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.

Wait what out though? That implies you think the economic/political/demographic situation will significantly improve. It is possible that this doesn't happen any time soon, if at all.

Don't know. They are realistic and might reduce again but in the end if that doesn't allow them to make the move they want to so they'd end up somewhere miserable then they might as well stay put.

My parents are 70+ and they only think in terms of booms and busts for property! I think anyone who lived through 80s interest rates believes that busts are followed by booms - and I just don't think that those rebounds are coming this time. And if they do, it won't be after a long period of stagnation.

It may rise with inflation but that is not a real rise, only a nominal one. Prior to the 80s and especially the 90s, house prices didn't rise in real terms. As I said, some people just compute that house prices may not boom again.

It’s really difficult.
I know people in their sixties who live in houses/ gardens that are far too big for them and too expensive to run, now that their children are grown and they are living on their pensions. But if they sell and buy a smaller house the stamp duty payable on the next house will wipe out the price differential. What is the point?

This is what I keep hearing "People are going to wait it out". Until when though? How long are people expecting to put their lives on hold. Are they going to carry on living miles from grandkids just because they want a bit more for their house?

Because the smaller house will be cheaper to run.

Yes, sure. But I also know of people who have waited it out for so long that they've actually died - and even those houses are sitting on the market because the heirs are being told they're worth a mad price. The whole situation is bonkers.

Tbf after the bust of the late 80s/early 90s prices didn't really start rising for about 6 or 7 years.

There isn't a housing shortage overall, only in some areas. The population is growing due to immigration but this is not the chief factor when it comes to house prices. Did half the population leave in 2008-12?
Lots of people said what you say about 'it will change in a couple of years' back in 2023. They said that rates would have fallen by 2025 and that prices would have started to rise again. As it is, we are 2026 and I think the falls are going to accelerate now. People can sit and wait but prices will probably be lower in nominal terms, never mind real by 2028.

Economically there will be another bust and boom.
It goes in cycles.

Yes in the same way that all things go up over time, food, petrol, utilities.
But we have been through a relative period of reasonable economic prosperity for many decades.
Yes there have been downturns, but the increase has been rather large shall we say in the way of housing cost for a considerable time.
The higher they go the harder they fall.
Look at the way things are going in this country.
A large retired section of the population which is increasing, vs those earning, added to which an ever increasing welfare state.
Salaries beside mortgage or rent are not keeping up with the inflation of other bills and food etc.
Unemployment is up and sadly I can only see it increasing.
There is no where to go for the money to come from for prices as they stand.

Exactly. It's not a sensible choice imo if there are many advantages to moving.
In any case, if they decide to wait 4 or 5 years, there is no guarantee that the price will be higher rather than lower. They may just lose a lot of money. Past performance is not a guarantee of future success, etc

For sure there are economic cycles. It doesn't follow that the paradigm of the last 40 years will continue infinitely. I think that's very unlikely, in fact.

It's usually forced sales that drive the drops. Divorce, probate, care home and so on, rather than people who have at least some option to sit it out. However, with mortgage lending tightening up this process might take longer than usual just because there are fewer sales than normal.

Won't happen til the boomer generation die off (I think 2032 is the general time frame quoted by mpst economists?)
Then lots of housing will come onto the market...of course, the inheritors could be greedy and refuse to market at a sensible price 🤷‍♀️
I'd love to move but SD and moving costs just don't make it worth it.

I think it will stagnate pretty much as is - nothing selling apart from the 3 'Ds' (Death/Divorce/Debt) until one of the political parties reduces / removes stamp duty.

SD isn't a huge amount for an average/smaller than average house in most areas. The figures are very high in London and the SE but then most older people have also made huge, unearned gains in those areas. Apart from the financial, there are other advantages to downsizing before you become very elderly too.

same here in the SE but here actually its unrealistic naive younger sellers causing the freeze. I'm currently helping my mother downsize, and she accepted an offer significantly under asking price (already the lower one of the 3 valuations) because she wants to move. And what we are finding is that there are lots of people sitting on 2 bedroom flats that they bought as first time buyers 2, 3 or 4 years ago for, say, 290K and they wont accept that they are now 300K at best, market rate, if not 285/290K. They have been conditioned, maybe by parentsor the fact its always been like that in their adult lifetimes, to think that you always make money on property. And at the moment on a download curve, correction whatever it is, property is worth less than it was a few years ago, particularly for lower value properties.

