[luigi]

Another bearish survey out from the Chartered Surveyors:

November 2010 RICS Survey (pdf file)

East Anglia finds itself near the bottom of the regional tables on most of the measures, most notably it has the most bearish price expectation for the coming three months.



The comments from individual surveyors are comfortingly bearish too, let's hope they are communicating these sentiments to the vendors:


Jeffrey Hazel FRICS, Geoffrey Collins & Co., Kings Lynn - "Xmas has come early this year. All aspects of the residential market have slowed down. Vendors will still not accept that the value of their property has fallen in line with the market."

Carl Eastwood, Strutt and Parker, Ipswich - "Price reductions are inevitable, with buyers in the market looking to pay well under current guide prices."

D M Potter FRICS, Potter and Co, Norwich - "Very quiet. We are seeing another round of agency closures in our city. 'Double dip' is here."


'Double dip' is here indeed!

Bring it on, Mr Potter!!!

This post has been edited by luigi: 14 December 2010 - 10:26 AM

[PbroAgent]

luigi, on 14 December 2010 - 10:23 AM, said:

Another bearish survey out from the Chartered Surveyors:

November 2010 RICS Survey (pdf file)

East Anglia finds itself near the bottom of the regional tables on most of the measures, most notably it has the most bearish price expectation for the coming three months.



The comments from individual surveyors are comfortingly bearish too, let's hope they are communicating these sentiments to the vendors:


Jeffrey Hazel FRICS, Geoffrey Collins & Co., Kings Lynn - "Xmas has come early this year. All aspects of the residential market have slowed down. Vendors will still not accept that the value of their property has fallen in line with the market."

Carl Eastwood, Strutt and Parker, Ipswich - "Price reductions are inevitable, with buyers in the market looking to pay well under current guide prices."

D M Potter FRICS, Potter and Co, Norwich - "Very quiet. We are seeing another round of agency closures in our city. 'Double dip' is here."


'Double dip' is here indeed!

Bring it on, Mr Potter!!!

Much the same in Peterborough. Too much stock and not enough proceedable buyers, on top of which I have a list as long as my arm of potential vendors who have told me to call them in the new year - more downward pressure on house prices. I reckon there will be a further 10% drop around here in 2011.

This post has been edited by PbroAgent: 14 December 2010 - 05:40 PM

[luigi]

PbroAgent, on 14 December 2010 - 05:40 PM, said:

Much the same in Peterborough. Too much stock and not enough proceedable buyers, on top of which I have a list as long as my arm of potential vendors who have told me to call them in the new year - more downward pressure on house prices. I reckon there will be a further 10% drop around here in 2011.

Good to hear that from the horse's mouth so as to speak, I wish some of my local agents were as honest!

Is it difficult to get the message through to vendors? Or are they waking up and smelling the coffee now?

Hopefully with another round of price drops, sales volumes will start to edge up again.

[PbroAgent]

luigi, on 16 December 2010 - 03:46 PM, said:

Good to hear that from the horse's mouth so as to speak, I wish some of my local agents were as honest!

Is it difficult to get the message through to vendors? Or are they waking up and smelling the coffee now?

Hopefully with another round of price drops, sales volumes will start to edge up again.

I'm an agent who will go in well armed with bags of evidence to justify what I am saying. Some vendors will listen and accept what is happening, some won't, and I've had a couple of occasions very recently where even husband and wife were at differences over what they thought the property should be marketed for.

At the end of the day it's my job to win listings, if I don't hit my targets then I'm under pressure from the management. If I go in and say what I really think I do not win the business - I've honestly tried it this week and lost three nailed on opportunities. One to another agent who over valued a very saleable house by 20k, one where the vendor was in cloud cookoo land over the price and in the end I was glad not to get it and the final one where the vendor thanked me for my honesty, understood exactly what his house was worth and realised he couldn't afford to sell.

Whilst I am well aware of our reputation and would rather not lie to vendors as it's not the sort of person I am, I am stuck between a rock and a hard place and find myself inevitably exadurating prices and over-stroking vendor egos to win the business only later to have to roll out all the old excuses to push the vendors into the price reductions needed to sell. Unfortunately we're all greedy bast47ds and selling a home is a very emotional business. If I didn't know better I know I'd be just the same as them.

