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auctionman

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  1. The effects I have seen are not just at the low end of the market in the auctions, it`s in all price brackets and most all areas of the U.K. For example today, London auction for AT Hawes only sold around 30%, and many unsold lots are not at the low end of the spectrum. Basically many cash buyers at auction simply will not bid on unrealistic guide prices being offered by the auctioneers as though it is still pre crunch 2007! Like the EA`s many of the auction houses are still in denial, but this will change. If they don`t revise guide/reserve prices downwards over the coming months some of them may go the way of the agents, going out of business! This has already struck several auctions which have stopped trading. Buy post auction, many unsold lots means that offers can be made when they don`t sell on the day, this equals price reductions, which is the effect I see across the board with the auctions.
  2. No one has mentioned the old devil of inflation! There is a bunch of real inflationary pressures in play now and they won`t go away. The BOE has been reducing the base rate to try and bring the inter-bank lending rate (LIBOR) down to rectify the credit crunch, but before long they will need to raise the base rate to curb inflation. This will have a severe effect on the property market I`m afraid. The last big crash of the early 90`s was caused by very high BOE base rates and this time round they won`t be anything like as high as 15% but imagine them at say 7.5%. The boom of the late 80`s was based on what was at that time thought of as low base rates of - 6.25% at their lowest. This time base rates of 7.5%, which is quite low historically, will be enough to put many people already in debt in trouble and will force them to sell or be repossessed unfortunately. Even though base rates are low the upward cost of living to pay ratio means interest rates have the effect of being higher in real terms for many people. Put with that rising unemployment due to recession in the USA and failing business here due to the credit crunch effects and the seeds for a hard landing are there. The banks already accept that property has been and still is overvalued because they are not lending high LTV ratios anymore or offering 100% mortgages. This is in effect a down valuation of property by the banks, they will not risk lending at current (or last year peak) values. There has already been a correction therefore. In a way they have a good excuse not to offer at high valuations anymore, it`s called the `credit crunch`! As to lack of sales upon which real sales values are derived from, well the auction market shows the true situation, where repos and those trying to sell fast market. In many auctions across the whole country the percentage of lots sold is getting smaller month by month. This will force the auctioneers to revise their vendor guide and reserve prices downwards. This is the real crash as is where anything that will not sell via estate agents boards will end up, like repos and anyone trying to sell quickly. These kinds of sales will end up with Land Registry statistics. I believe the banks have already accepted that values are too high which means prices will fall and continue to fall! The credit crunch makes things much worse but even when that situation improves the banks will not return to the kinds of lending which created the situation of last years peak values. When the credit crunch subsides, then the BOE will begin to raise rates to curb inflation, which will place strain on mortgage payers. If the BOE/government does nothing to try and curb inflation they will be `shot` by the opposition and everyone else really, and will not be well placed to fight the next election! The mechanics of the crash are all here now and there is no escape for the BOE/Government, when the crunch ends, rate will rise and prices will fall...
  3. This is the worst single auction result for anywhere in the U.K. for many years, I`ve been tracking most of the major and minor auctions since 2001 and have not seen anything like it, around 20% sold on the day only! They are not alone, many auctions around the country are not doing that much better. Venmores in Liverpool for instance on the 24th April realised around 30% of sales only and their previous few months have not been much better either! Thanks to M21er for all hos excellent work showing the bad situation in the auction market currently, and the comments from Mellors themselves says it all really, reserve prices below guide prices, and even then still not selling. They will have to revise their guide/reserves in June and beyond won`t they? Thing is Mellor have had very low sales percentages for this year, or the past 4 auctions, yet they still guide properties at a similar level for the following month, seems like they have been in denial, this will change or they will be in trouble before long! If anyone is interested there is an excellemnt site at www.futureauctions.co.uk which has most of the U.K. auction dates for the current month with links to the auction home websites, where results can be found and forthcoming auctions dates/listings, it`s a free to use site too! The base market is on the way down...
  4. Hello TeddyBear, no I don`t work for any auction house, or www.futureauctions.co.uk either! I have been studying the auction market since 2001 and found futureauctions.co.uk to be a valuable site because it enables access to most all of the U.K. auctioneers websites and the site does not charge currently for using it, unlike many other sites which do!
  5. Thanks to Happy? for his replies and to Doctor the main effect auction sales statistics and prices will have on the rest of the market is in that this is where many properties which don`t sell through EAs will eventually end up and also where a lot of repossessions will be placed for sale straight away. If, as is the case currently, auction sales percentages are very low generally, then the auctioneers will need to direct the vendors to accept lower guide and/or reserve prices in the future in order to get sales, which means that the market base level is falling! Auctions differ from the open market in that they are open to bids on a single day whereas on the open market property is open to offers everyday. Furthermore when your bid at an auction is accepted (when you have the winning bid on the day), then you are legally obliged to complete the sale. On the open market this is not the case, and you can withdraw anytime up to actual exchange of contracts. At auction when you bid is the winning bid contracts are exchanged that very day. If you then fail to complete, usually within 28 days of sale date, then you will lose your deposit, usually 10% paid on the auction sale day, plus could also be sued for expenses by the vendor, this does not happen on the open market. The current auction sales data of percentages of properties sold, over the past 6-7 months, which is of a decreasing level of properties sold, indicates that guide/reserve prices are too high and so will need to be lowered. This means the market is effectively falling at the moment an I believe will continue to do so.
