make a profit though.

inspector_monkfish

honeypopper wrote: »

People who don't need to sell will hold out until they get the price they want. Or they'll stay put. People seem to forget that only a minority of sellers are in arrears, or in neg E, over 90% of homeowners have at least 75% equity in their homes - or own them outright. They ain't gonna sell cheap!:rotfl:

if they don't need to sell, chances are the in the current climate, they won't even put it on the market in the first place

a few years ago, when prices were rocketing, people were putting houses on the market, just to chance their luck and see what they could get...

hence there not being so many properties for sale, let alone actually selling

bo_drinker

Another thing is that it actually costs beforehand to put a house on the market now so they have to be serious about doing so rather than just "testing the water". One agent here is pricing realistically and selling many within days. Meanwhile others are not and they have houses with issues and overpriced and sticking. We are desperate to buy but the right one hasn't come up yet.