It’s affordablehousingaction.org’s decision to call the following news story ‘a modest proposal.’
That’s partly because the word ‘modest’ pops up in the article here and there, as in: “Industry analysts see a modest decline in rents over the next year.”
And it is partly because we predict ‘industry analysts’ will themselves be modest. Not for them, a la Chicken Little, to race around the barnyard screeching, “Rents are falling! Rents are falling!”
That’s because a healthy private housing industry depends on rents and housing prices climbing either forever, or until eternity (whichever comes first). So we can only ever expect a very modest price-fall prediction from industry analysts (a.k.a. industry boosters). Often, the word ‘fall’ does not appear at all, but is couched as a ‘market adjustment.’
Alas, the cruel fact remains that the marketplace theory of ‘supply and demand’ has been accurate so often since the 18th century in its explanation of market trends. As a result, it is often called a ‘law’. And this ‘law of supply and demand’ does not at all support the notion of housing and rental prices rising forever into the stratosphere and beyond.
That fact, together with the weak mutterings of housing industry ostriches, barely audible due to the sand in their mouths, explains how the whole world can be caught by surprise by ‘small market adjustments’ such as the housing price collapse following the sub-prime mortgage scandal in 2008.
Which brings us finally to the article of interest, which has a patina of credibility thanks to being reported by what is, in our opinion, the world’s top newspaper, The Guardian: UK House Prices Likely To Keep Falling For Another Six Months
What should housing activists, and for that matter market speculators, make of this? Darned if we know.
Although this writer (a renter) will probably use the article as an excuse to once again put off digging under the driver’s seat for that ever-growing trouser-born semi-mythical treasure-trove of loose change.
