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Kyoto

A Bull Argument That Really Annoys Me

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... is this idea that 'if we don't get the price we want, we simply won't sell / take it off the market / wait for the market to recover'.

A few reasons why this particular one bugs me.

First, If you're house is up for sale, you clearly have some degree of motivation to move. People don't generally sell the roof over their heads for the fun of it so most sellers will tend towards 'need to sell.'

Second, prices are set at the margins. If a comparable house on your road sells for buttons, the price has changed underneath you. Sellers generally need to realise that they don't set the price - they need to respect that the market does.

Third, 'waiting for the market to recover' implies that current price falls are a temporary state of affairs and that the current market is somehow 'abnormal'. And yet, add a tiny bit of context and look at a chart of prices this decade and you'll see that todays market is enormously inflated. Maybe, for instance, house prices are looking at is a 280% increase instead of a 300% one over that time period. Why have they so quickly accepted these bubble prices as the new normal?

Fourth, this argument doesn't even contemplate the crazy notion that house prices might not return to their peak for a loooong time. Even if you're bull with some motivation to sell, surely you have to consider the worst case scenario?

Fifth, these same sellers who 'simply won't sell for less than asking', would absolutely crap themselves and possibly rush for the exit if they saw rising interest rates and long periods of falling house prices eating away their equity. It's a kind of false bravado as they are clearly impacted by market movements associated with their biggest store of wealth (again, particularly at time when they have some level of 'need' to sell.).

Finally, in a slow moving and illiquid market such as housing, it's really difficult to set the correct price. Unless you have lots of recent data about comparable houses on your street, it's easy to imagine that you could overprice or underprice by 10%. Considering, say, £289 as the one true price, and an offer of £269 as wrong (or derisory / silly), is a bit arrogant when there's so many variables involved. Sellers generally have to accept that there's some margin for error and debate in their valuation regardless if they want to sell in any market besides a bubble.

Phew, glad I got that off my chest. What are yoru thoughts on the above, and what are the bull theories that you really see as flawed?

Edited by Kyoto

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... is this idea that 'if we don't get the price we want, we simply won't sell / take it off the market / wait for the market to recover'.

A few reasons why this particular one bugs me.

First, If you're house is up for sale, you clearly have some degree of motivation to move. People don't generally sell the roof over their heads for the fun of it so most sellers will tend towards 'need to sell.'

Second, prices are set at the margins. If a comparable house on your road sells for buttons, the price has changed underneath you. Sellers generally need to realise that they don't set the price - they need to respect that the market does.

Third, 'waiting for the market to recover' implies that current price falls are a temporary state of affairs and that the current market is somehow 'abnormal'. And yet, add a tiny bit of context and look at a chart of prices this decade and you'll see that todays market is enormously inflated. Maybe, for instance, house prices are looking at is a 280% increase instead of a 300% one over that time period. Why have they so quickly accepted these bubble prices as the new normal?

Fourth, this argument doesn't even contemplate the crazy notion that house prices might not return to their peak for a loooong time. Even if you're bull with some motivation to sell, surely you have to consider the worst case scenario?

Fifth, these same sellers who 'simply won't sell for less than asking', would absolutely crap themselves and possibly rush for the exit if they saw rising interest rates and long periods of falling house prices eating away their equity. It's a kind of false bravado as they are clearly impacted by market movements associated with their biggest store of wealth (again, particularly at time when they have some level of 'need' to sell.).

Finally, in a slow moving and illiquid market such as housing, it's really difficult to set the correct price. Unless you have lots of recent data about comparable houses on your street, it's easy to imagine that you could overprice or underprice by 10%. Considering, say, £289 as the one true price, and an offer of £269 as wrong (or derisory / silly), is a bit arrogant when there's so many variables involved. Sellers generally have to accept that there's some margin for error and debate in their valuation regardless if they want to sell in any market besides a bubble.

Phew, glad I got that off my chest. What are yoru thoughts on the above, and what are the bull theories that you really see as flawed?

The market sets the price, quite true. Unfortunately that cuts both ways, the market could include people that would be prepared to may 2007 type prices for houses. The problem is for vendors, is that there are few of them left and they are shrinking. There is a stand-off at the moment, I see many properties simply not selling and for those that have unexpected price expectations for their house but need to sell, will have to eat a large slice of humble pie.

