Monday, Jul 20, 2009
Get stuck in
Times: E-Poll: Do house prices now represent good value?
Current results: 83% No, house prices are still overvalued. 17% Yes, the current level is fair. 0% No, house prices are undervalued if anything.
Posted by little professor @ 06:55 PM (1492 views) Add Comment
22 Comments
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1. quiet guy said...
At 7.01pm,
93.3% - no, house prices are still overvalued
6.7% - yes, the current level is about fair
0 % - no, if anything, house prices are undervalued
Good clean fun but let's face it; the vast majority of those voting will be those who are priced out.
2. uncle tom said...
I think you can work out the numbers voting here...
At 6.55, 12 people had voted, 10 Overvalue, 2 Fair
At 7.01, 24 people had voted, 22 Overvalue, 2 Fair
At 7.32, 69 people had voted, 67 Overvalue, 2 Fair
- and no-one has said undervalued.
Now, who seeded those two fair value votes at the beginning??
3. uncle tom said...
7.41 - now 78 overvalue, and still only 2 fair value
4. uncle tom said...
100th vote cast at 7.45, and a third vote has been cast for fair value..
..think I'll get a life now - or at least a pizza! :)
5. luckyjim said...
That third option doesn't make any sense.
"Do you think that house prices in the UK represent good value?"
Answer "No - if anything they are undervalued".
So, by that logic, if prices go up a bit they WILL be good value.
6. shipbuilder said...
The sad thing is that people will buy knowing that houses are overvalued for fear of 'missing the boat'.
7. Pauly_boy said...
95% say no now :o)
8. uncle tom said...
"The sad thing is that people will buy knowing that houses are overvalued for fear of 'missing the boat'"
I don't quite follow your logic shipbuilder - if people think they are overvalued, they will bide their time until they either settle back to reality, or prove that the price is sustainable.
People only worry about missing the boat if they think prices are going to go racing ahead again, and I don't see much evidence of people believing that.
The fear that drove FTB's into borrowing dangerously large sums against minimal deposits has gone - as have the lenders offering those deals.
9. vindicated said...
Ok, I'm a proper bear of the highest order but I am watching houses on our community simply flying off the shelves (as it were) all of a sudden. Truly selling like hotcakes as though people really do believe that the bottom has been reached and we are on our way up again. I used to drive around with a smug grin on my face as I passed 'for sale' board after 'for sale' board. Now, all I see are flipping sold signs!!
..'only fools rush in'
As Uncle Tom has said, I'm one of the few round my way who is biding their time because I think houses are still overvalued....WAY overvalued.
10. mark wadsworth said...
Luckyjim comment 5 makes a valid point. Just as bad is the first option "No, house prices are still overvalued."
Surely, houses are over-valued and house prices are too high. You might as well say "No, houses are still too high", really.
BTW, we're up to 95.3% as of two minutes ago.
11. inbreda said...
@8 vindicated
so what you are saying is that you are quite surprised at the number of suckers being conned by the uptick?
No worries it just means there won't be any resistance left to the huge falls that will occur in the winter months. By next spring even thoughs that could buy will think of property as the worst possible investment.
12. jonb said...
Luckyjim,
The people who want prices to go up so they represent good value are people who are trying to sell properties at the moment.
13. shipbuilder said...
8. uncle tom said...
"I don't quite follow your logic shipbuilder - if people think they are overvalued, they will bide their time until they either settle back to reality, or prove that the price is sustainable.
People only worry about missing the boat if they think prices are going to go racing ahead again, and I don't see much evidence of people believing that."
I think that there are a few who have waited, believe we have hit bottom and are piling in now before, as they see it, prices spiral out of their reach again. They would account for the spring bounce, I think. Even though they know prices are still too much, it seems many just can't shake the widely-promoted idea that houses are on a permanent upward trajectory and the current dip is an anomaly. It's sad to think that some who were sensible enough to wait may be suckered by this bounce.
