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Stagnant
When we talk about a market being stagnant we mean one in which there is very little activity and transactions levels are at a low level. Stagnation in the housing market can be caused but a stand off between sellers an buyers. If sellers are not willing to sell their property for less than a certain price and buyers are not willing or unable to pay more than a certain price then we have stagnation.
Stagnation can also be caused by a lack of new blood entering the market in the form of First Time Buyers. FTB's are a vital part of the housing market. Without them the market would just grind to a halt and again we would have stagnation.
The housing market at the time of writing (April 2006) is suffering from record low levels of First Time Buyers in the housing market. This has caused a dampening of transaction levels but the lack of First Time Buyers has been offset by the fact that property investors are still propping up the market by buying large amounts of 1 and 2 bedroom properties with which to rent out to those potential First Time Buyers that are unable to enter the housing market.
Only time will tell what happens regarding First Time Buyers and Buy to let investors. This is one of the factor which makes it interesting for market commentators and anyone keeping a keen eye on the housing market to see which way it is going to go.