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Fear Of Missing Out (FOMO) - Human Nature

FOMO - HPI+ for Buyers, is there now FOMO pressuring prices down?  

22 members have voted

  1. 1. Will FOMO cause HPI to move? FYI HPI In this context is House Price Index

    • Yes - large increases in HPI, i.e. House Prices Go Up
      1
    • Yes - steady and gradual incresaes in HPI, i.e. House Prices Go Up
      2
    • Yes - small increases in HPI, i.e. House Prices Go Up
      3
    • No - small decreases in HPI, i.e. House Prices Go Down
      2
    • No - steady and gradual decreases in HPI, i.e. House Prices Go Down
      6
    • No - large decreases in HPI, i.e. House Prices Go Down
      4
    • Other - Please specify in comments
      4


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I was thinking to myself that there is FOMO in life with a lot of things, including house buying.

Buying property when HPI is positive has fuelled the FOMO in a lot of buyers, resulting in even higher prices through speculation, the need to get on the housing ladder, or buying hundred of BTL to name but a few reasons.

Now my observations especially with RICS and Rightmove showing negative HPI, I was wondering what people think about how the FOMO will be affected now the negative publicity and higher taxation is more widespread. I was thinking myself that FOMO is two fold,

1 Sellers flood the market to achive the highest price before the prices continue to fall and they cant sell at any price?

2 Buyer hold back from buying in FOMO of getting the property of their dreams at a much lower price than they ever expected to?

So the question is...

Will FOMO chase the prices down creating a snowball effect on house prices?

Please feel free to respond and comment your reasons.

Cheers

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Human nature/heard mentality is a wonderful and powerful thing. 

I dont remember the last proper crash 80's/90's (too young) but maybe someone who can could comment on the mentality. 

Noone wants to be the social pariah and its this that drive the fear of missing out in most. What will be different this time is the social media aspect of the housing market. 

For the last 5-10 years its been full of aspirational people talking about buying, showing off their new house/car etc. When i start seeing people posting about being able to finally sell on a regular basis, outside of the specialist forums, i will accept that the FOMO worm will have turned to the seller side.

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18 minutes ago, Monkey said:

Human nature/heard mentality is a wonderful and powerful thing. 

I dont remember the last proper crash 80's/90's (too young) but maybe someone who can could comment on the mentality. 

Noone wants to be the social pariah and its this that drive the fear of missing out in most. What will be different this time is the social media aspect of the housing market. 

For the last 5-10 years its been full of aspirational people talking about buying, showing off their new house/car etc. When i start seeing people posting about being able to finally sell on a regular basis, outside of the specialist forums, i will accept that the FOMO worm will have turned to the seller side.

More like 15 -20 years.

It is just too hard to imagine living in the UK where sentiment is anything but ingrained to expect forever higher house prices, no matter how nuts things are at the moment, but I am sure it can happen, will happen?

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What does it mean for "HPI to move?" Does this mean affect the rate of HPI? (e.g. if HPI is 2% and then, because of FOMO it increase to 3%) How would you measure the impact of FOMO? How could we know people were buying for FOMO after a certain point, but not before?

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3 minutes ago, localhero1983 said:

More like 15 -20 years.

It is just too hard to imagine living in the UK where sentiment is anything but ingrained to expect forever higher house prices, no matter how nuts things are at the moment, but I am sure it can happen, will happen?

I was talking specifically about the macrosphere of social media, where you can not show a unhappy side. Everything has to be asperational. 

Social media like facebook has only really taken off 10 years ago, before that you only heard of the asperational life style of others who was not famous, by word of mouth, through friends, family and down the pub. 

What i was trying to say is that its the fashion to be seeing buying houses/cars at the moment. And thats plastered over facebook etc. There are some specialist forums like here, where some people are posting about selling their house/car and are seen asperational to free your self of such burden. But out side of the specilast forums that mentality has not propergated.... yet. And like every other fashion it will change. When it starts it will be slow but then you will be flooded with it, sentiment will change, its human nature to

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FOMO can only ever be a temporary effect - it's just pulled-forward demand i.e. people doing now what they'd rather do later but fear may not be possible later.

If anything it will tend to run alternately in different directions - people race to buy for FOMO when prices are rising, and race to sell for FOMO when prices are falling.

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I'm 55 and most friends are healthy skeptics who bought cheap then paid off their 1 house rather than 'pushing it'.  Nice cars and hols but nothing OTT

We have a few friends who doubled down and have 1 or more BTLs, a trophy house, big mortgage but big equity, world class holidays etc.
On paper they are the wealthiest - but you always see that slight hint of doubt creep into their eyes when we talk about owning our house outright, pensions starting to kick in, don't need to keep working if we don't want to..

