Is Activity Really Picking Up ?

[Blunty]

I might be one of the people making EAs 'busier than usual' - in the sense that I popped in to one this morning to arrange a viewing for a house that popped up on Rightmove. I was intrigued bythis after also stumbling across this, since they're similar houses in the same road.

Went to have a look at the first one - a bit rough around the edges, but a recent kitchen and bathroom. Talking to the EA, I was told that 'interest in the property has been high' (of course it has) and that they would be accepting 'sealed bids' above the asking price. An interesting tactic to try to get prices to budge! Can't imagine there are many people fighting to pay more than the asking price just now for what is basically an ok place but nothing outstanding.

I'm considering a bid - but as I'm not desperate to buy just yet (as I'm renting) it will be a good 15 - 20% below the asking price. Even then... given the precipice we're facing, part of me is inclined to wait a while.

[brocken spectre]

I looked at 2 properties last week.No intention of Buying.

I assume a lot of people do this,got to keep your hand in so to speak.

EA said they already had offers,i say he wasn't lying very well.

BS

[Emy74]

Went and saw 6 properties on Sat. At one I was the 4th viewing and at 2 others someone was either already looking round or turned up to look when I was there. Also it seems pretty difficult to get through to agents these days.

On the flip side only one property on property bee in my area has gone under offer this month and 2 have come back on from being under offer.There are normally 5-10 by this time each month.

Therefore it looks like in my area anyway people are just looking but not buying.

[Stop The Ride]

I looked at 2 properties last week.No intention of Buying.

Ditto. Well maybe a slight intention of buying but unlikely at the moment.

Here in South Warwickshire, I've noticed a few houses go to SSTC this year. Mind you, a similar number have gone from SSTC to available.

[rex]

I am watching the West Dorset area and have similar experiences to other Dorset posts above. ie little movement in house prices; alot of very expensive stock been on the market since early 2008 at 2007 prices. Made an offer in West Dorset but owners not even interested in negotiating with me ... Very little coming onto the market at my price level (over 500k)

Edited January 20, 2009 by rex

[Papitogrande]

I know it isn't what most people on this site want to here but activity IS picking up. From what I can see prices have come down a fair bit and 'investment' money is coming in to pick up what are perceived as bargains.

http://www.mortgageintroducer.com/mortgage...r_in_London.htm

That's just from an email I got today but I personally have seen the evidence and know lots of people who concur.

I don't think prices will rise because of it but I think this may began to arrest the falls.

[Hip to be bear]

Since there seems to be a Dorset theme on this thread I thought I'd pop in my tuppence. Trying to sell in Dorchester at the moment. On for 5 weeks. Several viewers both sides of Christmas. One couple wanted to buy but husband's job is at risk. Second couple want to buy but have only just put theirs on the market. Our agents are busier since Christmas. I spoke to 2 others today who claim to have sold 17 and 9 properties respectively this month....Hmmmm!?!

Since ther are a few of us interested in Dorset prices on this board I will start a thread on the Prices in your area forum. Hope to see you there.

[manterik]

My local paper has a property section this week for the first time in two months.

Could it be a sign of a pickup or a dead cat bounce.

Either way I am not going to be buying.

[Mikhail Liebenstein]

At a guess, yes to all four of the above. And don't forget: every agent that's closed in your area is more business for the remaining ones. 50% agents closed, 50% more business per remaining agent, is still a 25% decline in overall activity.

Also I'd add that increasing sales volume probably show vendors are realising reality. The market should eventually start clearing itself, if it doesn't its now a market. Right now the market says prices are going down and as vendors drop prices more deals will happen.

[uptherebels]

I want to see activity picking up. There are houses around me that are now on the market for 109k, 115k, 119k, and so on. These were all over 175k last summer when they were sold as new. As more and more of these houses actually sell, then the price falls reported in the media will really speed up.

[Old_Traveller]

Right now the market says prices are going down and as vendors drop prices more deals will happen.

