Home sellers fear lower prices

Mallotum_X

Reduced supply *can* relate to increased prices, but its not a guarantee is it? There are so many other factors, for example are you sure that the mix of properties remained the same, rather than only better property selling? Regardless, what happened last time, the reports showed some improvement in prices so everyone who had been putting off selling then instructed agents and reported prices fell again due to over supply.

Personally, with the dificulties in raising deposits, mortgages job insecuritites etc etc I doubt we would see much of a recovery this time, although its possible to get a blip again perhaps. I'm much more of the opinion that we will continue to see a gentle decline in prices.

Really2

Mallotum_X wrote: »

Reduced supply *can* relate to increased prices, but its not a guarantee is it?

I never said it was a guarantee, here is the 2009 thread on some of the points raised here.

It is after 5 months of rises, and has quotes on supply data etc in it.
https://forums.moneysavingexpert.com/discussion/comment/25230875#Comment_25230875

I am just saying if the same thing happens where people remove homes from sale due to not achiving the price they want there is a real risk of history repeating itself. ( a cycle I thought would happen until we are back in to real growth)
Please not I know it depends on other factors, that is why I said yesterday it seems like what happens to Europe will be the decider of direction.

Graham_Devon

Really2 wrote: »

Do you deny what happend in 2009?

No.

But a hell of a lot more happened than just sellers pulling their homes off the market.

QE. Banks were nationalised by that point. Interest rates were pulled down to the lowest on record by that point. SMI had increased and the time reduced to 13 weeks (from 39) before you could claim by that point. Banks had been given instruction to do all they could before reposessing by that point.

It's NOT just less sellers = rising prices, as you wish to suggest.

I don't need the long argument about it. It's just ignorance on your part not taking into account everything else that happened.

Really2

Graham_Devon wrote: »

No.

But a hell of a lot more happened than just sellers pulling their homes off the market.

QE. Banks were nationalised by that point. Interest rates were pulled down to the lowest on record by that point. SMI had increased and the time reduced to 13 weeks (from 39) before you could claim by that point. Banks had been given instruction to do all they could before reposessing by that point.

It's NOT just less sellers = rising prices, as you wish to suggest.

I don't need the long argument about it. It's just ignorance on your part not taking into account everything else that happened.

How much of the above is different now then?

I never said less sellers = rising prices.

It will be IF we reach the point like in 2009 when supply falls bellow demand.
Read the old thread above.

I am not saying prices will for sure rise, but I am saying if your thread is correct it sounds very 2008/2009. That means a lot of the houses on the market are again aspirational prices, and as prices fall they pull them as they have a set value they think their house is worth.
They get bored, see falls and pull them off the market again. If prices rise again they flood the market again and cause falls.
There does seem to be a cycle to this that some want to sell, but not at any price. If they can't get what they want they will stay put.

Mallotum_X

Thats the trouble with economics, everything else has to be the same, and it is highly unlikely to be. Chances are something else will happen that mucks it all up. We may have a repeat of some of the factors that caused the blip last time, but then something else will be different. We could just as easily have some other impact that causes a quicker fall in prices.

I think this time round the economy is in a worse state than last time, with the government/BoE in less position to influence the market. For example, will the banks/gov try and keep people in their homes this time or could we see an increase in repos?

Theres bound to be something that creates a shock to the system, its just we dont know what it will be yet.

Really2

Mallotum_X wrote: »

Thats the trouble with economics, everything else has to be the same, and it is highly unlikely to be.

No it does not, it is simply better for people to be aware of similar situations and their outcomes.

We never had to have the same economies as the 70's or 80's to have a recession.

We have not got the same economy as the 1920's, but the situation is similar.

As I said, if it does happen, they are likely to food the market again and the same thing happening until they have all evaporated for what ever reason.

But ignoring effects of past event's esspecially ones that have happened so recently in the same conditions would be odd should they continue.

