Swansea-State Of The Market

[Swanz]

Depends on the property. Big chains now offer lots of extras like video tours, floor plans and the like. The EA sells these for good profit in advance as well as EPC's. They make a few £100 by taking on some properties plus sell them further services like mortgages, insurance etc.

They have no intention of selling at the price they value at. The idea is to pick up the extra's before another EA does, then try to get the vendor to reduce by 15% or so. If they won't reduce, then let them go to another agent in 12 weeks time. Other EA's are not interested in taking them on due to over valuation, no extra's, no chance of a quick sale, but may take it on to increase stock levels.

Have you got any overpriced houses on your books?

[thirdwave]

Depends on the property. Big chains now offer lots of extras like video tours, floor plans and the like. The EA sells these for good profit in advance as well as EPC's. They make a few £100 by taking on some properties plus sell them further services like mortgages, insurance etc.

They have no intention of selling at the price they value at. The idea is to pick up the extra's before another EA does, then try to get the vendor to reduce by 15% or so. If they won't reduce, then let them go to another agent in 12 weeks time. Other EA's are not interested in taking them on due to over valuation, no extra's, no chance of a quick sale, but may take it on to increase stock levels.

Thanks for that wonderful insight into the twisted world of EAs Hope some of the vendors in Swansea West are reading this..

[Swanz]

Thanks for that wonderful insight into the twisted world of EAs Hope some of the vendors in Swansea West are reading this..

[thirdwave]

Did he say anything else about the local market?

I think he is right re the large houses - I have changed my tune and decided to go for a smaller property partly due to the costs of heating/running a home in the future plus the fact that I think, from a demographics POV, the bigger houses will be harder to shift.

I only wish I had come to this conclusion 12 months ago.

The latest RICS report makes fantastic reading for those of us hoping for crash bang wallop in Wales..Prices down, agreed sales massively down and current inventory per surveyor higher than anywhere else in the UK..This should set the cat among the pigeons hopefully

[Swansea Estate Agent]

Have you got any overpriced houses on your books?

Unfortunately I have.

Some new builds that we have been asked to help find leads.

Some are properties that have had other EA's value OTT, but we have been asked to market, but at the top valuation. Although I do not like to take on instructions like this, I do explain that IMO it will not sell. We do not value property just give our opinion. After a long period of no viewings the vendors do start to accept that it is over-priced, but by then they have found the house they want and need the money to buy it.

In fact most of our regular properties are priced by vendors or other EA's.

I have dealt with sales for many years, but we built this business for lettings and property management with sales being a bonus. We do have a large number of property available for sale, but not on the market simply because a lot of landlords wish to sell, but fear they will lose their tenants. Some of these properties are good value for money. We also have a supply of BMV property, but these are usually tenanted and packaged for investors.

We will be going in to the sales market quite heavily over the next 6 months though. I've mentioned before that we have not pushed this side because I am losing too many instructions due to other EA's high valuations. I give my honest opinion, but 99% of the time the vendor goes with the higher valuations.

[thirdwave]

Unfortunately I have.

Some new builds that we have been asked to help find leads.

Some are properties that have had other EA's value OTT, but we have been asked to market, but at the top valuation. Although I do not like to take on instructions like this, I do explain that IMO it will not sell. We do not value property just give our opinion. After a long period of no viewings the vendors do start to accept that it is over-priced, but by then they have found the house they want and need the money to buy it.

In fact most of our regular properties are priced by vendors or other EA's.

I have dealt with sales for many years, but we built this business for lettings and property management with sales being a bonus. We do have a large number of property available for sale, but not on the market simply because a lot of landlords wish to sell, but fear they will lose their tenants. Some of these properties are good value for money. We also have a supply of BMV property, but these are usually tenanted and packaged for investors.

We will be going in to the sales market quite heavily over the next 6 months though. I've mentioned before that we have not pushed this side because I am losing too many instructions due to other EA's high valuations. I give my honest opinion, but 99% of the time the vendor goes with the higher valuations.

Do you expect vendors to have come to their senses by then? Are you going to be focusing on the lower end of the market? My impression from speaking to several major Swansea BTLers (everyone I know in Swansea, including hospital consultants and uni professors, seems to be into BTL..nuts) is that there is more action in the lower price brackets (HMO mostly). I do worry about some of these amateur BTL landlords who have built up huge portfolios (on 95-100% LTV in many cases) with little knowledge of the market, apart from a blind assumption that 'prices always go up in the long term'..It`ll be carnage once university funding cuts hit and English fee paying students leave in droves..

