Over the last three months, the daftwatch ( daftwatch.atspace.com/ ) inventory of properties for sale on the Daft.ie website has stopped increasing despite the failure of the boom to get boomier (indeed, it seems that the gloom has got both doomier and gloomier). Credit has been strangled, jobs are being lost, house prices are falling etc. etc. So why has the inventory stopped increasing? I would be interested to hear the view of pinsters as to the reasons for this.
I’ll start the ball rolling with the obvious reason. Properties being put up for rent instead of on to the market. But is that enough of a reason to stall the growth in the inventory? I’m not so sure…
Other possibilities…?
-Capitulation. No market, why bother.
-Homes being purchased for social/affordable housing.
-Sellers using alternative websites to promote sales.
-Sellers opting for low cost private sales.
-Seasonal factors.
-Buyers stepping in to pick up ‘bargains’
Check back over the same period last year - I think there may be a seasonal effect. ‘Nobody’ buys a home over Christmas goes the spiel. It appears to have become gospel truth at this stage, so we are probably looking at February to see what is really happening.
BUT, the inventory did rise approaching Christmas over the past two years, so I’m not convinced. The surge in properties for rent definitely goes some way to explain the ‘shuddering halt’ in the inventory growth, but is there something else at play?
There have been a couple of “bollocks, nobody will pay what it’s worth, I’ll rent it instead and make a killing” points in the data going back the last two years. Maybe, with interest rates falling, we’ve stumbled into another one of them?
A ‘normal’ seasonal property inventory pattern would see a peak during the summer (around August/September or so) with inventory levels then declining during Autumn with a trough around December and then increasing again. So nationally the inventory build is still bucking the seasonal pattern, just not as strongly as before. I.e. If inventory was following a normal seasonal pattern you would have seen a significant decline in listings since the end of summer (not that we have one anymore in this godforsaken country).
Funnily enough Dublin was showing a somewhat normal seasonal pattern last year (listings peaked during the summer and then falling into winter) which is isn’t happening this year, so it is starting to look like Dublin is playing catch-up with the rest of the country.
We ‘might’ see a more normal seasonal pattern ocurr next year, if so then we might be able to start realistically talking about a bottom a year or two after that. We’ll have a better idea this time next year!
Also, it was mentioned earlier in the thread but rental listings are surging even more strongly than they did last year (up 10,000 since the start of the year ) so growing numbers of investors/developers are probably swicthing from trying to sell to trying to rent.
If you want “quality” analysis, perhaps you should commission the ESRI to do some socio-economic bolloxolgy on your behalf.
Meh, there are many factors at play. And who says the system behaves rationally? The emergence of macro-economic patterns is complicated and changes in the behaviour of individuals within the system can have unclear results. Trying to deduce micro-economic behaviour as a result of macro-economic data is a non-trivial task. Economic modeling gimps mulling over Java programs have forfeited many a dinner-date trying to ascertain and predict what’s really going in in the economy.
Such highly paid analysts ought to be able to provide better insight than some anonymous poster on thepropertypin.com
The fact is that daftwatch is only indicator data.
Falling sales inventory might be an indicator of a dawning realisation of the true state of the market.
*****Some of that vanishing sales inventory in Riverside may have ended up on the rental market, which has seen a fall in rental values over the past year. apartmentratings.com/rate/CA-Riverside-Pricing.html
So the Daftwatch chart has stopped rising because…? I can accept that the system/market is not always rational, and it is for exactly that reason that I would expect the pendulum to swing aggressively from greed to fear. And that fear has heightened hugely in the last few months. But where are the ‘for sale’ signs?
I was only being facetious earlier but the testy tone above and the phrase ‘emergence of macro-economic patterns’ suggests to me that cello point has an inkling we are near the bottom and he doesn’t like it.Then again maybe it’s just economic modeling gimps mulling over java programs. What do I know.
Good point, as time goes on more and more of those who don’t ‘have’ to give up on the market, leaving a higher and higher proportion of distressed sellers which accelerates the price falls. That said, we unlikely to see any year on year inventory drops for a while yet.
According to the ‘sale agreed’ search on Daft.ie, 28 properties went off the market over the last 14 days and 48 the previous 14 days. Not a great indicator of activity as very often the advert doesn’t get changed to ‘sale agreed’. It usually just gets removed.
Perhaps stock market investing experience can be applied to the housing market. Ever pick a stock/investment believing it was a safe bet. It wasn’t. It fell and fell and fell and fell, but you didn’t sell because you ‘knew’ the bottom was in? And you told yourself that you’re in for the long term. And it continued to fall.
I believe that a large portion of specuvestors are so amateur that they will sit on their loss until the bank forecloses on their ‘safe bet’.
Maybe the inventory has indeed topped for this reason…
Sorry, I don’t read anything into short term moves like the daft charts,yes the number up for sale has dropped off but it levelled out last October before taking off again in January,so maybe people are taking their properties off market as they cannot sell them and waiting to “see what happens in the New Year”?
The trouble is, if prices continue to fall they will panic and put their property back on the market,at a lower price,adding to the oversupply and thus forcing prices even lower.The psychology of house prices is no different to any other security or commodity,the old rules of fear and greed still drive markets and in bubbles the moves are amplified.Houses are unique in that they are extremely illiquid,there is no transparency of price(talking about Ireland here),the market is priced by estate agents not the owners,and governments, via interest rates interfere in the market.
If you look at the rentals graph you get a better sense of the “fear” element, as this is now almost going exponential(doubling in six months) people who cannot sell are trying to rent out.
Contrast this with the exponential move up in prices in the early part of the bubble.
) so growing numbers of investors/developers are probably swicthing from trying to sell to trying to rent.
