What if there just isn't another property boom coming? Everything frozen where I am

[livelaughlambada]

I know it's not possible, but I sort of wish all house sellers would collectively agree to knock 10% (or whatever it would take) off their asking price. It feels like loads of people know their houses aren't worth what they're asking, but won't drop because the house they want won't drop either. Feels like the whole market where we are (south west) has frozen solid. Also round us, there are SO many older people trying to downsize who've been told that their houses are worth X when there just aren't that many people with X to spend! And lots of these houses have been on for a year, and in some cases you can see the deteriorations, but they just won't accept the prices have dropped. I do think it's really interesting in that the 65+ generation have seen so many booms and busts that I don't think they can process that there may not be another boom coming -- as in I just don't think there are enough 30 and 40 something with X to spend. It all just feels a bit weird right now.

There will be another boom, it’s just that the current boom is tapering off and we are overdue for another bust.

The property market has been overheated for way too long long and substantial drops in prices would help resolve the housing crisis. But people have mortgages at those inflated prices and negative equity, which we had in the 90s, is a massive risk for so many who are already stretched to the limit. Housing costs - both rent and mortgage - take up too much disposable income and hamper economic growth. There is no easy solution that doesn’t cause huge economic pain for millions.

I genuinely don't see how there can be another boom though? Unless there is massive quantitative easing again and rock bottom interest rates again - and I just don't see that happening. Either way, for all the downsizers, that boom is at least three years away.

I've been thinking prices would fall for ages

Clearly, no one agrees, because there's a couple of people trying to sell in my block of flats and a couple of people trying to sell houses in the road my mum lives on

They have ALL said that they are not willing to reduce their price in spite of the property sitting on the market for ages

In fact, they've turned down a couple of offers for being too low.

Someone else said to me that it's going to be hard on the first person who sells for a lower price in my block, because other people will complain it will impact their prices

But honestly, it's ridiculous. People can't expect prices to go up forever. I suppose it will be the same in any local area, eventually it will be tipped by the person who absolutely has to move because they're moving to another part of the country for a job or something. That's the kind of person who will
eventually have to accept a lower offer.

it feels like people were expecting interest rates to go down forever and house prices to go up forever and frankly, I don't get it. Even if we leave the current government out of things, that kind of theory doesn't make sense.

The boom to bust cycle is much longer than 3 yrs.
UK has been booming since 2014, and got very overheated during Covid.
The flat-lining is sign we are in for a correction, bounce or bust.

The government’s actions or inactions will influence which we are in for.

Yes, this is what I've noticed round me. There are more and more nice family homes going on the market and literally none of them are selling. But surely at some point, some of them will have to sell. If everyone can ride it out, fine. But when do we actually expect a rebound. One of my mother's friends is stuck in a house that just makes no sense to her anymore (ill husband) but - to be fair to her - the prices asked for the bungalows are so mad that I can see why she can't do the move. But equally, really miserable staying put.

I think everyone accepts that the three options are flat-lining, boom or bust!

it feels like people were expecting interest rates to go down forever and house prices to go up forever and frankly, I don't get it

It does feel that way and I also don’t get it. The people I talk to who usually express this kind of disbelief are usually aged 65+ or aged 30-45. So either have seen busts as temporary setbacks within a ginormous boom over their life or were children during the last bust/crash so were largely insulated from the effects.

Hmm, correction and bounce are different options to those three.

@livelaughlambada it's interesting that you've got the same because often the property market kind of runs in little pockets - very area specific.

I belong to a local business networking thing and we were discussing it there. And one guy said "well a lot of people don't want to buy or reduce their price, they're just waiting" and I said "what do you think they are waiting for?" And he said "I don't think even they know". It's really strange. Like you say, it's frozen.

I do understand that horrible sense of waiting for something to happen, but unfortunately, I think things are going to get worse economically before they get better.

but then lots of people will benefit from a reduction in prices so it is swings and roundabouts.

.

Of course there will be? Even if the graph line goes up or down slightly, over time it just goes up.

That’s the way it goes. Up.

