UK House Prices -The next bubble waiting to burst ??
jl202 - Tue, 20 Dec 05 :
PremierPompey - 20 Dec'05 - 09:59 - 15595 of 15621
Notes from North Essex
Four bed detatched properties are not selling, full stop. People are trying to rent them out so that they can move. This, to me, shows that prices are indeed falling in my area but people are sticking their heads in the sand. Basically they are saying "It's worth £300,000, I know it is, but nobody's buying at the moment so we'll just rent it out". Because these people are not desperate to sell this fall in value is not yet reflceted in any figures.
>>> This is an important feature of the housing market which is why prices don't just "crash". Prices are sticky downwards for all sorts of reasons, including that rather than selling a property it can be rented out, thus extending the period in which to find the market's most gullible/stupid/or desperate buyer.
Of course if you forced the same volume through the market as was the case in 2003-2004 (ending June 2004) then prices would rapidly plummet. But housing stock supply is just as elastic as demand and quickly adjusts to ensure the clearing price does not f*ck the seller up the @rse if at all possible. Peeps take the property off the market rather than lower the price any further.
