Just some thoughts here in regard to the rate of change of price drops.
OK, the number of price drops recorded during the last week is down significantly from the previous week.
I believe that this last week (i.e. 1st to 8th June 2008) has been the first full week of the Leaving/Junior Certificate examinations.
Next week is the Lisbon Treaty.
Due to the examinations still occurring and due to the Lisbon Treaty a certain percentage of potential buyers may not have the ability or willingness to notice the price drops in this falling market.
Price drops are a convenient way for the EAs to revive interest in properties that are failing to sell at the currently generally exhorbitant prices for so many of them (in my honest opinion).
In my opinion, it is possible that price drops will be held until 2 weeks from now, post Lisbon and Post Leaving/Junior Cert examinations. People will want to chew on something and the EAs will give them the price drops that they are lookiing for at that stage.
Whatever buyers are out there are then more likely to be stimulated at least towards an interest in selling/buying if not actually closing a sale. I’m not really sure but I believe that this will be a possibility.
Furthermore, I expect to see a spike in price drops during one of the the weeks pre-ceeding the August Bank Holiday. I believe this to be the last worthwhile opportunity before the end of the selling season to add some impetutus to what is currently the worst year in more than a decade for housing related transactions.
I will be intrested to re-visit these comments at both of these times (i.e. two weeks from now & before the August Bank Holiday) to validate them.
Its fun to theorise on this fluctuations; not always productive, but interesting.
I think we’ve hit one those ‘inflection points’ which make statistics interesting*
I think we might now see a division in the vendors between those who think that is just down to a bad Spring buying season & those who actually see that the market has changed fundamentally. The difference will be that one group is prepared to sit it out or maybe even withdraw their property until the next buying season; and the other group will go balls-to-the-wall to secure a buyer, probably cutting prices repeatedly.
Sellers, you must be priced correctly for your market conditions, or simply stated, you won’t be making your move. It’s not good enough being “on the market”. You must be “in the market” to make your sale and move.
It will be interesting to see how the market reacts to the latest ECB news. Due to the bunch of economic forecasting fools in ireland, most people were of the opinion that things were going to get better re interest rates, and thus ease mortgage repayments and increase affordability for buyers. Now its clear that the ECB still mean business and aren’t going to sleep while inflation rises. Possibly we will see a increased run to market and a spike in price drops because of this.
Good man GreenBear, a picture is worth a thousand words
A quarter point increase is the equivalent of a €15k price increase isn’t it ?
It seems to me that the buyers still haven’t priced in the interest rate rises by the banks so far, let alone a probably increase by the ECB next month. So far the herd is still way behind where it needs to be to secure a buyer
I was more commenting on the herd psychology of the seller rather than the buyer there. But yes you’re right, both groups are way behind the curve, but its always interesting to see what are the actual triggers for tipping points between the different levels within a system. Stamp duty was one such tipping point last year, even though it shouldn’t really have been.
As promised, I’m revisiting the above commentary.
I do think that the number of price drops and percentage change did indeed rise again, as I predicted , post Lisbon and post (the bulk of) the Leaving Certificate exams being over. This can be seen at treesdontgrowtothesky.com/ where the week of the 14th June shows a large number of drops, each of those eagerly vying for the attention of the (NOT) buying masses!
I’m waiting for the August effect but I do still believe that we will get further significant price drops at this time.
One interesting thing today that I noticed was that the property section of The Examiner was down to 24 pages, well back from the 72 pages that they used to be having at this time last year. I’m just waiting slowly to see when or if that they will integrate the property section either as part of the Weekend pull out, or, make it part of the main newspaper. That would be a clear and ultimate end in my view of the Denial phase.