Wednesday, October 15, 2008
A change in mainstream sentiment
Remember, home-owners have had more than 10 years of house-price rises, and psychologically it is difficult to accept that values are falling quite dramatically. Remind yourself that if it was possible for prices to rise 15 per cent in a year, which they did in years such as 2002-3 and 2006-7, it is equally possible for them to drop by that amount in 2007-8. Unfortunately, buyers are not interested in how much you paid for your home - nor how large your mortgage is - so wanting to make a profit or get out what you put in are no longer viable. For a long time we have been told in defence of soaraway values that the market sets the price. That applies equally to a recession as to a boom.