Precisely. That is exactly what should contribute towards the Panic phase.... "darling! our neighbour just sold by XXX less than our asking price!"

[Tony Tango]

I want to see activity picking up. There are houses around me that are now on the market for 109k, 115k, 119k, and so on. These were all over 175k last summer when they were sold as new. As more and more of these houses actually sell, then the price falls reported in the media will really speed up.

Not necessarily. Doesn't the fact that more are selling suggest that they may have reached or be approaching their new equilibrium price where supply is in balance with demand? If sales pick up, prices may pick up (unlikely) or at least stop falling. Prices for 'normal' goods don't normally fall as volume (demand) rises.

Prices will not drop indefinetly as many people simply will not sell at a 'loss'. The supply side reduction (fewer houses on the market) is one reason why prices have not already dropped further. Vendorws will prefer to stay put or rent out rather than sell at a loss. If prices do fall by more than 40%, the economy will be in such a mess that few people will be able to buy these 'bargains' (like all the FTB who were rubbing their hands with glee at the house price falls only to realise that the economic mess that was causing the house price falls was also proventing them getting a mortgage).

I'm a cash buiyer and I've been hanging on for the past 12 months to buy. Anecdotally, the EAs in my area (Wiltshire 500K market) have all reported an increase in interest this year (marketing or truth??). They reckon that there is pent up demand now from buyers like me resulting from such low activity in 2008.

IMHO I think that price drops of 60% are just fantasy - housing supply would have to massively outweigh demand. I'm expecting a 10% drop this year for a total peak to trough drop on average of 25%

When to jump? Now and risk making a loss, or only when we're definetly turning the corner....and risk missing a bargain?

Predicting a boom and bust is easy - I guarantee that there will be another boom, and then another bust. The only relevant question is when?

Edited January 25, 2009 by Tony Tango

[uptherebels]

IMHO I think that price drops of 60% are just fantasy - housing supply would have to massively outweigh demand. I'm expecting a 10% drop this year for a total peak to trough drop on average of 25%

Obviously, falls as a percentage will very greatly. Those houses I was talking about, have gone from £175k to around £115k, in a matter of months. At the "better" end of the market, I don't think there will be such big drops.

There may well be demand, as in "I wish I could buy a house" type demand. I don't think that there will be very strong demand for "average" houses any time soon. Unemployment, and the fear of it, will put people off wanting to borrow money. That's even if they could find someone willing to lend to them. It's mad to buy something that is going down in value, let alone borrowing the money to do so. You say that you are a cash buyer for a 500k house. Out of interest, how much below asking price would you offer right now, if you found the right place?

[Tony Tango]

Obviously, falls as a percentage will very greatly. Those houses I was talking about, have gone from £175k to around £115k, in a matter of months. At the "better" end of the market, I don't think there will be such big drops.

There may well be demand, as in "I wish I could buy a house" type demand. I don't think that there will be very strong demand for "average" houses any time soon. Unemployment, and the fear of it, will put people off wanting to borrow money. That's even if they could find someone willing to lend to them. It's mad to buy something that is going down in value, let alone borrowing the money to do so. You say that you are a cash buyer for a 500k house. Out of interest, how much below asking price would you offer right now, if you found the right place?

House went on market mid 08 at £650,000. According to EA had a couple of offers at that price, but buyers didn't follow through. Price dropped recently to about £550,000 - i.e. a 16.5% drop which was about the national average for 2008 (according to Nationwide figures). Vendor seems reluctant to budge below £540,000, which is a drop of 'only' 17%. On the basis that the house will probably be worth £487 by the end of this year (total 25% drop), I (generously) offered to split the difference - e.g. a 20% discount, but vendor will not budget despite me being a no-chain cash buyer!

Plonker (greedy) vendor - claims to BTL mortgage and tenant lined up (yeah - right). Maybe I'll offer him £500 in the spring/summer unless he's found some other sucker to buy before then!