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+1

The “I’ll wait till the market has recover” was a symptom of the way the housing market was working. However in today’s market it is as logical as believing that prices can only ever go up. I’ve got a few properties locally that have been on the market for two to two and half years. The common factor that I can see about them is that zero interest rate policy has given them the luxury of sitting tight. One of them dropped the price by three percent and yet it’s so obviously overpriced. They really think that “it’s worth it” despite the fact that they see a steady stream of properties in their street sell at the market price being frankly nicer.

Every day that passes must be making it hard for this mindset to survive, the traditional of the last fifteen years is going to be replaced by something that’s never have been experienced. It’s quaint to see as we’re the last generation where it’ll be seen.

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+1

The “I’ll wait till the market has recover” was a symptom of the way the housing market was working. However in today’s market it is as logical as believing that prices can only ever go up. I’ve got a few properties locally that have been on the market for two to two and half years. The common factor that I can see about them is that zero interest rate policy has given them the luxury of sitting tight. One of them dropped the price by three percent and yet it’s so obviously overpriced. They really think that “it’s worth it” despite the fact that they see a steady stream of properties in their street sell at the market price being frankly nicer.

Every day that passes must be making it hard for this mindset to survive, the traditional of the last fifteen years is going to be replaced by something that’s never have been experienced. It’s quaint to see as we’re the last generation where it’ll be seen.

Exactly, ZIRP has bailed them out and given them the luxury of a little time.

I imagine things would look different if they were still paying that crippling 6% mortgage payment against this backdrop.

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... is this idea that 'if we don't get the price we want, we simply won't sell / take it off the market / wait for the market to recover'.

A few reasons why this particular one bugs me.

First, If you're house is up for sale, you clearly have some degree of motivation to move. People don't generally sell the roof over their heads for the fun of it so most sellers will tend towards 'need to sell.'

Second, prices are set at the margins. If a comparable house on your road sells for buttons, the price has changed underneath you. Sellers generally need to realise that they don't set the price - they need to respect that the market does.

Third, 'waiting for the market to recover' implies that current price falls are a temporary state of affairs and that the current market is somehow 'abnormal'. And yet, add a tiny bit of context and look at a chart of prices this decade and you'll see that todays market is enormously inflated. Maybe, for instance, house prices are looking at is a 280% increase instead of a 300% one over that time period. Why have they so quickly accepted these bubble prices as the new normal?

Fourth, this argument doesn't even contemplate the crazy notion that house prices might not return to their peak for a loooong time. Even if you're bull with some motivation to sell, surely you have to consider the worst case scenario?

Fifth, these same sellers who 'simply won't sell for less than asking', would absolutely crap themselves and possibly rush for the exit if they saw rising interest rates and long periods of falling house prices eating away their equity. It's a kind of false bravado as they are clearly impacted by market movements associated with their biggest store of wealth (again, particularly at time when they have some level of 'need' to sell.).

Finally, in a slow moving and illiquid market such as housing, it's really difficult to set the correct price. Unless you have lots of recent data about comparable houses on your street, it's easy to imagine that you could overprice or underprice by 10%. Considering, say, £289 as the one true price, and an offer of £269 as wrong (or derisory / silly), is a bit arrogant when there's so many variables involved. Sellers generally have to accept that there's some margin for error and debate in their valuation regardless if they want to sell in any market besides a bubble.

Phew, glad I got that off my chest. What are yoru thoughts on the above, and what are the bull theories that you really see as flawed?

Death and the sale by the benefactors, divorce, job gone /moved are the main reason for sales, always have been always will be. The house I am renting is because the only work the owner could find was in the middle east and the one I am movng to has been on the market for 9 months sitting empty following divorce by the owners. People can hold on for a little while but I know dads who see their families one day a week or two days a month (if abroad) because they are holding on. The behaviour is dreadful but there you go - thats greed and stupidity for you.

Agents have been fighting for any property to sell while people have been holding out. Some property overpriced means you have a business. An agent with no property is not an agent so often they have been more or less letting vendors set the price.

People looked at prices asked for and hoped it would magic back. Some, albeit tiny numbers, sold. The alternative (our view) takes a while to accept.

I think vendors are starting to crap themselves. An overmortgaged acquaintance of mine who last bought in 2004 and has "released some equity" for a new car and a power shower goes for lots of long walks (and I mean miles through town in the middle of the night - really going unhinged behaviour) and is giving his family a bad time. I understand the first big batch of tax letters arrive today on top of the family allowance changes and public sector pensions and the cuts finally kicking in.

