One of the greatest investors of all time, Warren Buffet famously said, “Be fearful when others are greedy, and greedy when others are fearful”. Another, Sir John Templeton said “Buy value, not market trends or the economic outlook”.
However, the UK housing market does seem to exhibit the ‘herd mentality’. People want to buy when they see other people trying to buy the same house, even if that means it will potentially cost them much more. Indeed, I can remember many occasions in my 25 year career when an interested party would wait for another buyer to offer before doing so themselves! But when one reads how many of the world’s most successful investors made their fortunes, one discovers that they never behaved this way. Instead they nearly always invested in a ‘contrarian’ or ‘value’ manner. That is to say, they would always look for value and never be following the herd, but more often than not going in the opposite direction.
House prices in Cornwall have been pretty static for a year or two, and the balance of supply against demand seems fairly even, with just slight changes in sentiment from time to time. However, one characteristic of the market is perhaps the lack of any urgency.
There is no obvious urgency to buy, perhaps due to the fact that prices aren’t going up at present. Go back a decade or more, and there was at times feverish competition between buyers, many of whom were forced to pay considerably over market values (at the time) to secure the property they wanted. Right now, there is much more choice for buyers, and less competition, but less urgency too.
But does that lack of urgency really make sense? Surely it is a better financial move - not to mention less stressful - to buy a house at a fair price without pressure from competing buyers, rather than have to pay an inflated price to secure it?
So once you have found the right property, seize the moment, and don’t wait until another buyer arrives on the scene. After all surely it’s better to be able to secure the property you want at a fair price, rather than wait for another buyer to arrive on the scene and push the eventual purchase price up.