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

My general impression is this - some of the uber-wealthy retired are buying investment properties in very specific locations. But there is really very little change atall. More and more EAs - including some I used to work with - are being sacked. Increasing numbers of professionals appear to be emigrating to Canada and Australia from my neck of the woods.

Of course, the government spin machine is pushing the green shoots story as hard as it can. It will fail.

Edited January 25, 2009 by gruffydd

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

FAMILIES are losing more money on their homes each week than they are earning in their wages, new figures reveal.

The average value of houses and flats is falling by £764 a week as prices continue to nosedive—yet the average pay packet is £479.

http://www.newsoftheworld.co.uk/news/14267...eats-wages.html

[GrillsBears]

Not necessarily. Doesn't the fact that more are selling suggest that they may have reached or be approaching their new equilibrium price where supply is in balance with demand? If sales pick up, prices may pick up (unlikely) or at least stop falling. Prices for 'normal' goods don't normally fall as volume (demand) rises.

No. It doesn't suggest equilibrium at all. It suggests that there are more buyers at these prices. However the rectitude of the buyer's decision cannot be determined. It must also be remembered that this "pick up" in activity is from historic lows. As for prices don't fall as volume increases... I give you plasma tvs, Ipods, PS3s etc. Prices only stop falling if there is a relative scarcity. As job losses increase and pressure on household income becomes more pressing I belive supply will actually increase.

Prices will not drop indefinetly as many people simply will not sell at a 'loss'. The supply side reduction (fewer houses on the market) is one reason why prices have not already dropped further. Vendorws will prefer to stay put or rent out rather than sell at a loss. If prices do fall by more than 40%, the economy will be in such a mess that few people will be able to buy these 'bargains' (like all the FTB who were rubbing their hands with glee at the house price falls only to realise that the economic mess that was causing the house price falls was also proventing them getting a mortgage).

You may be correct. Especially initially but death, divorce and the need to move for jobs will mean that some people have to move / enter the market. It is these people not those choosing to sell that will drive values downwards. Once it becomes apparent that values are not recovering others will decide to enter the market in a vain attempt to cut their losses. FTB's being priced out due to lack of mortgage availability is a further sign of what the banks expect to happen. They are looking at a 30-40% downside from here hence their reluctance to lend at low rates to those without deposits. FTB levels have been at record lows in the past few years mainly due to properties being snapped up by BTLs looking at capital appreciation. This engine has left the market for a generation or more. You are also contradicting yourself, house prices don't have morals or values. Prices may fall 40% and still there will be no buyers (you say so yourself) what will happen to prices at this point?

I'm a cash buiyer and I've been hanging on for the past 12 months to buy. Anecdotally, the EAs in my area (Wiltshire 500K market) have all reported an increase in interest this year (marketing or truth??). They reckon that there is pent up demand now from buyers like me resulting from such low activity in 2008.

Pent up demand... ha ha that old canard.

IMHO I think that price drops of 60% are just fantasy - housing supply would have to massively outweigh demand. I'm expecting a 10% drop this year for a total peak to trough drop on average of 25%

For what it's worth I believe 60% will be achieved for some btl slave boxes and for marginal properties bought by idiots on the way up. Good properties in good locations will suffers falls of approx 30% from peak. That's at least another 10 -15% from where we are now.

Predicting a boom and bust is easy - I guarantee that there will be another boom, and then another bust. The only relevant question is when?

I reckon after I'm dead. This is going to be a lesson different to that given in the 90's. The difference this time? Leverage. Lot's of people are going to be completely and utterly wiped out.

[Emy74]

3 of the six properties I went to see Last Saturday are now showing up as under offer on rightmove as are a few more properties now. Therefore it does look as if activity is now picking up in my area. I do know that 2 of the owners were desperate to sell and were open to offers so it may be as some have said that some sellers are getting real about their prices.

[Old_Traveller]

I reckon after I'm dead. This is going to be a lesson different to that given in the 90's. The difference this time? Leverage. Lot's of people are going to be completely and utterly wiped out.