I am almost being coerced into buying by Mrs TW who has no fundamental grasp of economics (she does know we are in a recession bless her lol) but do recognise buying higher end properties even at 20% off current asking prices would be tantamount to financial suicide, given the dire state of Swansea's economy..

I get visions of Detroit every time I imagine Swansea in 10 years time (gulp)

Edited July 13, 2011 by thirdwave

[The Masked Tulip]

I have to admit I keep thinking of places like Detroit and Gary Indiana when I think of Swansea. I keep getting offered great well-paying jobs elsewhere in the World but nothing in Wales... and I am more and more thinking of just going.

I know several GPs and Surgeons who each got badly stung for tens of thousands each several years back with an ostrich farm scam. Most of them then moved into BTL - they simply are paid too much money and have little idea of what to do with it...

It is the same with some of the academics - again, lots into BTL.

I am convinced that few realise what is about to hit them. I spoke yesterday with a lecturer in languages at Swansea Uni who appeared to be in complete denial about what was happening education-wise.

[Swansea Estate Agent]

We gain new investors every day and many seem to be looking for anything at £40k or below with a view to renovated and either selling or letting. Some looking for HMO's.

I think most are just looking to buy cheap, do up and live there, but pretend to be investors, so that we find them a bargain.

We have tried to focus on the lower end because that is what we seem to sell. Would like to get involved with the higher end, but I tend to be about £50k short on the vendors valuations.

Things may get worse, but Detroit!!!!

Not that bad.

[The Masked Tulip]

Things may get worse, but Detroit!!!!

Not that bad.

You obviously weren't in Swansea in the 80s and early 90s. At least then there was the, admittedly slow, possibility of changing from heavy industry to service industries and tourism.

Tourism has failed repeatedly and service industries are going overseas.

[Woot]

You obviously weren't in Swansea in the 80s and early 90s. At least then there was the, admittedly slow, possibility of changing from heavy industry to service industries and tourism.

Tourism has failed repeatedly and service industries are going overseas.

Tourism is doomed to failure in Swansea because anyone east of Cardiff thinks of Swansea as grim and uber-Welsh, and indeed the Welsh rarely disappoint in their treatment of non-North&West-Walians. It's unfortunate but true; there are enough aggressive Welsh speakers who will turn their backs on a non-local, and speak Welsh solely to exclude, to make outsiders feel shunned or intimidated. The Welsh Assembly can tart up the buildings all they want, but until they can get the significant proportion of more militant natives to behave in a more welcoming manner they won't reverse the negative reputation.

Interestingly, my family are all Celts but I live in Wales these days and am married to an Englishman. We spent a summer in Scotland a while back - his first experience - and his most significant impression was how warm and friendly the Scots are to outsiders compared to the Welsh.

Sorry folks.

[Swansea Estate Agent]

Tourism is doomed to failure in Swansea because anyone east of Cardiff thinks of Swansea as grim and uber-Welsh, and indeed the Welsh rarely disappoint in their treatment of non-North&West-Walians. It's unfortunate but true; there are enough aggressive Welsh speakers who will turn their backs on a non-local, and speak Welsh solely to exclude, to make outsiders feel shunned or intimidated. The Welsh Assembly can tart up the buildings all they want, but until they can get the significant proportion of more militant natives to behave in a more welcoming manner they won't reverse the negative reputation.

Interestingly, my family are all Celts but I live in Wales these days and am married to an Englishman. We spent a summer in Scotland a while back - his first experience - and his most significant impression was how warm and friendly the Scots are to outsiders compared to the Welsh.

Sorry folks.

Being able to speak Welsh is probably the main reason. If there was no Welsh language, then that could not happen. I think a language of your own gives you something to be individual about. I'm not saying this is a bad thing or a good thing.

Personally I have found the Welsh to be much more friendlier to me than the Scots ever have although I have not lived in Scotland and most of my experiences were years ago and it involved football.

I find that the Welsh and Scots are very very patriotic and can take that a little too far which can come across as rude or ignorant rather than just being patriotic. Having said that us English can be just as bad.

[The Masked Tulip]

Rightmove and Property Bee are showing numerous price falls almost daily now - looks like we are moving from denial into the early stages of panic.

New properties coming on the market are still coming on for ludicrous asking prices - i.e. 3 bed bungalow in Southgate for over 500K asking - so it looks like some of the EAs are still ramping madly to get stuff on their books.

