Price reductions - how people's minds work?

You would think a lot of sellers are confusing their houses with cans of baked beans, what with all the 1% or so price drops around.

I just can’t fathom how someone would think that, say, €450k is failing to draw the buyers, but €445k will surely have them queueing around the block.

I presume, it’s the charge them €1.99 as opposed to €2 idea…

Or more appropriately, €199 as opposed to €200…

The vast majority of price drops, I would presume are aimed at attracting a different tier of buyers who were previously eyeing a range of prices and wouldn’t have come across that property previously…

Of course, some drops are simply ridiculous.

We’ve seen 50 squid knocked off some…

I asked this the other day on the Price Drop forum, when 5k was knocked off some apartment in Royal Canal Park. I asked would an EA really recommend this small of a drop?

It seems to assume that potential buyers don’t make offers at all. They either agree to the price or they don’t. Which obviously is ridiculous, but then this falling market is new to many.

I sld my last house around 12 months ago (UK) We needed to drop our price and the agent was very clear in his advice. If you are to drop the price it has to be of an order large enough to bring a new cohort of potential buyers within you field. Anything less than 5% is unlikely to do that.

In the past it wouldn’t have made much sense but with web searches it can make perfect sense.

I have saved searches on daft which look for property in a particular price range. I never see properties which are 1 cent over the upper boundary. Admittedly I’ve allowed for a buffer in my search criteria but it does show that even a 1 Euro drop could increase the exposure of your property advertisement.

Surely €449,999 is the logical price to drop to then?

As someone just now looking for accomodation (fingers crossed all sorted tomorow), I looked at renting and buying.

I can rent a big two bed penthouse right beside the Dart around Grand Canal Dock station (less that 20 minutes to work from kitchen table to desk.

Alternatively I can buy a small one bed in the same area for about twice the monthly outlay.

Or I could live in Gorey or somewhere similar and spend hours commuting.

Now, for me to be tempted into buying the sellers have to make a similar place available for a similar price. I’ll pay a little more to own, but I’m not going to pay twice or three times the amount.

I think this just hasn’t sunk in yet with sellers.

It comes back to the point I’ve made before that the “It’s only worth argument” works both ways.

If a seller refuses to sell a house for less than 450K then that’s what it’ll cost to buy it. It’s WORTH that much to them. It may be unrealistic, it may even be stupid, but as long as collective stupidity reigns then prices aren’t going to fall as fast as “Rational” pinsters think they will.

But sure who cares? Just keep renting the ever increasing number of apartments and banking the change. There’s no rush to buy is there?

-Rd

In the Irish psyche, yes! :slight_smile:

Blasphemer!

The ladder waits for no man.

Spot on, crashers.

However, there’s usually one partner in any typical relationship that is far less generous with the affectionate favours if they don’t quit renting right now and move into somewhere that said partner can redecorate into something stylishly lower-middle-class.

:laughing: White leather anyone?

I have to say I think the market is still stuck in greed. My evidence:

  • low rate of decline of asking price
  • anecdotal evidence of EAs not passing on very low offers to vendors (haven’t they read Freakonomics?)
  • vested interests not trying to get it over with (if the VIs weren’t blinded by greed, they’d be heading to the bottom as quickly as possible, so they could start on an upward spiral)
  • the “I wouldn’t invest in Ireland, and Hungary is dog at the moment, but there are marvellous opportunities for capital appreciation in Germany” crowd. Or leaseback. Or any of the other scams auto320 used to debunk so neatly.

Ya see, but the thing is, that what it is right is that you don’t want to be the you know, the paddy the last one that caught at the bottom, on the way down you don’t want to be last… right :frowning:

no one wants to be

PADDY LAST

So I’d be dropping my prices pretty fast to get the feck off deck! Icebergs should be looking real cosy right about now :open_mouth: anyone one for the last few choc ices…

Thinking about the OPs question, it could be to do with ranking on a property website after all.

If you have a search of three bedroom houses in a particular area ranked by price (cheapest first, of course), you want your house to appear as high in that list as possible. Therefore, it is worth your while to reduce your price to slightly below your neighbours (or even the other similar three bed in another street). The reason is that most people will stop looking after the first page (80% only look that far) or the second page (a further 16% stop there). (Based on some Google stuff I heard a few years ago and experience airline reservation systems!).

Yoganmahew, could this be the race to the bottom in another guise?

Once a few competing sellers realise this trick, strategic jostling for sort order would accelerate towards the real drops the sellers are willing to incur.