  6. I agree with Mike Livinstone`s posting, it seems to come down to sentiment. Last time round, coming out of recession with the advent of a new government, (`97 with Blair New Labour), the mood changed as renewal bred confidence again and so house prices began to go up. The Labour party seems doomed now and so at the next election, around 2010 the Tories will be give another chance, especially by the younger generations who can`t remember the Thatcher/Lawson boom-bust of the late 80`s. After they get elected confidence will return as renewal, (whether real or not), will take place and as, by then , (around 2012), property values will have been low for a few years, the mood will change and prices will start to increase again. It has more to do with the next generation than with actual politics, in the last bust interest rates were high under the Tories, which killed off cheap lending, this time although interest rates are very low, lending has been killed off by a credit squeeze. Different reasons for a similar effect on the property market. Confidence has been lost now because of the crunch, last time it was 15% interest rates. Give it five years or so and somewhere around the middle of the next governments first term (2012), sentiment will change, confidence will return because it`s human nature to wish for things to get better again. Silly human race...
  7. The beach hut sale is an anomoly within the auction market, probably bought by someone who still has their head buried in the sand! Auctions are a very good indicator or what is really going on in the markets across the whole country because it is there where repos are tracked best and also where the keenest buys can be found, usually less than the `open market`. So if a situation develops where auction sales dive in a big way, bearing in mind that is where the real bargains may be found, then we know something drastic is going on - and it sure is! For example, if a vendor cannot sell at a more reasonable price at auction then he cannot sell it anywhere. In turn will follow that the auctioneers will need to revise the guide and reserve prices accordingly, or face losing out big time on their only source of income, namely their commission on sales achieved at auction. There now follows a few examples of how bad things really are right now. Manchester - main auctioneer for that area - www.edwardmellor.co.uk - see their latest auction results for 29th April 2008 - out of 115 lots offered - actual sales on the day of around 20%. Their last auction in March was not as bad as this but still had many unsold lots. This is the worst example of low auction sales I have tracked for a major auction house serving a large area for years! Before the credit cunch their sales were in the region of 70% to 80% per auction month by month or higher. Liverpool - one of the main auctioneers for Livepool - www.venmores.co.uk - their last auction 24th April 2008 - see their results for the past three months auction, very bad indeed, with the last selling only around 30%! These are two good examples of the REAL situation and what it means is that in order for these auction houses to continue to make a living they will have to advise future vendors to lower their expectations quite a bit to achieve sales at all, which in turn means that prices will really start going DOWN fast! If anyone wishes to check out many more examples of auction results showing a major downward trend like the two above go to www.futureauctions.co.uk - which has details of more or less all the auctions across the whole of the U.K. Don`t worry, there is no fee for getting the data on this site as it shows the current month auctions available with links to all the auction home websites where anyone can check results and forthcoming auction listings for free! So, be in no doubt, the CRASH is really going on right now and has been since the CRUNCH appeared last Autumn! Happy hunting for all those who have been waiting to buy anywhere in the U.K. Forget the agents and even places like RightMove, because the REAL situation is clear from the auction results. If you want to buy now, do it at auction or post auction. As time moves on the auctioneers will direct the vendor guide prices and therefore reserve prices downwards, due to lack of demand at their current offered prices. If they don`t do this, then they will not sell and end up losing most of their income derived from commission, as per the two results examples above for Manchester and Liverpool, which is only the tip of the iceberg! The general low auction sales results as a downward trend has been going since last September and is getting WORSE month by month. It is NOT going to improve! So for the auctioneers, who make their living from commission on properties sold, a `correction` in true property values, or how much bidders will actually pay for a given lot for sale, is essential for their survival as a business. As for estate agents who think they can market new property instructions without a realistic `corrected` price, well then they will simply go out of business. Thankfully most of the auction houses take a more pragmatic view and so prices in that arena will come down and continue to do so!