But in the past week lots of stuff that came on for silly asking back at the start of the year have begun to have serious price reductions - PB shows it all.

Still way over-valued of course as the initial asking prices were nuts. Looks like hundreds of Swansea sellers are going to chase the housing prices down and will reduce too little too late.

[The Masked Tulip]

I notice that this 3 bed semi has finally moved from Simpsons to John Francis today:

http://www.rightmove.co.uk/property-for-sale/property-30826603.html

I think it was originally on for something like 325K or perhaps above before dropping to 300K where it just sat there for, well, I can't remember how long. Two years? Three?

You can get an idea how long though by looking at picture 8 which shows decking on the front garden - in the background are trees on the other side of the road. The problem is you have not been able to see those trees from there since a house was built there 18 months or more ago.

Google maps shows the house:

http://maps.google.co.uk/maps?hl=en&q=BUDE+HAVEN+SWANSEA&rlz=1B3GGGL_enGB221GB222&um=1&ie=UTF-8&sa=N&tab=wl

Mumbles market don't look too buoyant does it - 3 houses in that road on for a long, long time now!

[justzee]

Rightmove and Property Bee are showing numerous price falls almost daily now - looks like we are moving from denial into the early stages of panic.

New properties coming on the market are still coming on for ludicrous asking prices - i.e. 3 bed bungalow in Southgate for over 500K asking - so it looks like some of the EAs are still ramping madly to get stuff on their books.

But in the past week lots of stuff that came on for silly asking back at the start of the year have begun to have serious price reductions - PB shows it all.

Still way over-valued of course as the initial asking prices were nuts. Looks like hundreds of Swansea sellers are going to chase the housing prices down and will reduce too little too late.

You are right on the money, I am watching a few properties and my number 2 to 4 preferences have all dropped their prices by 15k to 25k this just passed week. My number one preference is still in la..la..land though, being on sale since 2009 and the last time it dropped price was in June 2010 and then a £50 drop beginning of last month ...hmmm. if thing keep at this pace i may start viewing soon.

[The Masked Tulip]

You are right on the money, I am watching a few properties and my number 2 to 4 preferences have all dropped their prices by 15k to 25k this just passed week. My number one preference is still in la..la..land though, being on sale since 2009 and the last time it dropped price was in June 2010 and then a £50 drop beginning of last month ...hmmm. if thing keep at this pace i may start viewing soon.

It is almost the end of July - give it another 8 weeks and we could see some serious panic. A nice global sovereign debt crisis is all we need now... Oh look, here comes one now

[thirdwave]

You are right on the money, I am watching a few properties and my number 2 to 4 preferences have all dropped their prices by 15k to 25k this just passed week. My number one preference is still in la..la..land though, being on sale since 2009 and the last time it dropped price was in June 2010 and then a £50 drop beginning of last month ...hmmm. if thing keep at this pace i may start viewing soon.

The only reductions I am seeing are on properties that in most cases have been on for a year or more..I tend to agree with the report last week which cited the demise of HIPS as the primary reason for an increase in numbers 'testing the market'..this certainly seems to be the case in Swansea..Most seem to be determined to hold out for full asking despite the market being absolutely dire. I am afraid only a sudden increase in IRs or a massive economic collapse will shift sentiment .....

[The Masked Tulip]

The only reductions I am seeing are on properties that in most cases have been on for a year or more..I tend to agree with the report last week which cited the demise of HIPS as the primary reason for an increase in numbers 'testing the market'..this certainly seems to be the case in Swansea..Most seem to be determined to hold out for full asking despite the market being absolutely dire. I am afraid only a sudden increase in IRs or a massive economic collapse will shift sentiment .....

Yes, there is no point looking at stuff that comes on the market new now.... and some stuff that was on years ago still have ludicrous valuations.... but between those two camps are those who are clearly beginning to drop and the drops are increasing... I can only assume some actually NEED to sell.

[Swansea Estate Agent]

Yes, there is no point looking at stuff that comes on the market new now.... and some stuff that was on years ago still have ludicrous valuations.... but between those two camps are those who are clearly beginning to drop and the drops are increasing... I can only assume some actually NEED to sell.

That is the problem. The new instructions are still way over priced, so other vendors currently on the market remain reluctant to lower.

[The Masked Tulip]

Yep, you have your house on the market for a year or more, often longer, and then some numpty EA uses your asking price as the benchmark, and of course adds several tens of thousands on top, and you end up in a really surreal world of asking prices.

