The Masked Tulip, on 28 June 2011 - 09:43 AM, said:
I personally think that we are at the point of moving from denial to fear.
Yes, there are still plenty of EAs and sellers IMPO who are living in denial - they probably will be.
But the market is getting very mixed now.
Most of the new properties coming to the market come on for ludicrous asking prices - there is really no point in looking at something which has come on in the past 6 months, let alone in the past 8 weeks. They need a dose of reality.
Then you have the properties that have been on a year or more - sometimes several years - which just swap from EA to EA staying on at the same original ludicrous asking price. The sellers are clearly in denial and have no idea. For example, there is a house on West X Lane for circa 350K which I first saw for sale about 5 years ago for 380K. Wouldn't pay 200K for it personally. Or the 300K 3 bed semi near the Grange in West X that has been on 300K for 3 years no - just changes EA each year.
But there are properties that are beginning to drop in asking price now - property bee on RM shows this. It is very much like the cracks in the dam and you need to find those properties. I can't find one that I want myself, yet, but I have my eyes on a few properties. Some of these asking price drops are stupid - i.e. take 3K off a 350K asking price. But others are dropping 30K at a time.
In terms of 4 bed properties - Newton, Derwen Fawr and Bishoptson is full of them. You have you choice. The problem is that, whereas, many of these type properties came on for about 300K asking, now they often come on for ABOVE 300K asking with nearer 350K not being uncommon. You then sit and wait for it to come down to what should have been its original asking price of 300K... some are doing, others just sit there.
The problem as I see it with Swansea is that 3 or 4 of the EAs have been in competition to get stuff on their books so have been ramping initial asking prices. I also know of at least 2 EAs who are worried sick because they bought so much property in the boom period - if house prices in certain roads slip below what they paid for them then they are sitting on bankruptcy and not just losing a 'few' tens of thousands.
I know of another EA in Mumbles that has 4 properties listed as SSTC - a friend of mine simply put in offers on all 4 and has since pulled out, but the properties are still listed as SSTC.
The reality is that those 4 beds in Newton, Bishopston, Derwen Fawr, etc should have come on for 299K asking initial and have now dropped to the 270K/260K ball-park and they probably would sell. The EAs have created a rod for their own backs - so let them hang by them.
One of the old school EAs told me a few days ago that little is selling in Mumbles above 250K - yes, some properties are selling but only to those who have lots of cash, who are returning from places like London or who are simply finally a bit thick re IRs in the long-term.
This EA told me that he is now refusing to take certain properties on the books because he can't compete with the valuations that other EAs are giving sellers, as he knows he will not be able to sell the houses for those asking prices.
The recession has not hit Swansea yet. It is very odd. IMPO lots of very over-valued over-priced stuff out there. You will be amazed what rubbish 300K will buy you in Swansea.
So, can you find something - perhaps. You have to keep an eye on the market and look for stuff that has been on for a while or people are desperate to sell. Problem though, at the moment those kind are still few and far between. Denial still rules the Swansea property market IMPO.
Totally agree..Consider this beauty, for example
Has been on the market since Feb 2010,initially at 380k but recently reduced to 360k.It was bought in March 2009 for 240k by the current mortgagees, who probably spent in the region of 50-60 k tarting it up (new bathroom, lick of paint, twigs etc). Only one property has ever sold on the street for over 300k and that was at the height of the boom in 2008 and had a much bigger garden compared other properties on the street. Most sales at the height of the boom (2006-2008) were in the region of 250k-280k-in the early 2000s they were changing hands for around 130-150k IIRC.
What this deluded seller has done is raise the price expectations of other sellers nearby and two other houses on the same street have come on to the market at exactly 350k..I believe this pattern is being repeated throughout Swansea..
Compare that to what you can get for the same price (asking) in Horsham, West Sussex,close to the station within 50 mins of London
However, the question remains where does it leave serious buyers like me? I am a first time buyer with a rock solid job (a rare commodity nowadays), and a large deposit.What should my strategy be?
A full scale crash seems tantalising out of reach, as low interest rates allow mortgagees to hang on to their houses. Houses that have been on the market for over 6-12 months are either rubbish or ludicrously overpriced. I am interested in whether actual sales are going through in the 250k+ price bracket and if so, what discounts are being accepted? Where is Swanseaestateagent when you need him lol!
This post has been edited by thirdwave: 28 June 2011 - 07:20 PM