House Market Weakening?

[walk2dewater]

Whatever is going on, it's not the same thing that was going on 12 or 24 mths ago. That headline doesnt appear to benefit EAs, so why are they doing it? Surely they know the role of marketing the 'soft landing' myth is to pump prices. And surely they know that when prices stop rising they'll start falling.

Interesting to say the least

 

[Calina]

A simple reason would be to reduce sellers' expectations. If you suggest the market is slowing down, then you've some scope for getting the sellers to pull back on expecting half a million when the top offer in so far is 380K.

Interestingly enough, it's also been months since an estate agent dropped a begging "Please let us sell your house we've gazillions of people looking for property in your area and we'll even do it for half commission" flyer in the door. Very scientific of course.

 

[Calina]

I wonder how accurate the census figures are. Recently a friend told me that his landlord asked him not to fill in the census form and not to answer if they called to the door!! I was flabergasted but it got me thinking...I wonder how many landlords do that and how many other people don't answer the door for various reasons e.g. illegal immigrants have to be living somewhere.

Ask your friend if he is claiming his rent relief.

Even if he wasn't legal, I'd be complaining about him daring to suggest I didn't fill out a legally required form.

 

[Duplex]

When the top comes the fools go. We have relied on unprecedented housing construction to keep our debt driven economy going for five years. Speculators buying 50%+ of new builds, falling rental yields in the face of rising inflation and house prices and inward migration ?, the possibility that 15% of the housing stock is empty, the unpalatable fact the many Irish investors are credulous beyond ridicule. Lets not forget what happended in 2001, when prices statrted to fall before 9/11 and the easy credit binge.

 

[Purple]

A soft landing can be produced when interest rates are used to reduce price increases in a property market where demand is based on sound economic factors and not a speculative bubble. By it's nature if you prick a bubble it will burst. I think that the same irrationality and ignorance of basic economics that has fuelled the boom will fuel the bust. No soft landing IMHO.

 

[Guest107]

Lets not forget what happened in 2001, when prices started to fall before 9/11 and the easy credit binge.

A soggy soggy market it were indeed all of 2001 because I was looking around then and not feeling any pressure may I say . Semis in good areas of Galway City were around the £140k-£160k mark , up to €200k in our new currency. These have doubled in price since . The house market went off the boil in Galway from c august 2000 to march 2002, a soft landing I would call that now.

Then the bloody thing took off again about March 2002 until the present. If all of the recent boom were stripped out in a downturn then prices would correct by 50% of present values. Rents in those good areas I mentioned are now lower (or the same at best ) as 2001 and these are still the good areas may I add .

2001 (number 35 page 3 of 5 in PDF ) IR£270k or €330k

[broken link removed]

They are next door neighbours in a good area . This shows you how out of hand it got in Galway where the least affordable homes in ireland are to be found .

 

[phoenix_n]

Its the indo sensationalizing again.

Thats quite true. Announce a housing market crash on your front page and you are guaranteed more sales and more press coverage.

 

[delboy159]

It's easy to pick a few situations where prices are "dropping" here and there. I house across the road from me is on the market for 500k (small 2 bed Drumcondra - ex council estate). I predicted that I might - if things went well be going for 470/475k before I checked the price online - I expected the asking to start at 450k - and it might get bidded up the 470's at best.... To see it at 500k was mad beyond belief - they might drop to 480k and people will say the bubble is bursting, but to me there 5/10k over what I thought was max money anyway.

By the way a house 3 doors down from that one (same size) went for 360k nearly a year ago - so believe me 470/475k is mad money. 500k hs no hope... But the indo could make a sensational story out of it if they wanted to...

 

[room305]

Announce a housing market crash on your front page and you are guaranteed more sales and more press coverage.

But how much advertising revenue from angry real estate agents would you lose?

I still cannot figure out why real estate agents are admitting that property prices have fallen in certain areas (or the asking price has at least). My expectation was that they would deny a crash was occuring right up until it was no longer impossible to deny it at which point they would refer to it as a "temporary correction" or a recalibration and continue recommending full steam-ahead to potential buyers.

I can only imagine that the situation is worse than what they are admitting to. Perhaps there is a glut of unsold property coming onstream and they are trying to talk down seller's price expectations while at the same time hoping to not discourage potential buyers.

[FONT=Verdana, Arial] Estate agents said yesterday they had seen the first evidence of a "soft landing" after years of astounding growth.[/FONT]

[FONT=Verdana, Arial]
Falling asking prices could just as easily be the first sign of a coming crash. The article provided no evidence of either but I agree with W2DW - something very significant is occuring. Real estate agents do not talk like this. Ever.
[/FONT]

 

[hmmm]

I still cannot figure out why real estate agents are admitting that property prices have fallen in certain areas (or the asking price has at least).[FONT=Verdana, Arial]
[/FONT]

(speculating) I suppose whether or not prices are going up or down, estate agents need volume - if prices don't sell, they don't get commission. A stalled market with sellers holding out for unrealistic prices is worse than a falling market.