[bewildered_renter]

Rightmove and Property Bee are showing numerous price falls almost daily now - looks like we are moving from denial into the early stages of panic.

New properties coming on the market are still coming on for ludicrous asking prices - i.e. 3 bed bungalow in Southgate for over 500K asking - so it looks like some of the EAs are still ramping madly to get stuff on their books.

But in the past week lots of stuff that came on for silly asking back at the start of the year have begun to have serious price reductions - PB shows it all.

Still way over-valued of course as the initial asking prices were nuts. Looks like hundreds of Swansea sellers are going to chase the housing prices down and will reduce too little too late.

It looks very similar in Cardiff.

My rightmove email alerts often have a lot more properties in, many of which are price falls. Plenty of stuff listed in the last few months already showing drops, often more than just one.

I wish I'd been using PB for longer, but it certainly feels very different from the tail end of last year and the start of this year.

[thirdwave]

It looks very similar in Cardiff.

My rightmove email alerts often have a lot more properties in, many of which are price falls. Plenty of stuff listed in the last few months already showing drops, often more than just one.

I wish I'd been using PB for longer, but it certainly feels very different from the tail end of last year and the start of this year.

You should know by now that 'Swansea is different', and normal laws of economics don`t apply here.

More likely, its a over hyped dump with little productive economy to speak of, where the property market has gone into a deep state of coma in recent months due to the incestuous relationship between estate agents (with the notable exception of SPA) and BTL scum who have together conspired to keep asking prices at all time highs, aided by fortuitous intervention from the BoE in the form of perpetual ZIRP..

Following the market currently is like watching paint dry and I sometimes find myself wishing financial armageddon on the whole world just so prices in Swansea would drop to more reasonable levels.Its not a nice feeling

[The Masked Tulip]

Following the market currently is like watching paint dry and I sometimes find myself wishing financial armageddon on the whole world just so prices in Swansea would drop to more reasonable levels.Its not a nice feeling

Know the feeling all too well. It is not nice. Oh well, may have it happen this week

[niceathome]

You should know by now that 'Swansea is different', and normal laws of economics don`t apply here.

More likely, its a over hyped dump with little productive economy to speak of, where the property market has gone into a deep state of coma in recent months due to the incestuous relationship between estate agents (with the notable exception of SPA) and BTL scum who have together conspired to keep asking prices at all time highs, aided by fortuitous intervention from the BoE in the form of perpetual ZIRP..

Following the market currently is like watching paint dry and I sometimes find myself wishing financial armageddon on the whole world just so prices in Swansea would drop to more reasonable levels.Its not a nice feeling

I don't understand.

Why would BTL landlords conspire to keep prices high?

They tend/tended to be looking to buy more property and higher prices would make that more difficult.

[thirdwave]

I don't understand.

Why would BTL landlords conspire to keep prices high?

They tend/tended to be looking to buy more property and higher prices would make that more difficult.

Why would you want your 'investment' to depreciate in (notional) value? (plus increasing values allow you to use the resulting 'equity' to continue adding to your 'portfolio'i). Also, as pointed out by TMT, many Swansea EAs are heavily involved in BTL themselves and therefore have a significant VI in maintaining current price levels, even at the expense of lost sales..

I think many BTLers are happy for prices to stay where they are as most of them operate in the lower price brackets and low IRs still allow them to achieve decent returns on their 'investments' even at inflated prices.BTL only makes sense in a scenario of ever increasing property prices as most 'investors' expect to profit in the long run not from rental income but capital appreciation..

Although it may have little direct impact on the market for family homes at least in Swansea, what a buoyant BTL sector does is keep many EAs in business, thereby continuing to exert a perverse influence on general sentiment..

Edited July 25, 2011 by thirdwave

[The Masked Tulip]

If BTLs collapse in places like Brynmill/Uplands it will hurt a lot of people living in Sketty, Derwen Fawr, Mayals, Mumbles and further West who own them.

It would also be a sentiment change in people would be able to see some gorgeous houses close to the beach and parks on for reasonable prices.

An EA in a well known big chain who is responsible for their lettings told me recently that the lettings market in Swansea is "on the verge of collapse" - he was not referring to the student areas though but to the larger private houses which, unable to be sold, were now being rented out. He said that there were simply too many of them.

I know EAs who are involved in the above - they have told me - buying houses to rent out. In those regards the last thing they want, assuming that it is getting harder to rent out their properties, for a house in the same road or around the corner to sell for considerably less than they paid for their rental property.