The latest figures divined from the property website Rightmove show that asking prices fell 0.4% in the month. And at first sight this seem a little at odds with most of the data coming from the housing market of late.

There is data to suggest that there are growing expectations of house price rises among the public and that there is a dearth of homes coming onto the market. Potential sellers it would seem are holding on until better times.

Against this background it would not be unreasonable to expect asking prices to rise, with sellers testing the water at a price closer to the one they covet. But no, it would seem.

We do not have a normal market.

Here are a few thoughts on one aspect of the market that may be worth more examination.

Let’s put to one side the issue of mortgage availability, which is the pat answer to why the market isn’t functioning.

Let’s stop thinking of the market as relatively homogeneous buyers and sellers, albeit segmented into equity rich and equity poor. Of course that split is pertinent and important.

There is one potentially major and not much discussed factor that I think needs more consideration. And that is how wide is the spread of views among potential buyers and potential sellers on what they regard as a reasonable settling price in the current market, compared with a more normal market.

Over recent years there has been a reasonable consensus (or perhaps just acceptance) around what a seller will sell for and what a buyer will pay. The overlay of buyers expectations and sellers aspirations have tended to match reasonably well. It is clearly easier in a rising market, partly because buyers as well as sellers see a vested interest in rising prices.

I have not seen much research or data on this aspect of the market, but anecdotally it appears that there is a much wider spread among sellers on what they will sell for and among buyers on what they are prepared to pay. Also most crucially there is a significantly bigger gap between the median view of sellers and the median view of buyers.

So what we may have is a market where, in the main, it is just the more optimistic buyers who buy from the more pessimistic sellers (if you can accept my shorthand of pessimistic and optimistic to describe the relative position of seller and buyers within their pool).
And superficially there seems to be much to support the view that this is what we are seeing.

Given this shape of a market we would expect exceptionally skittish price movements as moods swing on the release of the most trivial piece of news or data. This is what we see.

We would expect a continuation of very low levels of transactions.

We would expect the much reduced pools of buyers and sellers to be exhausted far swifter than normal, creating “shortages” on either side of the transaction as apparent power shifts between buyers and sellers.

And, interestingly given the Rightmove figures, we might reasonably expect asking prices to fall in what might otherwise seem to be a strengthening market, as the less pessimistic sellers decide to hold off entering the market in anticipation of higher prices later.

The “why sell now if I can recoup more if I wait” effect could easily lead to a greater concentration of death, debt and divorce related sales in the mix – so there would be more homes “realistically priced to sell”, so asking prices on average could easily fall.

It all sounds a bit convoluted I know, but basically the housing market is in a bit of a Mexican cat-and-mouse standoff, which has been allowed to develop on the back of a more fluid rental market and ultra-low interest rates.

What appears different this time around is that sellers can choose to rent out their property whereas in the past they would have been more pressured into selling into the market. Buyers have more rental opportunities so can stay out of the market for longer. Each has more scope to pick their “best time” to enter the market.

Ultimately, if there is validity in this way of viewing the market, it would mean it will taking longer for house prices to settle at a corrected market price. This is bad news for estate agents as in turn it would mean a continuation of reduced numbers of transactions.

But what could this mean for the future more generally, if there remains a significant difference between buyers and sellers expectations on what is a reasonable price? How will these differences be corrected in the market?

These questions are probably best answered by examining the pressures on the two groups either side of the transactions – the buyers and the sellers.

What will allow buyers to increase their offers to a level where sellers are more prepared to sell? The most obvious here is more access to cash among the buying group and more confidence about the economic future.

What will cause sellers to lower their selling prices to a level where more buyers enter the market? The most obvious here is a sharp rise in unemployment, rising interest rates and more fear of the economic future.

If there is anything in this view of the market, on this analysis you have to say that the balance of power would seem to be with the buyers. Rising unemployment and rising interest rates seem far more embedded into the future than greater largess on the side of mortgage lenders.

If this is so, then we should expect to see further falls in the market as more sellers lose their nerve and drift into the “pessimistic” camp where deals are being done.

I wouldn’t read too much into one month’s figures from Rightmove, but apparent oddities do provide food for thought.