Saturday, January 24, 2009

What a refreshing change

Why househunters need not hurry

Three principal factors influence the short-term direction of house prices: the supply of mortgages, the level of employment and market confidence. A quick examination of each factor suggests that we are still a long way off the bottom. Falling house prices are now firmly entrenched in homebuyers' psyche, increasing the chances of a destructive downward spiral. When prices are falling, there is an incentive for buyers to delay purchasing. This resulting fall in demand forces vendors who need a sale to cut prices further, but this only encourages buyers to delay further, and so the cycle continues. Nobody ever rings a bell at the bottom of the market, but it seems a safe bet that buyers are not going to be in a worse position in six months to a year's time.

Posted by little professor @ 12:29 AM (1837 views)
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12 thoughts on “What a refreshing change

  • Wow. Never thought I’d see an article like this in the Times. The editor must be on holiday.

    Nice to see the same arguments that we’ve been using for the past year (or more) finally appearing in print.

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  • “Nobody ever rings a bell at the bottom of the market, but it seems a safe bet that buyers are not going to be in a worse position in six months to a year’s time.”

    Of all media sources, it’s The Times saying this!!

    Interesting times.

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  • wise words indeed..

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  • japanese uncle says:

    So the Times seems to have hardly any consistent position on this subject. Andrew Ellson, Personal Finance Editor says one thing, while Anatole Kaletsky and David Smith say something uetterly opposite. Admittedly any newspaper has certain spectrum of argument depending on individual writer/author/reporter. But the descrepancy of this magnitude is nothing short of schizophrenic. Or can we expect to see Anatole Kaletsky and David Smith reverse their arguments 180 degrees next week?

    Anyway thanks to the development of the internet, commentators’ past arguments are now easily tracked; it is no use withdrawing or deleting the past articles from the official website, as they are downloaded onto millions of PCs. Today’s media has no longer any room for irresponsible comments. In July,2007 I predicted ‘chaos of a galactic order’, which has been more or less vindicated, while what sort of rubbish readers of this newspaper have been bombarded with meanwhile!

    ——————————————————-
    japanese uncle said…
    Merding’s role for this phase of boom-and-bust (2003-2012) is over. He has done a good job, particularly by maximizing the size of the bubble through lowering rather than raising the IR at the crucial point in 2005. Now the chaos of a galactic order has been perfectly arranged (at both sides of the pond) during which trillions of assets will change hands generally from the poor to the mega-rich, he might be feeling like revealing just a bit of original scholastic conscience, hence this comment. He may also wish to say, “No hard feeling. Job’s a job.”

    Saturday, July 21, 2007 08:25AM

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  • Anne Ashworth must be spitting chunks.

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  • “As we report in our cover story, some commentators are suggesting that prospective buyers should jump into the market now. They argue that there are bargains to be had and that affordability is the best it has been for years. While this may be true, there is an even more persuasive argument that there will be better bargains and greater affordability for those who are prepared to wait. ”
    ……….Cover story will be seen and read while this alternate view has been buried in the money section, I retract my earlier comment, the Times hasn’t changed it tack at all.

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  • stillthinking says:

    House hunters without jobs will be in a worse position.

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  • When prices do hit the bottom, they will go sideways for a few years before rising again as in the 1970’s and 1990’s. Pay may rise in those years which will hellp affordability further. Don’t be conned back by the Banks or Estate Agents.

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  • “Spot on article. Your not going to be very popular with Ashworth, Smith and Kaletsky though.

    les, plymouth, uk”

    Well said Les in Plymouth.

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  • I have to say it is rare to read words of such a deep philosophical nature as japanese uncle. He should have my name.

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  • Do you think the Times might have had a clearout of the usual idiots?

    We’ll have to see, but its high time – David Smith, Kaletsky and Gary Duncan were starting to sound very tiresome. Carping on about how “lending must return to normal levels” and latching on to trump up about the vaguest piece of non-pessimistic news about the housing market.

    Good riddance to bad rubbish I say.

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  • “….but it seems a safe bet that buyers are not going to be in a worse position in six months to a year’s time.”

    One must assume the writer means ‘potential buyers’, rather than actual buyers who have bought in the present climate.

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