 - you know, that "what did I miss? look..."

Heh heh...

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FOMO does induce undue stress.  Social media just exacerbates it cause and effect. 

social media is just a check list of disappointment and lies unless you have the most sorted life going to parade to everyone else and even if you do why would you want to show it off to others unless you are sad fucckker.

relationship status married =winner single =loser.

liked photos =winner photos with no reaction =loser 

amount of friends big =winner low amount =loser

new car leased = winner 

big mortgage on big place = winner 

going on holiday with credit cards = winner

old paid off car =loser

small paid off house =loser

cheap holidays paid with cash=loser. 

  

 

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FOMO and the hysteria that can go with it is key to high house price inflation in my view.  It can only come with conditions of scarcity and competitive bidding.  FOMO is always going to be a factor in the UK until there is adequate supply to meet demand...folks are missing out because there is inadequate supply.

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5 minutes ago, longgone said:

FOMO does induce undue stress.  Social media just exacerbates it cause and effect. 

social media is just a check list of disappointment and lies unless you have the most sorted life going to parade to everyone else and even if you do why would you want to show it off to others unless you are sad fucckker.

relationship status married =winner single =loser.

liked photos =winner photos with no reaction =loser 

amount of friends big =winner low amount =loser

new car leased = winner 

big mortgage on big place = winner 

going on holiday with credit cards = winner

old paid off car =loser

small paid off house =loser

cheap holidays paid with cash=loser. 

  

 

How do you know someone’s quit facebook? They tell you they’ve quit facebook. :)

I quit years ago and don’t miss that stalker site one iota.

All social media changes human behaviour. Everything becomes Performative, even distress, sadness, anger. Matt Haig’s made a career out of Admitting He’s Sad.

Other people are hell, and allowing other people’s projections into your waking thoughts is asking for problems.

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7 minutes ago, PeanutButter said:

How do you know someone’s quit facebook? They tell you they’ve quit facebook. :)

I quit years ago and don’t miss that stalker site one iota.

All social media changes human behaviour. Everything becomes Performative, even distress, sadness, anger. Matt Haig’s made a career out of Admitting He’s Sad.

Other people are hell, and allowing other people’s projections into your waking thoughts is asking for problems.

+1

Dont miss it at all.

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1 hour ago, PeanutButter said:

 

Other people are hell, and allowing other people’s projections into your waking thoughts is asking for problems.

i won`t disagree with that.  The more i see people in the real world the more i dislike them. 

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I made a face book bizzness page because all businesses need one apparently. Haven’t touched it. Probably good money to be made if you can tap into people’s psyche, make them feel important in some way that happens to promote your business too.

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14 minutes ago, Arpeggio said:

I made a face book bizzness page because all businesses need one apparently. Haven’t touched it. Probably good money to be made if you can tap into people’s psyche, make them feel important in some way that happens to promote your business too.

If the only web presence a business has is a facebook page I tend to ignore them as a business. A Wix site or similar isn’t difficult and projects a far more serious image.

Interesting article on the weird products flogged via facebook and instagram. And how they harvest our details.

https://www.theatlantic.com/technology/archive/2018/01/the-strange-brands-in-your-instagram-feed/550136/

 

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1 hour ago, PeanutButter said:

If the only web presence a business has is a facebook page I tend to ignore them as a business. A Wix site or similar isn’t difficult and projects a far more serious image.

Interesting article on the weird products flogged via facebook and instagram. And how they harvest our details. 

https://www.theatlantic.com/technology/archive/2018/01/the-strange-brands-in-your-instagram-feed/550136/

I agree with you, particularly if they are an online only business. If they are a face to face business and a good one, they won't even need online presence. That said, for the sake of just having an online presence it is best to have a website not just a FB page. Interesting article. I watched some of Rory's vids. It's the bits where he makes up for the lack of "Build it and they will come" on the internet. That's what really counts.

Edited by Arpeggio

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Voted other

YES, FOMO will cause HPI to move  .... will cause prices to go down.

Perfect example:

Was today talking to someone who rejected 1.1M almost 2 years ago has had 2 failed agreed bids each taking best part of 6 months and is now asking 1M but seriously considering 925k.

Already aware has missed out. Worried what will happen next. Therefore considering accepting less than would otherwise. == FOMO

FOMO is important but works both ways

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"I should add that at no time does fear disappear.  It’s just as bad in the hundredth fight as it was in the first, except by the time he reaches a hundred fights or long before that he’s developed enough discipline where he can learn to live with it, which is the object, to learn to live with it."

– Cus D’Amato (trainer of Mike Tyson)

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


      • down 5% +
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      • Even
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