Edited by AndyAndy

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+1

The "I'll wait till the market has recover" was a symptom of the way the housing market was working. However in today's market it is as logical as believing that prices can only ever go up. I've got a few properties locally that have been on the market for two to two and half years. The common factor that I can see about them is that zero interest rate policy has given them the luxury of sitting tight. One of them dropped the price by three percent and yet it's so obviously overpriced. They really think that "it's worth it" despite the fact that they see a steady stream of properties in their street sell at the market price being frankly nicer.

Every day that passes must be making it hard for this mindset to survive, the traditional of the last fifteen years is going to be replaced by something that's never have been experienced. It's quaint to see as we're the last generation where it'll be seen.

Its also a symptom of classic bubble mentality...and boy, 10 years is a long time to be training the mentality....as soon as there were falls, and the banksters cut capital cash returns, the "bubblers" went back to all they had learned....and bought in again (well, decided to take the plunge with more borrowing...thats what they are ACTUALLY buying).

and now the suckers rally is over ( or bull trap if you are an investor).......

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... is this idea that 'if we don't get the price we want, we simply won't sell / take it off the market / wait for the market to recover'.

A few reasons why this particular one bugs me.

First, If you're house is up for sale, you clearly have some degree of motivation to move. People don't generally sell the roof over their heads for the fun of it so most sellers will tend towards 'need to sell.'

Second, prices are set at the margins. If a comparable house on your road sells for buttons, the price has changed underneath you. Sellers generally need to realise that they don't set the price - they need to respect that the market does.

Third, 'waiting for the market to recover' implies that current price falls are a temporary state of affairs and that the current market is somehow 'abnormal'. And yet, add a tiny bit of context and look at a chart of prices this decade and you'll see that todays market is enormously inflated. Maybe, for instance, house prices are looking at is a 280% increase instead of a 300% one over that time period. Why have they so quickly accepted these bubble prices as the new normal?

Fourth, this argument doesn't even contemplate the crazy notion that house prices might not return to their peak for a loooong time. Even if you're bull with some motivation to sell, surely you have to consider the worst case scenario?

Fifth, these same sellers who 'simply won't sell for less than asking', would absolutely crap themselves and possibly rush for the exit if they saw rising interest rates and long periods of falling house prices eating away their equity. It's a kind of false bravado as they are clearly impacted by market movements associated with their biggest store of wealth (again, particularly at time when they have some level of 'need' to sell.).

Finally, in a slow moving and illiquid market such as housing, it's really difficult to set the correct price. Unless you have lots of recent data about comparable houses on your street, it's easy to imagine that you could overprice or underprice by 10%. Considering, say, £289 as the one true price, and an offer of £269 as wrong (or derisory / silly), is a bit arrogant when there's so many variables involved. Sellers generally have to accept that there's some margin for error and debate in their valuation regardless if they want to sell in any market besides a bubble.

Phew, glad I got that off my chest. What are yoru thoughts on the above, and what are the bull theories that you really see as flawed?

Agreed......an annoying and arrogant behaviour pattern. The flippside is that these same sheeple will believe the 'experts' who extend straight line graphs when the downturn becomes established. Their lemming like behavior will hasten the bottominmg out of prices.

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Exactly, ZIRP has bailed them out and given them the luxury of a little time.

I imagine things would look different if they were still paying that crippling 6% mortgage payment against this backdrop.

Mind you for rates to return to their traditional average of say 6% we’ve got to have a period of far higher rates. I don’t think that these “cause it’s worth it” bulls quite understand that, personally I pity their naivety.

We don't know what the effect of the proposed tightening of mortgage lending criteria will have that is a total unknown. From the noise coming from the likes of the CML you can see that that is what they fear more than anything.

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Re' your points:

People's motivation to sell isn't always so they can move. There are a lot of people who see selling as a way of making money. They bought "an investment". These are the people who "won't sell for less than what it's worth". They've seen Location and Sarah Beeny and know how it goes.

Margins - agreed but these same sellers expect to sell their house high and buy another low. This might be out of greed or as is often the case, the thinking is "my place is nice and hasn't been affected by the downturn unlike all my neighbours". Sometimes it's pride, arrogance, stupidity etc. However, I now see sellers are looking hard at the price they bought at and having to face the terrible prospect of "not making any money". Selling below what they paid for a property is a scary concept for a lot of people. Of course they are forgetting all the additional costs of selling buying and all the interest payments etc in the time they lived in the property - it's just the buy/sell price they consider. This is a really big psychological hurdle for people to get over. Don't underestimate how hard it will be for people in this situation.

