Friday, Sep 17, 2010
Volumes Down
Essential Auction News: Monthly News Update
Scroll all the way down for a bit more commentary at the bottom. I don't understand the failure to sell unless the sellers have put unreasonable reserve prices on their lots. Surely the whole point of an auction is to find a fair price for an item, and if 40% don't sell, the reserve is too high. Needless to say there are more repossessions now than in 2007, so why doesn't this feed in to volumes at auction?
Posted by ontheotherhand @ 01:34 PM (708 views) Add Comment
6 Comments
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1. will said...
otoh @ post above.
I am not sure there are many repossessions appearing at auction at this time, because the banks can't afford to offload them at a loss. It is better for them to hold on until better times. Also the Government has various schemes and agreements with the lenders to enable mortgagees to stay in their home when things get tough. How long they can hide the bad balances on their sheets is another question.
I live in Exeter and on Rightmove there are over 1000 properties listed for sale but never more than 2 or 3 going to auction. How times have changed since the 1990's.
2. Arthur Kinnell said...
This is fascinating - the interesting bit is if you compare the numbers of residential properties on offer for each region it's generally about the same as a year ago, whereas percentage sold has dipped, while the money raised has collapsed. What's fascinating about it is the implications for prices.
3. sibley's b'stard child said...
During the pseudo-crash of 08/09 there was a chap on the forum (M241 or something similiar) that would regularly post (live) auction results. It was the same deal then; a large percentage wouldn't even get sold although it was nice to see the decrease in value of those that did...
4. cyril said...
I expect the banks agree amongst themselves not to sell repossessed houses cheaply, in order to maintain high prices. It only costs 0.5% to finance but they would lose some real money if they sold houses at a realistic price (i.e. lower). The funny thing is they are also not lending money to the people who want to buy them (unless you have a massive deposit) - presumably because they know they are over-valued.
5. greenshootsandleaves said...
Cyril @ 3 is spot on (nice one, Cyril, etc.). Very occasionally, though, someone will make things a bit awkward with a property 'priced to sell'. An interesting concept.
6. drewster said...
"if 40% don't sell, the reserve is too high"
Not necessarily. There could have been too few buyers at that particular auction; or too many other good houses at that auction. It might be a slow time of year e.g. summer holidays. Your house might be in an inconvenient location for bidders to view, or your viewing day might have clashed with another (better) house's viewing day. It might require too much work; or the details provided aren't enough to inform potential buyers of what a reasonable price might be. However if your house hasn't sold after three or four auctions, then yes it's time to drop the price.