How long can FTB-s afford to wait?

Jimmy_31

julieq wrote: »

This is a joke right?

There's a good (non partisan) discussion of how supply and demand relates to the UK housing market here:

http://www.economicsonline.co.uk/Competitive_markets/The_housing_market.html

You're right that single transactions could theoretically be at arbitrary levels, but that's true for all transactions, not just housing. There's nothing stopping someone paying £200 for a £20 toy on Ebay for example. But that doesn't mean supply and demand rules don't apply. Aberrant transactions get averaged out.

I suspect that the recent desire - not the first time this subject has come up recently - to remove the idea of supply and demand and create a "new paradigm" is because the inexorability of the uk housing demand/supply imbalance is becoming difficult to ignore, even for the most dyed in the wool bears. So to get further corrections at a time when lending is increasing and FTBs are building deposits against a basically improving economic situation, you have to declare supply and demand no longer applies. Anyone can see that the factor constraining demand - the inability to get finance - is slackening rapidly.

Brave attempt, but as Hamish says there is nothing else.

Except the price of the house of course.

julieq

The asking price of a house is a guide only.

Think of it like an auction. Usually at an auction there's a guide price. If there are two or more people competing for something, typically one starts low and gradually the others bid the price up until it's beyond what they're willing to pay. That can be below the guide price or above it, you often see paintings massively exceeding estimates. But usually the auctioneer gets it more or less right because he or she is considering previous competitions for similar items.

Asking prices for houses are no different. Estate agents will try to persuade a seller to have a highish asking price, but it will be range based with some reference to previous sales. People will either choose to pay it (and maybe compete) or make an offer lower than the asking price. In either case the final selling price is derived from supply (are there alternative similar options, including rental) and demand (how many people are willing to compete). But the asking price is essentially academic except insofar as it sets expectations for both seller and buyer.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Why?

There has never been a time when everyone could afford a house.

The answer is simple.

We could end up with just 100,000 people able to buy houses, and the affordability you prefer to use, would still show houses are affordable....because those 100,000 multimillionares are able to afford them comfortably at 4x income.

Your version ignores everyone in the country who cannot afford to buy. You then go round stating that housing is affordable.

Affordable to those who can afford it. It's a pointless way of looking at it. It tells you the absolute obvious.

Jimmy_31

julieq wrote: »

The asking price of a house is a guide only.

Think of it like an auction. Usually at an auction there's a guide price. If there are two or more people competing for something, typically one starts low and gradually the others bid the price up until it's beyond what they're willing to pay. That can be below the guide price or above it, you often see paintings massively exceeding estimates. But usually the auctioneer gets it more or less right because he or she is considering previous competitions for similar items.

Asking prices for houses are no different. Estate agents will try to persuade a seller to have a highish asking price, but it will be range based with some reference to previous sales. People will either choose to pay it (and maybe compete) or make an offer lower than the asking price. In either case the final selling price is derived from supply (are there alternative similar options, including rental) and demand (how many people are willing to compete). But the asking price is essentially academic except insofar as it sets expectations for both seller and buyer.

Luckily i have plenty of options (houses )that i can make an offer on and very few competitors to enable there to be a demand for the house.

So basically what you are saying is buying a house is just like buying a dvd from EBAY, see hamish its not as complicated as you make out, unless i get one of them tricky sellers that you mentioned, suppose i could always just use the BUY IT NOW option if i come across one of those sellers

HAMISH_MCTAVISH

Graham_Devon wrote: »

Your version ignores everyone in the country who cannot afford to buy. You then go round stating that housing is affordable.

Affordable to those who can afford it. It's a pointless way of looking at it. It tells you the absolute obvious.

So then you agree that housing is actually pretty affordable for those who have bought houses.....

What percentage of society do you believe should be able to afford a house?

julieq

Oddly enough that's exactly what it's like Jimmy.

But it is possible to track prices all CDs go for on Ebay, which gives you an idea of the likely selling price - these are Hamish's statistics, and generally you'll make a better decision if you know these.

You may get a bargain (buy it now set at the wrong price). You may overpay because you buy the first one you find and don't look for another copy. But supply and demand still applies overall. There are plenty of 1 cent CDs on ebay, but they all tend to go for roughly the same price because there's plenty of demand for those CDs.

Graham_Devon

HAMISH_MCTAVISH wrote: »

So then you agree that housing is actually pretty affordable for those who have bought houses.....

What percentage of society do you believe should be able to afford a house?

Oh god damn Hamish.

Good night.

julieq

And Graham flounces off again....

System

It was actually a perfectly valid question as well.

julieq

Can first time buyers not buy houses in the winter when according to Hamish they are much cheaper? FACT.