Mallotum_X wrote: »

I think this time round the economy is in a worse state than last time, with the government/BoE in less position to influence the market. For example, will the banks/gov try and keep people in their homes this time or could we see an increase in repos?

Really? in 2008/2009 it was people looking at us to default, the actions we have taken seem to have improved our position in a global sense compared to 2008.
I think many predict if we go in recession it will be a slight drop in to negative, similar to the kind of growth rates we see. Virtually stagnant.

the_flying_pig

Really2 wrote: »

Do you deny what happend in 2009?

How can falling stock be good for buyers?

People who want falls would want increased instructions as it would drive down prices...

I don’t really see where you’re coming from but strongly suspect that it’s nonsensical.

The very first thing a 14 year old GCSE economics student is taught is that demand almost always tends to fall the higher prices are – you know, the whole downward-sloping demand curve thing.

The very next thing that he is taught is that supply tends to increase the higher prices are – almost all supply curves slope downwards. This, of course, does very emphatically not mean that the price of goods can’t fall when demand is falling.

Really2

the_flying_pig wrote: »

I don’t really see where you’re coming from but strongly suspect that it’s nonsensical.

The very first thing a 14 year old GCSE economics student is taught is that demand almost always tends to fall the higher prices are – you know, the whole downward-sloping demand curve thing.

The very next thing that he is taught is that supply tends to increase the higher prices are – almost all supply curves slope downwards. This, of course, does very emphatically not mean that the price of goods can’t fall when demand is falling.

Yes I made 2009 up?

So if prices fall, demand increases? if price fall supply decreases according to your example?

So if you start to remove stock faster than demand increasing tell me what starts to happen?
and when demand outstrips supply what happens?

So for your failed GCSE economics (or you may be under 14?)
If you want price to fall quickly.
A) In a falling market, increasing stock levels would increase falls as supply would saturate demand.
Thus causing a crash.

That is why if you want prices to fall you would want supply to keep outstriping demand, simple really.

Mallotum_X

Really2 wrote: »

No it does not, it is simply better for people to be aware of similar situations and their outcomes.

We never had to have the same economies as the 70's or 80's to have a recession.

We have not got the same economy as the 1920's, but the situation is similar..

One of the key phases kids are taught when they first start to study economics is "Ceteris paribus" - All things remaining equal. With a given set of circumstances, then if everything else stays the same the results are likely to be the same.

We are not in the same postion that we were in 2008, so a possible dip in supply of property supply does not necessaily mean we will get the same results. You think the economy is better, I think it is worse, but either way its not the same.

To suggest that recessions etc always follow the same pattern doesnt really make a lot sense does it.

If it makes you happy to convince youself prices will be going up soon then fair play. I would suggest that the various other economic factors at the moment would mean something else.

We dont appear to have stongly different views, I think we will have continued gradual falls, with the odd up blip, you seem to be arguing for fairly constant prices, not much in it really.

lostinrates

Really2 wrote: »

Similar thing happened in late 2008/ 2009 (and we all know what happened then). Not good news for those wanting falls if the trend continues.
I think we discussed this 2009 that the pattern of people pulling houses when prices drop and putting them back on when prices increase will most probably go on for the next few years.
Think it was with LiR?

I'm afraid I can't remember the discussion itself....I saw a lot pulled and remarketed.

My parents are an example of people who are hanging on. They hav price reduced (too late and too little IMO) and had two bites they have frighted off this summer (one couple trading down one couple trading up slightly). The most likely buyers, IMO, were the downsizers: and it would have been great for them. Incidentally, I happen to know what their place sold for and was on the market for too...they did ok, they took a knock in price, but would have hefty amount left if paid asking price for my parents' place. Thing is...people like my parents are stubborn and aren't prepared to cut any more, and people like their buyers don't want to get anything other than a bargain in this market.

Personally I don;t see my parents' house going any time soon at anywhere near what its being marketed at.....its in an awkward price for their area too.