When I say that there is an awful lot of balls talked about the property market, I am of course referring to the crystal balls that bejewel the desks of property pundits everywhere, allowing them to make sweeping forecasts about the housing market to come.
The desire to shine light on events yet to come in an unpredictable world is of course entirely understandable and no doubt a millennia or so ago, wise sages were sought out who could predict whether the prices of caves would rise or fall and whether now was a good time to invest in an extra primordial forest to increase oneâ€™s properties value, but it is a perilous undertaking as the events that rock the property world tend to A) come from far outside the property market itself and B) tend to come out of a clear blue sky.Â
The biggest (pre-pandemic) upheaval in recent memory was of course the banking crisis of late 2007 when events on the other side of the Atlantic (in essence the crashing down of a house of cards type structure built of unsupportable loans given to anyone regardless of their income) caused a mortgage drought so severe that property transaction levels dropped to their lowest number in recorded history and estate agents were burning their office chairs just to keep warm, and this blindsiding event came seemingly from nowhere to strike a property market that was flying and an economy in the UK that was enjoying a long and uncharacteristic period of stability.Â
At that time, I managed an estate agency branch in West Somerset and can recall with frightening clarity how the phones were ringing off the hook one day and the next, after photos appeared in the papers of people queueing outside branches of Northern Rock to withdraw their money, there was a deadly silence. It was as if a tap had simply been turned off and enquiries completely evaporated overnight.Â
So, being wise folks and knowing that we never learn the lessons of history, what can we learn from the above? Well, as far as the property market is concerned, the biggest lesson to be drawn from the past is to worry less about market movements over the medium to long term and look at the market that we are dealing with today, or as property guru Nick Churton calls it, â€˜predicting the presentâ€™, an approach that has a lot to commend it.Â
If we follow this sage advice and â€˜predict the presentâ€™ here in North Devon, what do we find? We find a market which is still incredibly skewed in terms of the balance between demand (being extremely high) and supply (being extremely low) and this differential means that prices remain strong and are likely, unexpected global catastrophes allowing, to still show some growth. That said, like the thin strip of grey light on the horizon that is the precursor of night turning slowly into day, I do seem to detect the first signs of a degree of normality returning at the moment, with some properties reducing very ambitious asking prices to something more closely resembling their actual market value, a sign that although home buyers in North Devon are willing to still pay a premium for a good property, they are less inclined to buy at ANY price, which can only be a good thing for the stability of the market.Â
As well as stabilizing the market, another benefit of a change from a frenzied market to a good old fashioned busy market is that it makes life easier for those sellers who are buying on locally to find a property and complete their chains.Â
So, my prediction for the present? As Theresa May was fond of saying, â€˜Strong and Stableâ€™ â€“ and we shouldnâ€™t be burning the office chairs to keep warm, at least for a while.
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