Tuesday, Oct 21, 2008
Price is a matter of opinion
BBC: House sales slump 53% across UK
At these low low levels of house sales, the HP indexes are not going to be accurate.
and .. "The key factor in the sales slump has been the lack of funds ...".
Now hang on a mo, it wasn't that long ago when the BBC kept up the house prices staying high because of sound fundamentals, crowded island, demographics, divorce etc etc bullsh1t.
Posted by voiceofreason @ 02:08 PM (945 views) Add Comment
9 Comments
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1. European-bear said...
HPI is caused by too much money chasing too little product (i.e. easy credit). Now we have lots of product and bvery little money due to the credit crunch. Standard economic theory says that the price will drop to reflect the available money supply....
2. drewster said...
"At these low low levels of house sales, the HP indices are not going to be accurate."
Absolutely agree. If we had more sales the indices would be far lower.
3. waitingfor hpc said...
just spoken to a surveyor friend of mine and he is representing a client buying property direct from the banks at todays valuation minus 70%!!! That is the true state of the market!
4. waitingfor hpc said...
and they are all repossessed homes and the banks are so busy with repossessions that they have told him lots of people are being left in their homes far longer than they should be!!!
5. drewster said...
Waitingfor,
I'd quite like a house at 70% discount! Seems better than waiting til 2011 for the bottom. Can you put me in touch with your friend?
6. waitingfor hpc said...
you can be next in the cue after me! but his client has secured finance from one of the big banks and is still buying every property they put his way. The banks get 30% of the value back and they avoid bad press, also the banks have said that property at auction is not selling and creates bad headlines!!
7. 51ck-6-51x said...
The houses will sell at aution without reserve.
If they are not selling with a reserve of 30% of valuation then your friend is paying too much (discounting the auction house fee of course).
Of course if they would sell at around 30% then it is better for the banks to deal with a private buyer as it avoids publicity - this could be worth a whole heap depending upon the organisation involved (N.R.).
8. renting2 said...
Who's buying them? Investors? BTLers? Should we be looking for bargains to buy now?
9. plato said...
We are getting an idea now of the real drop in property values. There are several barriers to overcome that will be broken down as soon as desperation on the part of the vendors/banks reaches a critical level and the availability will become widespread. Those who are cash rich will then make a killing and those FTBs with 20%+ deposit and the right income multiple will get on the ladder.
IMO this 70% reduction should be used as the benchmark before considering such investment. Such was the over-valuation.