Forget having a Utopian American society, our generation is doomed generation, I have officially given up on this dammed country. I was listening to Brendan on the radio stuck on my 2 hr commute home. I finally get it, the penny has dropped in my head. We are never going to get a fair deal for property here. These jackals intend to screw our generation with every ounce of twisted bull crap. Brendan said buying a property is what the average 25 year can hope for, that’s a 25 year olds future pension, sell it when your old and hope it will see you through to your grave and leave nothing for your kids(forget paying into a pension in the private sector). I almost kicked the over priced radio in my car. This smug NIMBY is happy for our generation to suffer for his generation’s creature comforts and greed. They have this sense of entitlement to talk down to the rest of society.
We have NO people in power to champion our cause. Who are they?? We are faced with the likes of Berties and Haughy’s deciding our faith. We are not going to win this battle. There are too many sheep int his country. Just look at the FAI, that for me represents Irish society. It is so corrupt and self pocket lining and has no prospects but to make the FAI board richer and richer at the expense of Irish football. Everyone knows what needs to be done after tonights shambles and nothing will be done. Despite peoples objections, people are toothless and not enough countenance.

Everyone tell us how well Ireland has done over the last 15 years. I say, eat grass moron. When I was a kid, my family had a car, my mum stayed at home to bring us up(by choice), my dad paid the 25 year mortgage by himself. We went on holidays around Ireland and he still managed to buy us kids a Sega master system and look after his family. He was a bus conductor.
Today my partner and I have masters degrees with good jobs, work long hours, have a shitty sized apartment with prospects of both of us working the best part of our lives of a place half the size of my parents house. We have twice the journey times and we go to Spain for holidays. Irish kids will have no idea what Ireland is like in the very near future, but only how to order a diet coke in Spanish.
When I was younger, everyone spoke english down the pub, Temple bar is where you saw people from you old secondary school …and most importantly , we had a good football team. I think most people reading all the articles ultimately hope to own a 3 bed semi detached that they bought themselves with a 25 year mortgage right? Well, we had that and we lost it. Welcome to reality.

TUG - Looks like your football-linked theory on the rise of mass disillusionment was on the money :wink:

Check out this one

**TomTum wrote: **

I feel your frustation too…and I told my GF the other day that for us it’s the same, degrees, good jobs - living in student accomodation…and I think your completely on the spot with your rant.

There is a generation trying to keep this madness going for as long as they can…I still have an inkling of hope that they’re going to run out of breath (most of them are passed their prime, you know :wink: )…I hear people of that generation say “oh, it’ll pick up again…”…I’d have to see…I think we’re seeing the economic game changing and it is only natural for those who have something to lose to fight it. deny it. I think we’re in the denial phase…

If Ireland decides to stay there, i’ll leave…Patience, though, TomTum! It’s silly where we are and considering the amount of people that still say " that’s just the way it is, dah"…we have a long rough road ahead.

But the worst thing is the reverse psychology.
People who are trying to get a house for a family, trying to get a stable environment, a place to call home - all of them and more - BEGRUDGERS.
It is in fact the politicians and VI who begrudge people like this.

We should realise we are every bit as bad US and bush re-election when we do the same here. Many peole actually say Bertie etc DESERVE a backhander, and applaud when he gruffly rounds on the begrudgers.

We (some anyway) have a slave mentality.
A pal of mind muttered that “whingers dragging down the economy” drivel to me a few weeks ago. He couldn’t explain how they dragged down the american economy, or the banks.

Our government blames the little man all the time.
They done nothing to create a stable housing market. The “housing market” is probably the single biggest barrier to our competitiveness here. We have civil servants getting rampant wage increases when most others get SFA. Now we hear politicians are overcharging massively for travel allowance / mileage. When is this going to end? NEVER.

I think this is most unfair on an older generation who worked hard in the rotten times of this country for their houses. None of that generation that I am related to have moved house in the last ten years. None of them have cashed in and bought investment properties. Many are still paying off their mortgages, which although small by modern standards, seemed huge when top tax rates were in the seventy percents. Only one of them has bought an overseas property (a small apartment in Spain, that they use for holidays a good few times a year) that I know of.

This is a generation that pays its bills at the end of each month and is still grateful to have a job.

You should be looking elsewhere than the generational blame game to find the culprits for the huge expansion of credit and the lowering of financial risk standards that allowed the massive expansion of credit available to purchase poorly designed city centre accommodation at the expense of decentralised growth across the country leading to a massive speculative bubble that no-one was forced to sign up to. Add to this the media cheer-leading the BTL (or indeed Buy To Not Let) specuvestors. Add salesmen lying through their teeth to pump prices even further with cries of ladder and last chance.

Now look at the age profile of these media pundits, salesmen, leading economists. They are not old, they are not the generation above. They are our generation. We are being stiffed by our own age group.