 

[soma]

[FONT=Verdana, Arial]something very significant is occuring. Real estate agents do not talk like this. Ever.
[/FONT]

Agree, I'm very confused as to why the EAs would actually make comments like this. There is no need for it - from the man in the street to the specu-vestor, 95% of the Irish public think all is rosey (and always will be) in the property market. Why let them think otherwise in a market where sentiment & conifdence is paramount..?

At a stretch - maybe, just maybe.. they feel the need to "talk ourselves into a soft landing" and are carrying out a pre-emptive strike. But it still makes no sense.. with simple comments like these they could do more damage to the "bull" outlook than 50 threads like this on AAM.

 

[bearishbull]

Maybe when things go bad they dont wanna be accused of not warning etc but if thats the case then they should have warned long ago!

 

[room305]

This is why I can't understand it. I can theorise that sellers expectations are too high and buyers can't match it (or possibly - the banks won't give them enough money to meet the sellers expectations). However, surely it would be better for them to continue with the usual bull story - a few well chosen anecdotes about how the market is holding up well in the face of rising interest rates, fundamentals are sound etc. Get some greed and fear back into the market.

Frankly, I doubt anyone could have predicted estate agents would have adopted this approach ...

The crash was always going to happen but I cannot fathom what the REAs are at trying to precipitate it. Surely, average Joe Investor when he reads that the REAs expect prices to fall or remain static over the next few months will be picking up the phone and putting his house on the market. Who would want a depreciating asset that produces very little yield? If you are a buyer what will be the incentive to buy now?

 

[Guest107]

but an EA who operates generally in a small area, say d11 , and who is squeezed by crazy prices wanted by national operators , would be tempted to break ranks and try to get shifting stuff by introducing reality.

this is an example from the southside _somewhere_

 

[room305]

This is in no way a case of a small REA breaking ranks, Alan Cooke, the CEO of the IAVI and Fintan McNamara, CEO of the IPAV, seem to be both singing from the same hymn sheet.

 

[Guest107]

the CEO of the IAVI and Fintan McNamara, CEO of the IPAV, seem to be both singing from the same hymn sheet.

oooooh thats different , sorry ..

 

[bearishbull]

This is why I can't understand it. I can theorise that sellers expectations are too high and buyers can't match it (or possibly - the banks won't give them enough money to meet the sellers expectations). However, surely it would be better for them to continue with the usual bull story - a few well chosen anecdotes about how the market is holding up well in the face of rising interest rates, fundamentals are sound etc. Get some greed and fear back into the market.

Frankly, I doubt anyone could have predicted estate agents would have adopted this approach ...

The crash was always going to happen but I cannot fathom what the REAs are at trying to precipitate it. Surely, average Joe Investor when he reads that the REAs expect prices to fall or remain static over the next few months will be picking up the phone and putting his house on the market. Who would want a depreciating asset that produces very little yield? If you are a buyer what will be the incentive to buy now?

Ah sure in the long term it will be grand! People who are buying for long term forget we'll have an oversupply due to the massive building rate we currently have and that incomes wont grow by anywhere near as much as they did in last ten years.

 

[Afuera]

I think this is a sign that the estate agents are between a rock and a hard place at the moment.

If they say nothing about a slowing/falling market then they could see a standoff between sellers who feel that their house is worth a lot more than buyers are offering (or able to offer). This standoff could drag out over years with very little selling or buying going on and therefore very little profits being generated by estate agents during this period; they only get paid when the transaction completes after all.

If they alert the market to the fact that sellers are now reducing their asking prices ,then sellers might be willing to place their houses on the market at more resonable levels and some buyers might be willing to bite. The gamble with this move is that buyers could see it as a sign of a turning market and start to hold back and wait for more falls. This could cause a substantial correction in the market; but if you think about it, in the eyes of the estate agents, a quick correction would certainly be better than a long drawn out slowdown.

A ten year slump is the last thing the estate agents want and would pull many of them under altogether.

The next twelve months are going to be very interesting!

 

[Remix]

The crash was always going to happen but I cannot fathom what the REAs are at trying to precipitate it.

Consumer sentiment has been falling quite rapidly in the face of rising interest rates and runaway prices for even the most basic houses.

Perhaps they are not offering the soft landing story to slow continuing expectations of the boom but instead are trying to raise expectations up from the growing and more widespread fear of a crash ?

 

[conor_mc]

I think this is a sign that the estate agents are between a rock and a hard place at the moment.

If they say nothing about a slowing/falling market then they could see a standoff between sellers who feel that their house is worth a lot more than buyers are offering (or able to offer). This standoff could drag out over years with very little selling or buying going on and therefore very little profits being generated by estate agents during this period; they only get paid when the transaction completes after all.

If they alert the market to the fact that sellers are now reducing their asking prices ,then sellers might be willing to place their houses on the market at more resonable levels and some buyers might be willing to bite. The gamble with this move is that buyers could see it as a sign of a turning market and start to hold back and wait for more falls. This could cause a substantial correction in the market; but if you think about it, in the eyes of the estate agents, a quick correction would certainly be better than a long drawn out slowdown.

A ten year slump is the last thing the estate agents want and would pull many of them under altogether.

The next twelve months are going to be very interesting!

Best hypothesis I've read yet anyway....