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DownsizingDiva

Crash Over? Demand Greater Than Supply...

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The price of any commodity is determined by demand and supply. It's the fundamental rule of economics.

If the demand for something is greater than its supply, then the seller has the upper hand.

I fear that is what is happening to the housing market.

Phoned an EA today about a property which came onto Rightmove yesterday. Asked for a viewing. (Property is reasonably priced - not a bargain, but in line with what I would expect to pay for that property, in that road, based on previous LR selling prices for that area in 2006/7 - it's about 12% less than 2006/7 - the area is good, it has a fair amount of land, etc.)

EA said "Ah, yes, we've had a lot of phone calls about that property today - it's created a huge amount of interest" (this was at 10.00am). "I'm afraid you can't view it yet, because the HIP isn't ready. However, I can take your name and add it to the list, so that when the HIP is ready you MAY get a phone call."

This leads me to ask two questions:

1. I thought EA's weren't allowed to market properties until HIPs were available to buyers

2. If reasonably-priced properties are in short supply, then sellers will be able to dictate the price (to a degree).

I've seen a few properties recently which have gone SSTC within 24 hours of appearing on RM. All have been reasonably priced (but not "bargains").

If this continues, then surely prices will rise again?

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House in my street sold very quickly but now it is back for sale. I wonder if there was a problem getting the government (oh sorry I mean banks - but it is the same thing) to lend the money.

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The price of any commodity is determined by demand and supply. It's the fundamental rule of economics.

If the demand for something is greater than its supply, then the seller has the upper hand.

I fear that is what is happening to the housing market.

Phoned an EA today about a property which came onto Rightmove yesterday. Asked for a viewing. (Property is reasonably priced - not a bargain, but in line with what I would expect to pay for that property, in that road, based on previous LR selling prices for that area in 2006/7 - it's about 12% less than 2006/7 - the area is good, it has a fair amount of land, etc.)

EA said "Ah, yes, we've had a lot of phone calls about that property today - it's created a huge amount of interest" (this was at 10.00am). "I'm afraid you can't view it yet, because the HIP isn't ready. However, I can take your name and add it to the list, so that when the HIP is ready you MAY get a phone call."

This leads me to ask two questions:

1. I thought EA's weren't allowed to market properties until HIPs were available to buyers

2. If reasonably-priced properties are in short supply, then sellers will be able to dictate the price (to a degree).

I've seen a few properties recently which have gone SSTC within 24 hours of appearing on RM. All have been reasonably priced (but not "bargains").

If this continues, then surely prices will rise again?

Other half and I went to see a house a couple of months ago. At the time the EA was all "Oh I'm not sure when I can get a viewing for you as so many people want to see it". Had to wait a week and go at 7 pm. Lovely house, overpriced by about 20% in my opinion. Didn't bother making an offer as it was "offers in excess". Guess what, two months down the line still on the market, hasn't gone SSTC hasn't done anything. Guess all the interest didn't help.

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If you are getting divorced - don't sell the house. Live together and try to get on as freinds. Try to ignore the sound of your ex wife being dry-humped by "Dave" from "Images"

When Grandma need to go into a home, Don't sell the house, Peddle your ar5e to rich celebs so you can pay for her care feee's. It's the least you can do after she gave you all those tea & biscuits! Avoid the offer of a dip in the pool though

When the bank want to reposes your house because you cant aford the mortgage, dont let them sell the house, offer them your ar5e, or better still, your ex-wife's ar5e (after Dave has finished with it)

what are the other "D"'s again?

Edited by sbn

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If you are getting divorced - don't sell the house. Live together and try to get on as freinds.

Somehow I dont think this will catch on....... :P:P:lol::lol:

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i think alot of buying is panic buying. Or in other words, not the same sort of buying we had before, the mentality is different. Plus, i think there is government intervention. I think they are giving the nod and wink for people to buy, ie, people within their ranks, middle managers that realise that if they want to keep their job they better support the party and so they buy, at what loss? Not alot really if your an existing fat cat.

