37 comments on UK House Sellers In Denial About The Property Crisis - Energy Too?
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37 comments on UK House Sellers In Denial About The Property Crisis - Energy Too?
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I am not surprised that the fall in asking prices is lagging the fall in selling prices. There are a number of factors for this.
One is that with prices rising, selling prices were tending to be only marginally below, if at all below, the asking price, hence pushing up prices. Now that they are falling, that gap is widening. Ultimately, what people ask for does not matter, the issue is more how they react when they don't get it.
Which leads on to the next point. For most people, their house is their only "investment". They therefore want/expect the price to go up. But the extra complication is that in most cases, their house is also their home. They therefore get emotionally attached, so find it harder to accept reality. This will always act as a drag on falling house prices.
As for your main point, unfortunately you are right. For example the world has been aware of the potential impact of Global Warming, and most people in the west are aware of it, but most do little about it, if anything, unless prodded (eg by their council collecting recycling). It is a case of "someone should do something" without appreciating that someone is all of us. The reaction to recent high energy prices is a perfect example of this. Rather than dealing with the underlying issues, ie using less, they moan and demand that the government tax the energy companies so that their bills will be subsidised.
Re Global Warming, I am pleased to say that the Conservative Party (our main opposition party and probably government in waiting) have made public plans to ditch a third runway at London Heathrow in favour of a TGV-style high-speed rail network linking London, Birmingham, Manchester and Leeds. I am hopeful this could mark a turning point in the UK.
We should be congratulating and encouraging them in this. Who knows, this could even be extended to that strange land north of Leeds where Eunan lives.
I thought this was excptionally good news. Made me think that Zac Goldsmith, former editor of the Ecologist, now senior activist within the Conservative party and who understands peak oil very well, has successfully got the Peak Oil message thro to the top members of the Tory party. Presumably they still think they cannot talk about Peak Oil openly, but they can come up with sensible policies and use climate change / the financial crises as a substitute excuse. Unfortunately, the Tories are now taking a right kicking from all angles for their anti-new runway at Heathrow policy. Corporate unease over shift in Tory rhetoric:
Seems to me like now would be a pretty good time for the Tories spell out the Peak Oil problem clearly so no-one is any doubt.
The psychology behind people's reluctance to lower asking price is called prospect theory. The problem is that homeowners view selling at below what they expected as a loss to be avoided, and not as a failure to gain what was arguably an unsustainable high price overinflated by property developer manipulation.
Don't ask me where I've read it, but I'd been led to believe that this is standard behavior when a housing bubble in particular bursts: Actual declines may not be severe, but many owners choose simply to hold the house (on the market or off it) until inflation allows them to claim a nominal gain. This sustains the crisis by adding to supplies, and so the length of the housing correction tends to be proportional to the depth. Meanwhile, the home-building industry contracts to a tiny fraction (in the Great Depression 1/9) of its former size.