With a housing shortage and a growing population, there will always be another boom. A lot of people are sitting tight now, due to job insecurity, interest rates and negative equity because of falling prices, but give it a couple of years, and things will change.

I'm old and on the point of paying off my mortgage. I'd planned to downsize but stamp duty makes it uneconomic, so I'll sit tight for a while and see what happens.

The very extended boom does make a lot of people believe that property process never go down. I'm feeling more certain than I ever have that house prices are going to crash in a big way, and it's going to be painful.

But I've thought prices would lower before (probably for the last 25 years) and been wrong!

My MiL is this demographic. She needs to downsize but won't sell unless she get a huge inflated figure FiL swore the house was worth before he died. The 1970s house with the 90s kitchen and weirdest layout I've ever seen.
Ultimately demographics are against them. They are the largest age group, wages for working age people are static and cost of houses in most of the country has outpaced earnings significantly. A boom in house prices is unlikely as who can buy?

I guess most of us never foresaw just how much kitchen sink was going to be thrown at preventing a bust. However, those cards have been played and aren't available at the moment.

I get the impression some people think if and when things calm down with Iran everything will go back to normal. But prices were mostly flatlining in the months before anyway, which given the rate of inflation was like a drop.

Yes, especially to the kitchen sink analogy. The UK property market has been artificially propped up for years and those MTG cards have been played and aren’t available to be reused.

(Magic the Gathering)

My FIL is in this position. He lives alone in a 4 bed detached in the SE. He’d love a bungalow but quite set on his ways that 100% has to be detached (fair enough). Current house worth about 600k. All the detached bungalows (even 2-3 beds) are selling for at least 500-550k. Some need a lot of work which he’s not willing or able to do at his age. So with high cost and moving/ legal feels he’d actually be worse off plus there’s the huge upheaval and stress. I think more bungalows need to be built (so that there is more available thus less demand) to encourage and facilitate older people to downsize.

I’ve just taken a property off the market. I did reduce it quite significantly from the original valuation but I don’t want to take a further hit and I can wait it out. We are living in extraordinary times with higher interest rates and the COL increases and now the war in Iran that has shot fuel prices up which will raise the COL even further and people are feeling insecure. I have always done well when selling but this time have found another resource to free up some funds so can wait. I do feel bad for those who are stuck but housing prices are cyclical.

I really hope that prices continue to drop and that sellers accept that. Young people are being priced out of the market.

Houses are overpriced relative to most people's ability to pay for them, so a correction is overdue. Unfortunately, this cannot be achieved without pain.

I agree with most of this @livelaughlambada, particularly this:
'Also round us, there are SO many older people trying to downsize who've been told that their houses are worth X when there just aren't that many people with X to spend!'
and this:
'I do think it's really interesting in that the 65+ generation have seen so many booms and busts that I don't think they can process that there may not be another boom coming'

I don't think the majority in this age group don't seem to be able to process this because they haven't really seen a lot of busts. House prices have risen considerably over the great majority of their lifetimes, all their adult lifetimes. They therefore seem to take it for granted that it will continue. The thing is, before the financialisation of the economy, deregulation, etc, house prices only rose in line with inflation.
Now, we have a poor and worsening economy and various other pressures plus the major demographic problems that the OP and others have mentioned. Who are all these younger people who will be buying all the older people's expensive homes? They don't exist!

My parents have been on and off and on the market again over the last 10 months. They have reduced twice and now on at 80% of their original price. Still not had a single viewer. There's no point them dropping further as then they can't make the move nearer us they want to.

It's painful all round.

I think it is likely - but it's going to be painfully slow, because the 65+ group have seen so many bounces - they just can't believe one isn't coming for when they want to step off the merrygoround. But I really really don't see who is ever going to be able to pay the prices. There are PPs on this saying house prices always go up, and I am sure they will, but I genuinely think it could be YEARS and in the meantime, inflation means that price rise is meaningless really.

At what point do you think they just accept it's not worth what they want/need for it? Do you think they just stay in the wrong place forever?

I feel like the least bad option would be a sustained stagnation of the market, but I think we do need a lot more building to facilitate that.