Its different type of buying designed to fool the market. After all, its pretty common knowledge that were in a recession and house prices are falling? So its not natural to buy.

plus theres the addage, demand is not just desire, its desire and ability. ie, having th money, and nothing has changed, house prices are not really much cheaper. They are only cheaper to the trained eye. A few thousand? lol, people take those hits all the time.

I am comfident that the shiit will hit the fan during the election.

I think the government will choose it as a time to let go abit and that the powers that support the tories will also be letting go. Point is, the powers that be, which will be tory will want to show that they are helping the economy and so the worse it is before the election the more they can demontrate themselves as improving it. Im not making myself clear, but i think that during the election process there will be an industrial stream of shiit hitting a very large power fan.

oh yeah, last week i posted that my neigbhour was selling their house and detailed the costs and noted that sods law would state that when i said that and lolled they would sell it. THE NEXT DAY THE BOARD WENT DOWN. maybe they are renting it? But today, 3 days later, they have moved out. Removal van outside all day.

Another house sale to boost the economy, possibly. we'll see.

OIne things for sure, they have moved out.

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Ok one more time for the hard of thinking.

There is a difference between demand and desire. Desire for many goods and services including houses is essentially unlimited. Except in periods of real sentiment reversal, which we will not see yet as not enough people have been stung, why would people not want to own bigger or multiple houses?

Effective demand is a function of desire + access to funds. All the people in the world can desire 15 mansions each it does not matter in the slightest (in this example). Only when they have an increased access to money is there real increased demand. (see the last 12 years if you really need a paint by numbers real life example).

As access to funds is being withdrawn across the market by the withdrawl of products, increases in fees and rates and more stringent LTV and credit score requirements I fail to see how demand as increased. What you have is a lot of people shltting themselves because of the bull trap and trying their luck.

But unless they manage to get mortgages...No luck sonny Jim.

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If you are getting divorced - don't sell the house. Live together and try to get on as freinds. Try to ignore the sound of your ex wife being dry-humped by "Dave" from "Images"

lol

yeah, dont sell the house, kill your partner and bury them in the garden, fake their running away to the carribean. dont sell ever and build an extension.

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The price of any commodity is determined by demand and supply. It's the fundamental rule of economics.

If the demand for something is greater than its supply, then the seller has the upper hand.

I fear that is what is happening to the housing market.

Phoned an EA today about a property which came onto Rightmove yesterday. Asked for a viewing. (Property is reasonably priced - not a bargain, but in line with what I would expect to pay for that property, in that road, based on previous LR selling prices for that area in 2006/7 - it's about 12% less than 2006/7 - the area is good, it has a fair amount of land, etc.)

EA said "Ah, yes, we've had a lot of phone calls about that property today - it's created a huge amount of interest" (this was at 10.00am). "I'm afraid you can't view it yet, because the HIP isn't ready. However, I can take your name and add it to the list, so that when the HIP is ready you MAY get a phone call."

This leads me to ask two questions:

1. I thought EA's weren't allowed to market properties until HIPs were available to buyers

2. If reasonably-priced properties are in short supply, then sellers will be able to dictate the price (to a degree).

I've seen a few properties recently which have gone SSTC within 24 hours of appearing on RM. All have been reasonably priced (but not "bargains").

If this continues, then surely prices will rise again?

House prices are nothing to do with supply & demand of houses.

It's supply and demand of credit that dictates the prices.

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lol

yeah, dont sell the house, kill your partner and bury them in the garden, fake their running away to the carribean. dont sell ever and build an extension.

Even better, kill them, stick them in the freezer and then, when the post-judgement day stockpile of baked beans finally runs out, you'll still have a ready supply of protein.

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I think a lot of buying is not buying at all.

its making offers that are accepted.

then the shock of the valuation by the lender, even the turning down of the money because of your late credit payment last Christmas.

lots of red faces in the game at the mo.