Totally agree. Obviously not just because lots of people will be wiped out and wont be able to leverage, but also because lot's of lenders will also be wiped out, and those who remain would have learnt the lesson (hopefully) so new lending practices will not get us anywhere near pre peak HP / income ratios that formed the last bubble... at least until current bankers retire and a new (greedier and more creative) generation of bankers replace it... man is the only animal capable of stumbling twice on the same stone...

Edited January 26, 2009 by Old_Traveller

[Mrs Imp]

FAMILIES are losing more money on their homes each week than they are earning in their wages, new figures reveal.

The average value of houses and flats is falling by £764 a week as prices continue to nosedive—yet the average pay packet is £479.

http://www.newsoftheworld.co.uk/news/14267...eats-wages.html

Those losses are only realised if and when the owners decide to sell. Until then, it's a home and the price isn't real. Aside from the fact that many people have seen an increase in the value of their property first. People buying as investments are going to struggle in the short term. I'm trying to sell a flat. At it's peak (not what I paid) similar flats were selling for close to 120k. My flat is on the market for 90k, but I haven't lost 30k because that money was never mine - I didn't sell it for 120k. That means that I haven't lost 10k a year over the past 3 years. What I have had, is a home for the past few years, and a nice one at that.

If you look at houses from a purely investment point of view (and isn't that how we got into this mess in the first place?) then right now you're scuppered. In reality, that pile of bricks and mortar, or wychert, or wattle and daub, should only ever be seen as a HOME. It's great that prices are correcting to a more reasonable level so that people can afford a home (either by buying, or renting at a reasonable rate), so let's not spoil things by going back down the 'property as investment' route and analysing every penny that might or might not be lost from the value of someone's house.

Somethings to bear in mind if you're waiting for the bottom. There won't be any flashing lights or banners telling us when it is, only a retrospective list of figures and numbers. More to the point, what houses are actually going to be for sale at the bottom? One you want, or all the tat that people want to get rid of at any cost?

[needle]

I know it isn't what most people on this site want to here but activity IS picking up. From what I can see prices have come down a fair bit and 'investment' money is coming in to pick up what are perceived as bargains.

http://www.mortgageintroducer.com/mortgage...r_in_London.htm

That's just from an email I got today but I personally have seen the evidence and know lots of people who concur.

I don't think prices will rise because of it but I think this may began to arrest the falls.

You seem to have a thing about activity picking up.

Part of this forum's purpose, as far as I was aware, was for right-thinking people who were smart enough to see the bubble, to talk about what was the right price to buy and what was a good time.

I'm a mortgage broker

Whats your share of the 22k from last month?

Thats about 1 for every broker in the country, no?

[Girly girl]

A friend has been on the market since begining Dec, £20k off the asking price in 2007 but still £50k overpriced, anyway 1 viewing and that from a guy who hasn't lived in the UK for the past 10 years

[tinecu]

First posting for me.

Been visiting a few houses in South-West London over last 2 weeks and heard/noticed from various EAs that they had been busier since Christmas. Also seen a few more 'under offer' signs.

Is it :

- a marketing trick (which I suspect)

- normal for the season

- a dead cat bounce

- or a new reality ?

Cheers

yes

[RomanWall]

For what it's worth....

I live in a rented house in Sevenoaks. Landlord decided to sell in late 2007. House went on market in early 2008. Had 2 or 3 viewings early in the year, then nothing for the rest of 2008.

We have had 3 viewings this January already, with another cancelled viewing. No offers yet though.

Not sure if this is an indication that sentiment is picking up, or new year 'bounce', or local buyers think that things are bottoming out?

All I know is that given half a chance I wouldn't buy the house - so much wrong with it it would turn into a proverbial money pit. Some poor sod will probably buy it soon though.

[blankster]

In our local weekly paper one estate agent has reported that business is booming, much busier than this time last year.

This doesn't surprise me but I think that the upsurge will fizzle out, it was just people delaying until after Christmas - a bit like with all these redundancies - businesses that had waited until the new year to deliver their bad news.