8
May
REASONS TO BE CHEERFUL - PARTS ONE TO EIGHT
In the depths of depression it is often hard to find reasons to
be cheerful – especially in the property market. Prices
dropping, nothing selling, precious few buyers - all these factors
combine to deflate enthusiasm and erode confidence.
But this is all part of an established pattern. We have all been
through these ups and downs before and are experienced enough to
know that these recessions are cyclical and generally follow an
eight-stage format.
The first stage is optimism, the period when people get excited
about buying a home. When the market is so strong property
increases quickly in value, and this heralds the second stage
– fever pitch. Sadly it is this gold rush excitement that
leads people to make rash and sometimes unwise decisions and it is
these that lead to a downward cycle. At first nobody wants to
believe that the bubble has burst and go to stage three, denial,
not believing that their own property can lose value even when all
others are.
Then comes fear, as prices continue to slide, followed by panic
then stage six, resignation. Finally acceptance leads to hope and
from hope we are back to optimism. And so the property market
lifecycle is complete.
Right now we have gone through stages one to five. We are
probably now hovering between resignation and acceptance. But this
is not as bad as it may sound. It is actually a good moment. When
the market is at fever pitch it is a time of minimum opportunity
and maximum risk. Conversely when the market is between resignation
and acceptance it is the time for minimum risk and maximum
opportunity.
So now is clearly a time to think very positively indeed about
buying a property. This is probably one of those periods in life
that many people will look back on and say, ‘I wish I had
bought in 2009’! The strongest property market advice we can
give is – don’t be one of them.