Monday, May 19, 2008
Asking prices up 1.2% - but Shipside turns bear!
Rightmove: Wrong tactics for market recovery [pdf]
Average asking price up 1.2% in May, marking a record high of £242,500. Figures are skewed by "discretionary" selling of expensive properties in the South. In 6 out of ten regions, there are year-on-year falls.
Miles Shipside, commercial director of Rightmove comments: “New sellers can see the storm clouds overhead but seem to believe it’s only raining on other people. The reality is it started raining last September, and has reached storm force in the last month.
Sellers who are hanging out to achieve last year’s prices need to accept that the market has fallen and that they will end up being punished in the long-run.
Posted by little professor @ 12:35 AM (459 views) Add Comment
10 Comments
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1. Andyh said...
Just goes to show that the Rightmove index is one of the more meaningless ones.
2. taffee said...
how is this moron company allowed to keep printing asking prices..total garbage
this company should be taken off the stockmarket
3. growler said...
I think you need to read their article. I thought Shipside was being unusually bearish in the whole story. Basically saying national stats skewed by Sout, and South skewed by "dreamers". Also, he goes on to say "lender looking after number one" which is as good as saying lenders couldn't give a stuff about borrowers. The who report talks about head-in-sand vendors and how such a policy will make things worse.
I can only say from my experience that in the Beaconsfield area, you've got agents like Bramptons that take places on that I KNOW were given guide figures almost 30% lower in April 2007. I don't imagine you have dreamer vendors only here, so given the VERY low mortgage approvals stats you can see, the key is that a house isn't worth anything until it is SOLD. And obviously people think they will find a sucker at some point. Trouble is, will that sucker get mortgage? Are buyers really that dim? I think sellers have forgotten that the internet exists, and people are very well up on whats going on.
4. hpwatcher said...
Good point taffee, asking prices don't mean anything.
5. str 2007 said...
Rightmove seem to be reporting what's going on and pointing to the fact that sellers are being unrealistic.
There will also be a number of agents out there run by 30 something year olds who don't remember the last crash and are taking properties on.
The more experienced agents realise the folly and overhead of filling the window with overpriced houses that won't sell.
I've witnessed asking prices of family homes go up about 15% since last September. The majority aren't selling.
I also know a buyer that despite having sold to rent last November has been sucked in and is spending in excess of £600k on a 'normal' family house. (build cost about 100-150k).
I quite believe the Rightmove figures - but reading the article they are quite aware that the figures are screwed by larger properties and unrealistic asking prices.
6. taffee said...
agents were saved from bust last crash because most were taken over by corporate companys who ran them at a loss
In my company of 20 branches then owned by a corporate non made any profit until 1999
7. Prof said...
If you look at the table for types of property, none go up over the last year by more than 1.3% over the year, and yet they claim "average price" goes up by 2.2%. Clearly they are not correcting for mix of houses (i.e. if only million pound house go on the market this month, the average asking prices goes up to 1 million).
8. growler said...
@str2007: I agree - and I think there is another theory that will skew the statistical basis. Maybe the proportion of lower prices homes (more mortgage dependent) is much lower and the houses where mortgages are not so relevant - like the over £1m market. I'm sure the index is weighted to take out averages when class sizes are smaller/larger to avoid unrealistically big up or downswings on askign prices, BUT the bigger houses are not as sensitive to mortgages. If not dependent on mortgage finance, by definition pricing is based on other criteria: such as plain speculation. Thus, when the big deals fail the decision isn't "sell cheaper to avoid defaulting", it's take house from market and try again another time.
9. new user 2007 said...
I like the thoughts of these homeowners...
..."the houses on my road have not sold since August, at 300k. They must be dumb, I will ask for 310k."
10. new user 2007 said...
Interesting how EAs are getting sacked (even in the invincible London market) yet they still refuse to encourage lower asking prices, and if not them, the vendor is in denial....
after 10 years of silly growth, they are clearly thinking it is now similar to the brief pause of 2005. They are in a for a nasty shock methinks