In terms of job popularity, Estate agents probably rank a little lower than parking attendants and perhaps a little above the bailiffs. Estate agents have been criticised for many things, not least talking up a housing bubble, which is now unwinding. Given that they arguably sowed the seeds of their own demise, they will probably expect little in the way of sympathy.
However, I think it is rather inaccurate to blame estate agents for the housing boom. Contrary to what people may fervently believe, estate agents don’t set market prices. They may offer false predictions like ‘house prices will never fall’ ‘Now, is really the best time to buy‘ (seen in local estate agent: July 2008 - btw: now is absolutely not the best time to buy) But, we can’t really blame them for the rapid expanse in risky, self certification mortgage lending and booming house prices. Blaming estate agents for rising house prices, is not entirely dissimilar to blaming petrol stations for the rising price of petrol.
Nevertheless, the alarming decline of the housing market, leaves many estate agents facing bankruptcy, as housing purchases decline to their lowest levels for decades. In the boom years, it was easy for estate agents to make profit. Commissions increased nicely, as house prices went through the roof. The current housing market, has turned the situation on its head. Estate agents now have to contend with
- Falling house prices leading to lower commissions
- Falling transactions. Demand has dried up, as people either can’t get a mortgage or are put off by falling house prices.
- Having to persuade sellers that they can’t stick to valuations of house prices from July 2007.
Estate agents may have offered false hopes for permanently rising prices, but, they were not alone in making such predictions.
2 comments ↓
I dont blame estate agents, I blame the media they talked the market up now they are talking it down. It seems we all act on what we read in the papers. The trouble with talking the housing market down is that the housing market has a huge effect on the economy. Consumer confidence is now so low its not just estate agents that are losing their jobs but people in all sectors even normally safe jobs in the public sector will be at risk as government have to cut back in certain areas to bail out banks. So be carfull what you wish for!!!
I blame American banks. The only toxic mortgages were the US equivalent of our “Subprime Self Certs”. Not 100% mortgages, not Northern Rock Together, not Buy to Let.
Yes Estate Agents play their little games but they couldn’t hve managed anything on the scales of the global events we’ve witnessed.
Leave a Comment