Still it's a good job and a damn site better than working in a sweatshop somewhere.

[luigi]

PbroAgent, on 16 December 2010 - 11:21 PM, said:

I'm an agent who will go in well armed with bags of evidence to justify what I am saying. Some vendors will listen and accept what is happening, some won't, and I've had a couple of occasions very recently where even husband and wife were at differences over what they thought the property should be marketed for.

At the end of the day it's my job to win listings, if I don't hit my targets then I'm under pressure from the management. If I go in and say what I really think I do not win the business - I've honestly tried it this week and lost three nailed on opportunities. One to another agent who over valued a very saleable house by 20k, one where the vendor was in cloud cookoo land over the price and in the end I was glad not to get it and the final one where the vendor thanked me for my honesty, understood exactly what his house was worth and realised he couldn't afford to sell.

Whilst I am well aware of our reputation and would rather not lie to vendors as it's not the sort of person I am, I am stuck between a rock and a hard place and find myself inevitably exadurating prices and over-stroking vendor egos to win the business only later to have to roll out all the old excuses to push the vendors into the price reductions needed to sell. Unfortunately we're all greedy bast47ds and selling a home is a very emotional business. If I didn't know better I know I'd be just the same as them.

Still it's a good job and a damn site better than working in a sweatshop somewhere.

I see your predicament, it could be a slow grind down as those that need to sell gradually reduce to the point where buyers can be found, this then sets a new lower level for the market.

There might be a tipping point like in winter of '08 when everyone realises that the game is up, year-on-year drops now being reported could be the trigger for this.

I suppose the only thing a smart agent can do to get things moving at the moment is to negotiate the onward purchase on behalf of his vendor ie. you can afford to accept this offer cos I've found this place for you at a discount. If everyone takes a drop things might get moving again.

This post has been edited by luigi: 18 December 2010 - 08:58 AM

[PbroAgent]

luigi, on 18 December 2010 - 08:57 AM, said:

I suppose the only thing a smart agent can do to get things moving at the moment is to negotiate the onward purchase on behalf of his vendor ie. you can afford to accept this offer cos I've found this place for you at a discount. If everyone takes a drop things might get moving again.

I've been saying that and sounding like a broken record since mid 2007.

The two big issues I encounter are ego/ignorance and equity. Vendors often think they have the best house in the best condition on the biggest plot in the best street in the area. Of course this is very rarely true. They don't know better because what vendor shops for houses similar to the one they are selling? They don't know their competition and then get insulted when we try to inform them. I often encounter vendors who for some reason think that all the news stories they hear and see on the radio and telly each day somehow don't apply to them.

I have more than a few vendors who have looked at the comparable evidence that I have presented them with and announced that they think I am wrong and that their house is worth x. When I ask how they come to their valuation, they either then tell be that they can't (and visibly deflate as the reality hits them) or try to bluff their way onwards whilst getting worked up that I dare to question their judgement about their own home. If that happens I just have to back down and list it for the price they want or lose the business.

The other reason for high prices is equity. Not necessarily negative equity, although that is happening more and more but the fact that the vendor needs to achieve a certain figure to get a particular mortgage rate on the next house or just to get a mortgage at all due to the change in LTVs required by the banks. They won't or can't take less for their home because they know they then can't buy the next house. I have a friend who is trying to sell a flat in Brighton who is in this very predicament. If he sells it at or close to the asking price (and the same asking price as all the other similar flats in the area) after fees he will just have a 10% deposit to buy the next house. If he sells it for market value (i.e. what the others in the area that have sold actually went for) then he'll lose about 15/20k equity and will need a 96% LTV deal to buy the house (which of course he can't get any more).

So people like him don't sell and come off the market - one of the reasons why the RM HP Index is so much higher than the Halifax/Nationwide HP Index. This of course means that there is less housing stock availalbe and works as a balance in the supply/demand equation, meaning that we are less likely to see a sudden crash and instead a slow reduction in prices.