"Waiting for the market to recover" - people who believe all the BS the MSM and EA's tell them. Spring bounce/Autumn bounce etc. These people don't look at charts and data. We do but they don't. Most people seem to think that the boom times were "normal" and that what we are going through is a bit of a blip. It hasn't penetrated their thick skulls yet that we are moving back to where "normal" should be.

Bulls and worst case scenario. Some friends and family are now starting to express concern for jobs etc and no longer see me as having quite such odd opinions. However the majority of people do not plan for rainy days or even think there will be any so why plan for them. Hey as long as they get a new car every few years, spend too much at Xmas and take lots of holidays then life is how it should be because they deserve it. (A word that always gets my hackles up).

Yes they will crap themselves when interest rates go up and there will be a rush to the exits. Not so sure about the bravado. You give the average punter too much credit. I think it's more like a lack of knowledge.

Offers - we just offer what a place is worth to us. If someone (the seller or another buyer) thinks it's worth more, then good luck to them. I don't think your average seller thinks about margin of errors for valuation/offers etc. For them it's more about what did my neighbour get last year, or what did the EA's tell me I'd get for the place.

Spleen vented...

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Exactly, ZIRP has bailed them out and given them the luxury of a little time.

I imagine things would look different if they were still paying that crippling 6% mortgage payment against this backdrop.

I told someone with an overpriced house that they can't sell the other day that if you haven't used the last few years of low interest rates to either batten down your hatches or launch the lifeboats then you deserve to go down with your ship.

Pardon the nautical analogies.

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This ignorant group of MEWed bulls frankly are going to get all they deserve. After the last property crash, rates went down and lending supply shot up, this time round the opposite is happening. I can see some real unrest coming.

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Re' your points:

People's motivation to sell isn't always so they can move. There are a lot of people who see selling as a way of making money. They bought "an investment". These are the people who "won't sell for less than what it's worth". They've seen Location and Sarah Beeny and know how it goes.

Margins - agreed but these same sellers expect to sell their house high and buy another low. This might be out of greed or as is often the case, the thinking is "my place is nice and hasn't been affected by the downturn unlike all my neighbours". Sometimes it's pride, arrogance, stupidity etc. However, I now see sellers are looking hard at the price they bought at and having to face the terrible prospect of "not making any money". Selling below what they paid for a property is a scary concept for a lot of people. Of course they are forgetting all the additional costs of selling buying and all the interest payments etc in the time they lived in the property - it's just the buy/sell price they consider. This is a really big psychological hurdle for people to get over. Don't underestimate how hard it will be for people in this situation.

"Waiting for the market to recover" - people who believe all the BS the MSM and EA's tell them. Spring bounce/Autumn bounce etc. These people don't look at charts and data. We do but they don't. Most people seem to think that the boom times were "normal" and that what we are going through is a bit of a blip. It hasn't penetrated their thick skulls yet that we are moving back to where "normal" should be.

Bulls and worst case scenario. Some friends and family are now starting to express concern for jobs etc and no longer see me as having quite such odd opinions. However the majority of people do not plan for rainy days or even think there will be any so why plan for them. Hey as long as they get a new car every few years, spend too much at Xmas and take lots of holidays then life is how it should be because they deserve it. (A word that always gets my hackles up).

Yes they will crap themselves when interest rates go up and there will be a rush to the exits. Not so sure about the bravado. You give the average punter too much credit. I think it's more like a lack of knowledge.

Offers - we just offer what a place is worth to us. If someone (the seller or another buyer) thinks it's worth more, then good luck to them. I don't think your average seller thinks about margin of errors for valuation/offers etc. For them it's more about what did my neighbour get last year, or what did the EA's tell me I'd get for the place.

Spleen vented...

Selling an investment might be true in London and other heavily populated parts of the country and applicable to certain types of property such as flats but in many smaller cities and towns its just not the case. Moreover lots of these investments are flats in city centre developments that have been hobbled for a while.

Also the prospect of material house price falls in the long run as been around for 2 or even 3 years if you take NR as a start point although Lehman was the big one a year later - the time to sink in bit is well along already.

Finally I agree people do not think ahead. However, for many its the now that starting to smack them in the face. There were 300,000 more pensioners this year than last as the baby boomers retire and their pension rights are lousy.

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Selling an investment might be true in London and other heavily populated parts of the country and applicable to certain types of property such as flats but in many smaller cities and towns its just not the case. Moreover lots of these investments are flats in city centre developments that have been hobbled for a while.