14. montesquieu said...
quite a few 'solds' round here (Berkshire) have changed back to 'for sale' again ... a trend that will only increase as the autumn sets in, exchange of contracts looms and people have to put their money/mortgage where their mouth is.
that's one of the reasons the VIs are in such a frenzy to keep the ball in the air ...
15. bluebeach said...
Inbreda @ 11... I wish I could share your optimism.... but what is going to happen over the winter months to change peoples views on what is a good investment? Interest rates levels should be just the same and if Ali and Gordo get their way, the banks will bring Mortgage rates down further. What, come Spring is going to turn peoples opinions on good investments? I just think it will be more of the same for as long as Brown can keep his grip on Government... He will just about do anything in his power or out of his power... His purpose scares me!
16. inbreda said...
bluebeach - my thinking is that at this point in time there are lots of reasons why prices would go up. house prices have fallen a lot and there are people who will happy buy knowing they didn't shoot their load at the top of the market. interest rates are artificially low so people are able to hang on to their houses for longer, it encourages people to buy in, and of course savers are getting nothing so some of them are buying in the mistaken beleif they are buying at a temporary low in house prices. Then, of course, there is the seasonal pattern - you know - the dip in winter that the EAs laugh off as "known seasonal fluctuations" as opposed to the spring bounce which is not (oddly) due to known seasonal variations but is in fact a clear sign that "everybody needs to buy now because the market has recovered and houses will cost an average of about a squillion pounds within the next twenty minutes".
Despite all these factors in favour of high house prices they are still not exactly flying are they? As has been said previously - unemployment has yet to show an effect. Interest rates will have to rise soon. Spring cannot last forever, and when autumn comes, and the current buyers are exhausted there will only be one way for house prices. All of those buyers that listened to the EAs and beleived the market had bottomed will regret their purchase, and sentiment will get a lot worse. Lots of people will be struggling to pay their mortgage. There will be more forced sellers. Mortgages are not going to be handed out like sweets, they will have LTV restrictions and income multiple restrictions. Prices will inevitably be lower. It will break the spirit of the bulls to the extent that by next spring - when we will all expect the usual seasonal bounce - prices will still be falling.
That's what I reckon anyhows.
17. uncle tom said...
Before you get too depressed about the 'Sold' signs - try checking your locality on Rightmove, and see how many more properties appear when you check the 'Include sold STC' box.
In my locality, I have calculated that the average time taken from a property being 'sold' to completed, is nearly four months - an exceptionally long time by historical standards.
There are plenty of people who want to move, but the lack of first time buyers is spoiling the party.
18. george monsoon said...
I think it prudent at this point to highlight a friend of mine who is an estate agent.
She is seeing the following pattern
More people are putting their houses on the market and there are more offers comming in, but these offers are dependant upon the buyer being able to sell their own house. There are very few people coming in at the bottom, so a lot of these sellers are eventually pulling their properties off the market again, because the buyer cant sell their own house..= no chain.
This might account for the Sold signs popping up as soon as an estate agent gets an offer.. but eventually these sold signs revert back to "for sale" because their is no FTB at the bottom of the chain to get things moving.
19. george monsoon said...
Sorry, just read Uncle Toms post above mine.. which says the same really.
20. nomad said...
I agree with inbreda. Lots of temporary landlords will not be able to hold out beyond the Autumn - same with BTLs who have always relied on capital gains. IR will continue to creep up, mortgages and savings - squeeze, squeeze, squeeze.
As for sentiment - look at the results of this pole (95.3% currently saying houses are overpriced) and look at the comments, where allowed, after all the ramping articles. Almost to a poster they are vitreolic about overpriced housing. They can't all be from this site.
21. Ianc said...
I am sure the small % saying prices are undervalued are estate agents / those with vested interests.
We have been trying to buy in a town in Dorset for 18 months. All house that have gone under offer in the last 6-12 months - the final sale price on Land Reg have all been around 15-25% below the original asking price. We have detailed analysis of over 15 properties. All this positive EA/RM news is rubbish! Only the realistic / desperate sellers have allowed the increase in activity!
I am so sure there are 12-24 months of more drops to come, we have sold up and moving into rented next month!
Rgds
Ian
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