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I think a lot of buying is not buying at all.

its making offers that are accepted.

then the shock of the valuation by the lender, even the turning down of the money because of your late credit payment last Christmas.

lots of red faces in the game at the mo.

...there will always be a desire/demand for houses, anyone can make as many offers as they wish on as many houses as they want...a sale will only be made when a buyer is:

Ready, willing and able. ;)

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Ok one more time for the hard of thinking.

There is a difference between demand and desire. Desire for many goods and services including houses is essentially unlimited. Except in periods of real sentiment reversal, which we will not see yet as not enough people have been stung, why would people not want to own bigger or multiple houses?

Effective demand is a function of desire + access to funds. All the people in the world can desire 15 mansions each it does not matter in the slightest (in this example). Only when they have an increased access to money is there real increased demand. (see the last 12 years if you really need a paint by numbers real life example).

As access to funds is being withdrawn across the market by the withdrawl of products, increases in fees and rates and more stringent LTV and credit score requirements I fail to see how demand as increased. What you have is a lot of people shltting themselves because of the bull trap and trying their luck.

But unless they manage to get mortgages...No luck sonny Jim.

I accept that "demand" and "desire" are two different things. However, houses round here are selling and (in the vast majority of cases) not re-appearing a few weeks later as re-available. Therefore, those that are buying must have the finances available (whether cash or mortgage or a combination of both).

What I fail to understand is the EA's attitudes. If I were an EA at the moment, and a prospective buyer - who is chain-free and cash purchase or less than 50% LTV needed - offered 5% less than (reasonable) asking price, I would do my utmost to convince the seller to accept. The EAs round here don't work like that.

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The banks have had enough money pumped into them to mortgage every house on the planet, some money is available again, until the next bump on the cratered monetary road. Everyone thinks the bottom is in. Game on. The real bottom will not be funny.

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EA said "Ah, yes, we've had a lot of phone calls about that property today - it's created a huge amount of interest" (this was at 10.00am). "I'm afraid you can't view it yet, because the HIP isn't ready. However, I can take your name and add it to the list, so that when the HIP is ready you MAY get a phone call."

This leads me to ask two questions:

1. I thought EA's weren't allowed to market properties until HIPs were available to buyers

2. If reasonably-priced properties are in short supply, then sellers will be able to dictate the price (to a degree).

3. The EA is lying about the interest in the property.

Number 3 is much more likely.

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House prices are nothing to do with supply & demand of houses.

It's supply and demand of credit that dictates the prices.

Funds, not credit.

Funds are made up of mortgage, money, government loan, parental advance and probably some stuff I havn't thought of.

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The banks have had enough money pumped into them to mortgage every house on the planet, some money is available again, until the next bump on the cratered monetary road. Everyone thinks the bottom is in. Game on. The real bottom will not be funny.

A breakdown of trust, and fear that there is an ability to repay.....maybe?

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3. The EA is lying about the interest in the property.

Number 3 is much more likely.

Actually, I don't think he is lying. There are so few properties around at the moment in this area worth buying, that there are far more buyers than sellers.

I had a similar scenario a couple of weeks back - house on the market for £210,000, phoned up - EA said "There's been a huge demand for this property, and it's now sold over the asking price". 3 weeks later, same property re-appears on RM, but this time it's priced at £230,000. Again, it's SSTC.

If he was lying the first time around, they would hardly have marketed it up by £20K when it re-appeared, would they?

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Actually, I don't think he is lying. There are so few properties around at the moment in this area worth buying, that there are far more buyers than sellers.

I had a similar scenario a couple of weeks back - house on the market for £210,000, phoned up - EA said "There's been a huge demand for this property, and it's now sold over the asking price". 3 weeks later, same property re-appears on RM, but this time it's priced at £230,000. Again, it's SSTC.

If he was lying the first time around, they would hardly have marketed it up by £20K when it re-appeared, would they?

sellers determine the asking price, not the agent.

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