Monday, May 19, 2008
Fun with numbers
FT: House sales to decline by third, says Rics
8 out of 10 owners say their cat thinks prices will fall sort of thing. The site marks this as a duplicate article, but I can't find it in the listings so I'll post anyway.
"For 2009, Rics envisages further weakness in the early part of the year, followed by an improvement in market conditions." That's what they said in '92.
Posted by letthemfall @ 01:53 PM (515 views) Add Comment
9 Comments
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1. tyrellcorporation said...
We still have to have distressed sellers before we see any meaningful price drops. I looked at a house for sale the other day and the woman said if she didn't get her asking price she'd rent it out. She wanted to downsize but, quelle surprise, wasn't keen on any sort of discount to achieve that. EAs are finished if seller denial persists like this - hoisted by their own petard, eh?
2. letthemfall said...
Yes, prices are sticking in my neck of the woods. People still seem to think their house is worth whichever last big number they thought of. But if the middle classes are really as distressed as the recent reports say, this will soon change. Otherwise EAs are going to be wringing their hands and closing down in quick succession. And the boulder of debt will stay perched on the precipice - until it gets that little nudge.
3. doomwatch said...
Must be tricky working at the FT, pressing Crtl-C Ctrl-V all day. Really insightful.
4. Kron said...
I dont beleive its a case of people thinking that their houses are worth the asking price. Its more likely that a seller does not want to be the first to sell at the real value knowing that they wont be able to buy at a realistic price next. I personally would sell my house tomorrow at 50% lower than the EA suggested asking price if I thought that all other houses would come down in line. I think it will be when repossessed houses are sold cheap or people are forced to sell when realistic house prices will be seen in the EA windows.
5. plato said...
There is a Big Psychological Barrier to break here. The stubborn resistance associated with this would likely be successful too were it not reliant on affordability, and in some cases it is not. This is one of the immediate reasons for this decline.
IMO It is the FTBs who hold control of the scales. Without this market,stagnation and eventually extinction would take place. This is a longer term effect and I expect FTBs to be the key, depending on whether they get into the market. In this respect I expect to see pressure being applied (in the way of temptations) to this group as this is realised to bolster up the rest of the market.
I also expect to see an attempt to 'Ramp' Rents for the same reason.
6. cyril said...
tyrell's right - we need a bit of unemployment to make prices start to drop. At the moment it's really just the volumes which are down. If you can find a buyer, they're still paying top dollar (the fools). My neighbour's just sold his poxy little terraced house for £430,000, the b......d!
7. need-a-crash said...
I totally agree with all these comments. It's refreshing to have a discussion about this rather than the constant "they'll be drops of 20, 30, 60%" and the other fanciful numbers on this site. While deep down I feel prices could drop to 2005 levels (ie.approx 25% drop), all the evidence so far is of the "stagnation" that we on this site have derided for so long.
We're in month 5 of this year and much as I don't like to admit it the "stagnation" prediction by our nemises in the VI press is proving correct.
8. Stupid_boy_pike said...
I remember back in the 90's that prices raced up until the August, remained stagnant through the winter and didn't start to come down until about this time of the year.
If that process is repeated (and the prices have been fairly stagnant since last August) I would think we will start to see significant falls soon. With the new mortgage rules in place, the lending will not support these high prices. People will have to sell, they did in the 90's, proved by the price drop of one third, albeit over 3 to 4 years. I think it will be quicker this time.
9. it_is_going_with_a_bang said...
Unemployment won't be too far behind in this house price fuelled economy.
It takes time to filter through.
I know one of the local temping agencys in Worthing has almost no jobs available.
Compared to the last few years when there were always many jobs available.
It's coming.....