Saturday, Jul 11, 2009
Huge property crash sees 9 in 10 homes sell below the asking price
Telegraph: Mini property boom sees one in 10 homes sell above the asking price
Parts of Britain are experiencing a mini property boom as estate agents report one in ten properties selling for more than the asking price. In pockets of the country - including London, Oxford and Cornwall - the market is buoyant as buyers fight to secure the best properties amid one of the most dramatic shortages of homes for sale in three decades. After 18 months of one of the worst property slumps the country has ever seen, there is pent up demand in the market that has led to a surge in demand for good quality homes. Lucian Cook of Savills says, Cash buyers who have sat on their hands for the past 18 months or so are now keen to take advantage of the price falls seen to date."
Posted by little professor @ 12:23 PM (2269 views) Add Comment
20 Comments
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1. paul said...
Yeeeah right.
2. jackas said...
Cash buyers.
3. brickormortis said...
Cash buyers don't make the world go round!
4. Rightold said...
There are also a lot of pent up sellers waiting on the sidelines.
5. This comment has been removed as it was found to be in breach of our Blog Policies.
6. Karen said...
There is definately a shortage. We are cash buyers and really want to get back into a home that we own as with cash in the bank not earning much renting is an expensive option. However, I am being very strick on only offering on what I beleive a house is worth. If someone comes up with better offer, my attitude is, "well let them have that one, I will wait for the next one to come on the market. It will cost less anyway". It is hard, and I am impatient by nature, but I am keen to keep in my mind that if we needed to sell again quickly we will only achieve the market value, not anything inflated due to the current supply and demand issue.
7. denzil said...
I doubt one in ten properties sell for over the asking price during a crash so even though the inverse blog title is clever it's probably not compelling evidence of any level of current crash speed. I may well be wrong though and during a crash, 10% of property may sell for more than the asking price but I doubt it.
And no I've not turned bullish on property. It still a shite investment and falls will probably accelerate again during the mid-autumn.
8. mander said...
At the estate agency's branch in Oxford, one in 10 properties is selling above the asking price while at its Truro branch, buyers have been queuing at the door before it has even been opened.
Yes we remember a case in Northern Ireland when people got paid to queue at the door of the estate agent. I can garantee that people with intentions of living in the those houses are not paying the asking price.
9. house said...
I have asked this question in the past about Cornwall, the prices have hardly dropped and they appear to sell very quickly when put on the market. I can only assume that the people with cash are buying these properties. I am not too sure about people queuing.
10. sybil13 said...
"Even a short term rise in prices, Fitch argues, is likely to make things worse in the longer term, by encouraging trapped sellers to put their homes in the market, which in turn will push prices down again. It sounds like a vicious circle with no way out, for the immediate future at least"
Mmmm doesn't sound like a "vicious circle" to me.
11. This comment has been removed as it was found to be in breach of our Blog Policies.
12. mrflibble said...
Lambs to the slaughter...
13. britishblue said...
Copy the nationwide house price chart from the side of this website. Copy it to a word document and blow it up. At the last two crashes when the trend line was breached there was a suckers rally. History as it invevitable does is repeating itself.
What I have noticed since the recent 'rises' in prices is a huge amount of property in my area coming onto the market. 'For sale' signs are everywhere. If the recent hype does have the effect of increasing supply, simple economics suggests that an increase in supply, with the same demand means a reduction in prices. Personally, I think the current media speculation will increase the supply and in the next few months as unemployment, etc kicks in, the second leg of the downturn will move into gear again.
14. hpwatcher said...
Cash buyers who have sat on their hands for the past 18 months or so are now keen to take advantage of the price falls seen to date
Well if they are paying over the asking price, they aren't going to getting much of a price fall, are they?
15. Ywo said...
Y'all have to know that there's been a paradigm shift in the economic system.
Capitalism has moved into a low growth/high unemployment phase. Mainly 'cause credit, which was used to extend the boom by creating more demand, is now not available on good terms to most.
Debt levels are still high and earnings are being driven down for the 'average' by an increasing reserve army of unemployed despite some inflation measures at below zero.
Low interest rates make certain things seem attractive - but average interest rates over the long term are still 5-7%.
You (ultimately) cannot buck the market.
16. mark wadsworth said...
LP, your headline is genius.
@ Karen, of course the cash you have isn't earning any interest (it's being stolen from you and given to reckless borrowers), but the calculation is simpler than that.
Your annual rent is £x. The price of the type of house you'd like to buy is falling in value by £y per annum.
1) If you think £y is bigger than £x, then keep renting.
2) If you think £x is bigger than £y, then you'll have to buy somewhere in the next year or so.
I am firmly in the scenario (1) corner.
17. Clockslinger said...
Since RICS records began in 1978 numbers of properties coming onto the market have only been lower a "handful of times", eh?. Now, that is the kind of clear and precise statistic I can work with. Has unemployment (based on the palm unit quantum) been on a similar level a fistful, gobful or bowlful of times since 1978? Harry Wallop...or what?
18. gone-to-colombia said...
Karen.......... We are years away from the bottom of the market. Far better to wait and rent.
Of course, all vested interests are trying to talk the market up, we should expect them to do this, it is very much within their interests to keep prices falling at as slow a rate as can be achieved. All the economic 'planets' are lined up for further substantial falls.
19. mr messy said...
house price crash where- ??????????????have seen some houses by me up 5% of their value since 2007. and no they havent had conservatories and fitted kitchens added, where are people geting the money from ,what with job insecurity and wages falling i must be missing something
20. Kingstonbear said...
1) If you think £y is bigger than £x, then keep renting.
2) If you think £x is bigger than £y, then you'll have to buy somewhere in the next year or so.
Not quite that simple as that!! Surely this depends on what mortgage and more importantly what rate?