This has been made worse in the last few months by the new tenants rights legislation that Labour bought in as there is now an absolute glut of flats at the lower end of the market that is freezing everything because all but the most serious/commercial buy to let people are dumping their flats. Including everyone that inherited a flat from elderly relative that would normally have rented them out for a bit. My mother has choice of literally hundreds of flats that meet her needs in the commuter town we live in, with a realistic budget of 300K, but everyone is refusing to budge from £325+K becasue they all paid £300k a few years ago. And nobody wants to pay above market rate for a flat that their children will possibly have to sell on in quite a short time.

I think we will have to wait for distressed buyers to unfreeze it unfortunately, eg we've come across a couple of instances where the vendors are coming close to accepting a more realistic sale price as they are having to pay nursing home fees and management charges and need the sale proceeds to pay them. Divorces, people emigrating, having more children etc will eventually force sale through I guess. But is does all feel a bit wrong at the moment.

I feel you, OP. I’m in the SE and everything in my area seems to have ground to a halt. There are houses on Rightmove that were put on at overinflated prices last year and the year before, and in some cases the year before that, and most haven’t been reduced in that time. And the ones that have been reduced it’s literally £5k every 6 months, which on a property of almost a million is neither here nor there. The fact is that the owners need to drop the price by at least 10% and more in some cases.

The overinflation by estate agents is infuriating and is ultimately making their jobs even harder. Our house was valued at £415k in February. It was clear from looking at what else was on Rightmove that this was unrealistic and £370-380k was more realistic. We’ve recently accepted an offer for £375k (fingers crossed it all goes through ok) but we have nothing to move onto as the price bracket we’re looking at is massively overpriced and full of bodged houses that need a huge amount of money spent on them. We’re now most likely going to have to move into a family member’s rental properly (the current tenants are leaving in August as they are downsizing) whilst we look for a new house. My dh is very relaxed about the whole thing as he’s very experienced within the property market but I
am feeling a growing sense of dread about how long we are going to be living in limbo.

We might have a growing population but the numbers that count are those that are working and that figure is decreasing.
Meanwhile the figure for those who will never be in a position to buy is increasing.
Added to which salary increases for those in work have not kept up with house price increases.
Those that are sitting tight ie buyers with fear of job insecurity, interest rates and negative equity, quite rightly they are not buying as they can see the way the economy is going, they are still not going to be in a position to pay the inflated cost of housing if they were feeling more hopeful on such matters.
I’m glad you are hopeful that things will improve in a couple of years, myself I sense that the economy is going to go further down the pan and that means only one thing for house prices.

I think it depends where you are - by me (SE Wales) houses that are anything like a reasonable price are going within the first day of viewing, often over asking. The last one I offered on there were 6 separate final offers, all well over the original asking price. I've offered asking or above on 5 different properties in the last month and have been refused all of them either because others have offered more or are cash/first time buyers and the sellers have had so many offers they can be picky!

Those that are significantly overpriced are loitering for months with no reductions though, so that's similar.

Theres just me & my husband in a 4 bed detached, all kids gone,
We would love to downsize, nothings budging here (SE) we would love a bungalow, few available here & are on the market for the same price as our 4 bed would be worth, and what houses are available isn’t worth it with stamp duty & all associated costs, so we are stuck.

There will be another boom once we have a change of government but until then I think prices will drop further as the economy continues to decline and taxes on homes are increased.

Let's hope we have a change of leadership soon.

I found 'moving home with Charlie' interesting on this subject. It's available as a podcast
https://www.podbean.com/pa/dir-85msv-29b05c
He's also on YouTube.