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curious

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  1. Kenzdawg, now we are talking the talk. I have never used the word "fair" - please do not ascribe it to me. Instead, by "sensible" pricing I mean a price closer to that elusive "fundamental" value as opposed to "bubble" value - both of which are economic concepts. The max price that a person is willing to pay (which will in the end determine the market price) is partly determined by the expectations of what one will be able to sell the property in the future, as well as the transaction cost and "search costs". Future price expectations are particularly important for bubbles being formed. I meant that these people were pricing their property closer to the fundamental value rather than the bubble value. By doing so they affect future price expectations. By selling a property at a price which is closer to the fundamental value, the seller can sell the property quicker - which would be a "sensible" price in a sense of MH. Please do not forget that the modern economic theories take seriously the sentiments that people have, including those involving greed, fairness, etc. These are not childish rubbish anymore. But again I am not talking about "unfair" prices - because, just like you, I have no idea what those are. Perhaps you confuse me with some other poster. Well, again, the modern economic theories allow for a desire not to be greedy to be a part of one's utility. I think this would be called "behavioral economics" as opposed to "neo-classical" economics. *** Adamxxx, indeed you may be right on this one. It depends on the possible aggregate effect of this lower selling price on the entire market, which may potentially far exceed the value of £100k gone to a charity. That is to say, of course, if one thinks that bubbles hurt society. (I actually saw an academic economics paper arguing that bubbles are good. But this is very much aside, I am not going to go into it.) Well, it depends what is included into your utility (i.e. what is the trade-off between monetary and non-monetary components) and whether you are a utility maximizer or you are a utility satisfiser. *** Guys, indeed, as many of you mentioned, these sellers could have had all sorts of non-sentimental reasons to sell their property at a lower price. What I am saying is that by foregoing a possible profit opportunity, these sellers may potentially have some kind of knock-off effect on the rest of the market, which potentially may benefit all future house-buyers. If all sellers were to take off a few tens of thousands from their prices rather than letting their properties to sit on the market for months and years, that would have the price-decreasing effect. Because of these knock-off efects one can see a price-reducing action not only as a "sensible" move, but also as a (possibly unintended) "altruistic" move. I see these sellers as being "nice" to me because they may potentially have an indirect beneficial effect on me, even though I did not directly benefit from this sale. By the way, one of the reasons why we do not see more altruism around us is simply because altruists would be sneered upon and would be seen as stupid rather being rewarded and cheered.
  2. Of course, to want to buy at less than the market value could be "greedy" - as, perhaps, could be in the case of the property in question. But come on, many people on this forum might be guilty of precisesly that. However, by many accounts, properties are still massively overvalued, and are out of reach for many people. I am not talking about this particular property. I am talking about the effect of this sale on the future prices of other properties. Each sale at a price below market value tends to decrease future market value of other properties. This may happen for at least three reasons. 1) Surveyers use past selling prices to evaluate the current price "locally" in the neighbourhood (by the way, this property is in one of the most desirable neighbourhoods in Edinburgh which so far seen mostly stable prices). 2) the neighbours will eventually learn about the selling price of the property and thus will reevaluate their own properties - which then may contribute to their willingness to sell their own properties at a lower price, which is another "local" effect of the house sale. 3) a lower sale price contributes to a "global" lower average price statistics compiled by Registers of Scotland (and this effect is particularly important for properties at the upper end, such as the property in question, because of its large effect on an average price), and this lower price statistics will then appear in newspapers and will have a "global" effect on overall house price expectations. So a sale of one upper-end property at a "sensible" price may lead to an increase in the number of future "sensibly priced" properties in your neighbourhood.
  3. Come on, if I were the lucky buyer, would I be on this forum? No, it is simply that if people behave nicely why not praise them for their nice behavior? The point is that the sellers could have sold the place for more then what they asked. Do I relly need to go in details why they could have sold it at a higher price even in this market? (As it happens I am sufficiently informed about this case - but no I am not an agent and not a relative.) These people were not greedy. Really. Really. Their actions speak for their intentions - a very rare property these days. To tell the truth, I am still perplexed at their behavior. The only theory that I have why they are willing to take a loss of £1.2 million - £775K = £425K (!) is that they perhaps sold their previous property for above a million. So perhaps for them all this house price money is a silly money, and a house price game is a game which they do not want to play. So perhaps they sold their property at about 35% (!) loss simply because the price that they were asking was about the same as the price they are paying for their new property. I just wish that there would be more people around who do not see their house as a source of wealth but rather a source of happiness. Then there would be more "sensible pricing" around. This is why cheers to the rare people who willingly contribute the prices falling to "sensible" levels.
  4. Hi guys, this gem in a nearly perfect condition was originally purchased in Spetember 2007 at £1.2 million. Home report value of £900K, went for £775K fixed price: http://www.ckdgalbraith.co.uk/property/EDI080041/Dick%20Place It was not a distressed sale. They had 4 offers, at least two at that fixed price and they could have gotten a much higher price if they went to a closing date. It is just that the sellers bought a smaller property and just did not want to be greedy. Cheers to the sellers - they seem to be the most incredibly fantastic couple
  5. ccc, I am very impressed with your quote of Sartre. Indeed, a dash of existentialism helps to spice up this forum.
  6. I posted this some time ago, but noone seem to noticed it, so maybe it is worth repeating. This property, Offers Over £1,350,000, is still offered £1 million (!) below home report valuation. I haven't seen the report, but if the home report price tag is 2,350,000, and even if the vendor expects an impossible 30% above offers over (i.e. 1,755,000), then this is a reduction of more than 25%. http://www.ckdgalbraith.co.uk/property/EDI100091/Frogston%20Road%20West A more realistic higher end property, bought in 2007 for about 651K, asking price 590K, just under 10% drop: http://www.struttandparker.com/property-for-sale/edinburgh/property_EDN100300.html However, while I expect significant nominal drops at the very high end (i.e. properties well above 1M like the one fflump mentioned and the first one I mentioned), I expect only very modest nominal drop in the more realistic higher end nice properties (like the 2nd one I mentioned). Though, given the continuing inflation, the inflation-adjusted prices (i.e. real prices) will drop much more. But for those people whose salary will be frozen in nominal terms, many properties will continue to be out of reach even though the inflation-adjusted drops will be significant.
  7. IMHO, fflump is a rare poster on this forum who knows what he is talking about - particularly when it comes down to the stats. I do not see why understanding of statistics and trends makes him a bull. And notice that even if the prices remain flat (or even go up) but inflation picks up dramatically (due to QE etc), he still will be correct with his prediction of a real drop of 20-30%. I am very curious what you, fflump, do for a living. Sounds like you are very much underpaid given that you are astonishingly good at seeing things through - at least again IMHO
  8. This one got back onto the market yesterday: http://www.ckdgalbraith.co.uk/property/EDI100091/Frogston%20Road%20West �1M BELOW HOME REPORT VALUATION! Yummy...
  9. Hi, indeed there was a report by Registers of Scotland reporting a 10.4% price increase in Edinburgh. That report compared the 28-day period from 17/05/09-13/06/2009 to the previous 28-day period 19/04/09-16/05/09. I cannot find this report on their web site, so I attach it: 130609_28day.pdf However the later reports do indicate that that was a statistical bleep. For example, a similar report for the latest 28 day periods (i.e. only two weeks later, for 31/05/09-27/06/09 relatively to 03/05/09-30/05/09) shows only 5.1% increase: http://www.ros.gov.uk/public/news/press_re...flash/28day.pdf Cheers 130609_28day.pdf
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