Also the prospect of material house price falls in the long run as been around for 2 or even 3 years if you take NR as a start point although Lehman was the big one a year later - the time to sink in bit is well along already.

Finally I agree people do not think ahead. However, for many its the now that starting to smack them in the face. There were 300,000 more pensioners this year than last as the baby boomers retire and their pension rights are lousy.

Yet another downward pressure on the market.

We may not have the crash that we foresaw as it’s looking a lot worse. The present government have show that they are happy to try to tuff it out and that delay in response to what’s going on could have a major influence on the next election.

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From today's Leicester Mercury property supplement:

Confidence in market fading

The survey reveals that only 63 per cent of homeowners now expect property prices to rise over the next six months . . .

[from Housing Market Sentiment Survey - zoopla.co.uk]

ONLY!

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From today's Leicester Mercury property supplement:

Confidence in market fading

The survey reveals that only 63 per cent of homeowners now expect property prices to rise over the next six months . . .

[from Housing Market Sentiment Survey - zoopla.co.uk]

ONLY!

The recent Rightmove survey posted on this forum kept trying to record your results as if you wanted to move. So those surveys aren’t creditable, and that’s before you look at the fact that the only responders are going to be moving anyhow.

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... is this idea that 'if we don't get the price we want, we simply won't sell / take it off the market / wait for the market to recover'.

(...)

I feel a bit embarrassed to say this, but, I confess, I feel a delicious schadenfreude when I hear that.

Prices are already falling, and will keep falling for the foreseeable future. And real prices will never (ever) be as high as they were at the peak. These arrogant smug idiots will wait forever, and the more they wait, the more they'll lose. :) I am sorry for having this sentiments, but I am not a saint, and I do resent most of them - the undeserving morons.

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This all assumes that sellers could take the financial 'hit' if they absolutely had to. What about those who managed to get on the ladder in 07/08 with a 115% mortgage - ie, they are already in negative equity. I know of such a couple and the minute they worked out a minor price fall had put them in n/e they took their house straight off the market and accepted that they were going to be there for a while. Thing is, they're intelligent people too!

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You should use the other classic bull argument as to why people will have to buy at an inflated price to negate this one and point out why people will have to sell after cutting their price significantly

"People have to get on with their lives"

Edited by wealthy

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I feel a bit embarrassed to say this, but, I confess, I feel a delicious schadenfreude when I hear that.

Prices are already falling, and will keep falling for the foreseeable future. And real prices will never (ever) be as high as they were at the peak. These arrogant smug idiots will wait forever, and the more they wait, the more they'll lose. :) I am sorry for having this sentiments, but I am not a saint, and I do resent most of them - the undeserving morons.

Love it. Everyone here feels the same openly or otherwise. Mrs pent up has branded me evil on several occasions.

"wait for the Market to recover"

I think many people have been doing this for two to three years already. I believe that it's a combination of prices nearing peak and a fear of another dip that has caused the influx of properties on the Market. It's not HIPS. That's VI bull shit. The dates don't match up and if you do a rightmove price comparison report for almost any postcode you see that new listings are very similar pre hips to post hips. It's houses not selling causing the glut.

How much of this penny up supply would be prepared to wait another 3 years just to get back to where we are now? I think a further housing drop will worry these people the most. Now or never?

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Why do these attitudes annoy you?

They are the very things that will allow you to get a property even cheaper

They annoy me because I'd rather the turd got flushed sooner rather than later instead of people standing around ignoring it. It really does smell.

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They annoy me because I'd rather the turd got flushed sooner rather than later instead of people standing around ignoring it. It really does smell.

what was that about people wanting to get on with their lives ?

Waiting for the best price involves, errr, waiting

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what was that about people wanting to get on with their lives ?

Waiting for the best price involves, errr, waiting

That's a myopic view, this isn't just about housing. I can go out and get a house tomorrow and not really care about it. It's the fact that it makes the economy sluggish and uncompetitive, and the longer that goes on the worse it is for everyone.

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This all assumes that sellers could take the financial 'hit' if they absolutely had to. What about those who managed to get on the ladder in 07/08 with a 115% mortgage - ie, they are already in negative equity. I know of such a couple and the minute they worked out a minor price fall had put them in n/e they took their house straight off the market and accepted that they were going to be there for a while. Thing is, they're intelligent people too!

they're fine as long as: wages in > bills out.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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