In a world that lives with social media and consumes bitesize chunks of information faster and in larger quantities than a whale eating krill, it’s still hard to miss talk of declining home sales but, in truth, what is the real prognosis for the property market post Covid-19?
Life is overtaken by talk of Corona Virus. Have you had a conversation recently that hasn’t referenced it in some way? There are a huge number of very sad stories out there, some reported, many more not. Small personal tales that don’t cause a ripple upon the news pond but, to the individuals involved, are devastating pass by the general awareness; something that always happens, every day of every year.
Hindsight is a wonderful thing; predicting the future is uncertain and precarious and yet people are driven to predict, sometimes helpfully and often irresponsibly.
My world is that of property, of selling people’s homes, my life is driven by it, affected by it and so is my future. What does the future hold for me and all of us who have or want to own a home?
Follow property news and, outside of agents’ battles with Rightmove and Zoopla, there is much talk of what the property market will look like post Corona Virus. Individuals predict everything from a twenty percent drop in values to a market that will quickly recover and continue to rise. How can people predict this and which outlook is correct?
In 2018, in England and Wales, an average of 1480 people died each day, not a nice statistic but fact according to the Office of National Statistics. In March 2018 there were 51,131 deaths, an average of 1,649 per day for the month. Time will show us the true effect of Covid-19, we know we are not out of the woods yet and much is yet to be done, but there will be a point where we can assess the true impact, how many increased deaths? What impact on the year overall? Amongst the figures will be some whose passing was hastened, there will be some who have lost their lives who perhaps shouldn’t, for whom life was cut unexpectedly too short. All loses will cause sadness and grief. We cannot predict the impact yet because we do not have all the data.
What of the property market then?
My point simply is this: There is no benefit to trying to predict the future when you cannot quantify data, cannot produce facts and have nothing to truly reference against.
We are living within a unique moment; but it is a moment!
When you can show how long lockdown has lasted for;
When you can show the effect of government bail outs for the economy;
When you can show how many people have retained their jobs;
When you can show how much people continue to spend;
When you can show the impact upon the world economy;
When you can show that people are returning to a form of normal life;
When you can show we have a solution for Covid-19;
When you can show what will happen when the successor to Covid-19 rears its head;
When all of the above can be answered (and there are many other questions to add); you still will not accurately predict what will happen to the property market.
In thirty five years of working within the property industry, I have never known anyone get it right, yes, vague statements like; prices will go up and prices will fall can be touted as predictions, but how much use are they?
To paraphrase a well-known saying: ‘If you laid all the property analysts end to end, they still wouldn’t reach an accurate prediction’.
In the past I have listened to people from the Bank of England talk about the future economy and, with all the data they must have and all the clever minds and analyses they apply, they get it spectacularly wrong.
Why is it so hard? It is hard because at the core of what will happen to property in the future, the most important data is unquantifiable because property is about people and people have emotions. Emotion drives the property market, confidence drives it and we are like a murmuration of starlings, we move in unimaginable ways creating patterns, ones we love to talk about and watch, but we never truly understand.
Tough times are ahead for the property industry. If lockdown carries on for any length of time then, for sales agents, it will be like starting a new business, once lockdown is lifted. A new sales ‘office’ really only sees income properly come in after six months so, for many businesses out there, the hard part isn’t truly during this Covid-19 crisis, the crises for estate agents starts later on. That is a problem for the industry and business, not the property market.
Are tough times ahead for the property market?
Possibly. It is far too soon to say. This is a scenario I, nor anyone else have experienced before. What will happen remains to be seen.
What I do know is that life goes on. The property market has seen strange and challenging times before Covid-19; pandemics, world wars, banking crises and it has continued, it has risen and fallen and risen and fallen and risen. The big difference today is communication, the flood of data, the cackle of people trying to be noticed, to be heard and the lack of quality control upon the information put out. I often talk about a seventy two hour news cycle. A panic on Monday is forgotten by Wednesday as new stories take over. Yes of course this goes beyond that, but the news we read often drives our actions without being challenged.
I do believe the property market will be impacted by Covid-19. I do believe the patterns I have observed in the last thirty five years will be put out of sync this year and I do believe people will continue to move and buy homes.
I can’t make a true prediction for you and I urge you to question any and all predictions you read, usually, behind them, somewhere there is a ‘buy from me’ driven point of view or purpose. Remember the phrase ‘self fulfilling prophecy’ and also remember the words of Epictetus, written nearly two thousand years ago: ‘People are disturbed not by things , but by the views they take of them’.
Please do read up on the market, but most of all question everything you read as you should question the content of this article.
One day we will look back with the answers to hand, till then, I wish you well and say: Stay safe!