Record pessimism in housing market

Growing number of homeowners have given up on selling

There is good news and bad news for the nationÂ’s housing market.

The good news is that in November, for the fourth month in a row, the number of houses on the market fell. The bad news is that the decline in listings doesnÂ’t represent a rebound but rather a growing number of frustrated sellers who have given up on selling their properties and have pulled their listings.

According to financial daily Børsen, the pessimism in the housing market is at a record high. In an opinion poll conducted by Greens Analyseinstitut, 35 percent of Danes polled responded that they didn’t think property prices would rise again until 2015 at the earliest. Just one year ago, less than 15 percent of respondents thought it would take at least four years for prices to rise again.

At Boligøkonomisk Videncenter, which conducts studies of the housing market, economist Curt Liliegreen pointed to the poll numbers as a sign that the housing bubble has finally popped.

“These rational expectations reflect that Danes have come to understand the gravity of the situation, and now estate agents cannot just talk the market up, as they have tried to do in the past,” Lilegreen said to Børsen. “As a homeowner, you need to adapt to reality, so if you want to get your property sold, either set a realistic price or wait to sell until the storm has passed.”

National home prices have fallen steeply since 2007. The latest figures from mortgage lenders association Realkreditrådet show that listing prices of homes dropped by 4.1 percent in 2011.

The current situation isnÂ’t all doom and gloom, however. According to financial services company Nykredit, the number of sellers who have decided to pull their homes from the market can help to stabilise prices in 2012.