  8. About Manchester... Auctions are a very good indicator or what is really going on in the markets across the whole country because it is there where repos are tracked best and also where the keenest buys can be found, usually less than the `open market`. So if a situation develops where auction sales dive in a big way, bearing in mind that is where the real bargains may be found, then we know something drastic is going on - and it sure is! For example, if a vendor cannot sell at a more reasonable price at auction then he cannot sell it anywhere. In turn will follow that the auctioneers will need to revise the guide and reserve prices accordingly, or face losing out big time on their only source of income, namely their commission on sales achieved at auction. There now follows a few examples of how bad things really are right now. Manchester - main auctioneer for that area - www.edwardmellor.co.uk - see their latest auction results for 29th April 2008 - out of 115 lots offered - actual sales on the day of around 20%. Their last auction in March was not as bad as this but still had many unsold lots. This is the worst example of low auction sales I have tracked for a major auction house serving a large area for years! Before the credit cunch their sales were in the region of 70% to 80% per auction month by month or higher. Liverpool - one of the main auctioneers for Livepool - www.venmores.co.uk - their last auction 24th April 2008 - see their results for the past three months auction, very bad indeed, with the last selling only around 30%! These are two good examples of the REAL situation and what it means is that in order for these auction houses to continue to make a living they will have to advise future vendors to lower their expectations quite a bit to achieve sales at all, which in turn means that prices will really start going DOWN fast! If anyone wishes to check out many more examples of auction results showing a major downward trend like the two above go to www.futureauctions.co.uk - which has details of more or less all the auctions across the whole of the U.K. Don`t worry, there is no fee for getting the data on this site as it shows the current month auctions available with links to all the auction home websites where anyone can check results and forthcoming auction listings for free! So, be in no doubt, the CRASH is really going on right now and has been since the CRUNCH appeared last Autumn! Happy hunting for all those who have been waiting to buy anywhere in the U.K. Forget the agents and even places like RightMove, because the REAL situation is clear from the auction results. If you want to buy now, do it at auction or post auction. As time moves on the auctioneers will direct the vendor guide prices and therefore reserve prices downwards, due to lack of demand at their current offered prices. If they don`t do this, then they will not sell and end up losing most of their income derived from commission, as per the two results examples above for Manchester and Liverpool, which is only the tip of the iceberg! The general low auction sales results as a downward trend has been going since last September and is getting WORSE month by month. It is NOT going to improve! So for the auctioneers, who make their living from commission on properties sold, a `correction` in true property values, or how much bidders will actually pay for a given lot for sale, is essential for their survival as a business. As for estate agents who think they can market new property instructions without a realistic `corrected` price, well then they will simply go out of business. Thankfully most of the auction houses take a more pragmatic view and so prices in that arena will come down and continue to do so!
  9. House price meltdown is an ongoing thing at the auctions across the whole country. 2 examples:- Manchester - Edward Mellor - 29th April - over 100 lots up but only around 20% sold - the worst I have seen since the Crunch started! Liverpool - Venmores - 24th April - only around 30% sold, and their results have been consistantly low since last Autumn. Before the Crunch started most auction houses results were around 80% sold or at times higher! Now an overall average might be 40% or down by half. Which will mean the auctioneers will have to revise vendor price expectations and reduce guide and reserve prices or face month by month of very low sales and therefore commisson on sales. I believe the real situation can be seen more clearly by studying auction results and trends because this is the market that is supposed to be more price realistic than the open market and is where all repossessions end up, (as well as many other properties), when they fail to sell through estate agents etc. The real situation is therefore really quite bad already and is not getting any better. The prognosis then is that the crash is indeed under way and seems to be moving faster than many people may realise!
  10. Hello to you looking for previous auction results. If you have not already found it there is an excellent site www.futureauctions.co.uk This site shows all the major and minor auction houses upcoming auctions for the current month for the whole of the U.K. It has links to all the auction houses home websites where you can find their results and auction diaries. Things even for the auction houses are not good at all and have not been for the past six months. Two recent examples of the situation are:- Manchester - www.edwardmellor.co.uk - 29th April - only sold around 20%, the lowest I have seen for years. Liverpool - www.venmores.co.uk - 24th April - only sold around 30%. The thing about the trend is that just prior to the Autumn credit crunch most auctions were realising in the region of 80% plus sold, where as now the level of sold properties on overall average might be 40% sold, or half! I say forget the estate agents and rightmove because the real values are shown at auction and if bidders won`t pay the current guide prices then auctioneers will have to reduce the reserve prices in order to earn their living! All of this is an indication of how bad things really are in the market. The crash is going in a big way if the auctions are the more accurate market guide, where things are expected to be cheaper than the open market. If sales are down there then things are bad indeed as it is where a lot of properties that can`t be sold in the normal way will have to end up! If you are hunting for a property go to the auctions, either at or post auction. Currently they are having problems selling at all price brackets including repossed properties. Hope this helps you especially the futureauctions.co.uk website, it is free on the current month data.
  11. Hello, this is auctionman and I am a new forum member. I have started a new topic about auctions and have tried it as my first new topic, but am not sure if I have done it right! I clicked the button after typing my posting `post new topic` at bottom of page - is that it? Hope so.
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