Dead Cat Bounce Underway In Mid-devon

[munimula]

My parents are STR (since early 07) under my guidance and constantly looking for their next property in mid-Devon

Two weeks ago they looked at a house that came on the market right on main road and because of that they weren't interested bu it went 'under offer' immediately.

Another house they've just looked at this week has 3 offers on the table straight away.

But more concrete evidence of a bounce is that a friend of theirs has had their house on the market for 9 months - just 2 viewings in that time, no offers.

But in the last week they've had 3 offers for the house (advertised £330k) and have had to go to 'highest last offer' today before choosing the buyer. One of the offers previously was £326k!!

This all adds up to a definite increase in activity in the market and they know the local EA well (enough so that they get told the real picture, not the bullsh*t) and they have confirmed that things have really picked up.

Personally I don't get it, constant news about falling prices and rising unemployment doesn't add up to all this activity. However these are properties approx £300k+ in value. They generally require people with cash, or large deposits so is this what we are seeing? Those with cash creating the dead cat bounce? I would be very worried if it was due to new relaxed bank lending criteria and reprsented something sustainable. How long is this pickup likely to last? How long can the cash rich stimulate a bounce? Could a bounce have a positive feedback effect and encourage banks to lend more and be more relaxed about lending and therefore sustaining the bounce? Is this happening anywhere else in the country?

[SarahBell]

It's the fake recession working.

Everyone knows its going to go horribly wrong but as road-runner does as long as they don't look down they'll be ok.

Loads selling round here. Hope they are to OO as there aint any tenants out there.

[munimula]

It's the fake recession working.

Everyone knows its going to go horribly wrong but as road-runner does as long as they don't look down they'll be ok.

Loads selling round here. Hope they are to OO as there aint any tenants out there.

To me it seems crazy that anyone would be buying and certainly buying at current advertised prices. But what is the mindset of these people? How are they avoiding all the doom and gloom about house prices falling and unemployment rising?

Maybe we expect too much, prices already down 20% from the peak in nominal terms, it's been a quick crash so far. Perhaps we can't expect it to go all our way to the bottom but this pickup is unnerving, especially as house prices are still far too high.

[economicvoicedotcom]

It's a dead cat bounce brought about by prices and borrowing costs reaching an acceptable purchasing threshold for some buyers who have been waiting desperately for maybe up to a year to buy. But this is probably the last of the money available and it is being mopped up.

Removal firms are also reporting more trade, so that shows the deals are happening and going through.

The market will not be able to fight off the drop to about 3 times average wage for ever though. Especially as more and more people (maybe 3,2m) will be out of work within 12 months. We could then see these recent purchases back on the market in distressed circumstances.

[munimula]

It's a dead cat bounce brought about by prices and borrowing costs reaching an acceptable purchasing threshold for some buyers who have been waiting desperately for maybe up to a year to buy. But this is probably the last of the money available and it is being mopped up.

Removal firms are also reporting more trade, so that shows the deals are happening and going through.

The market will not be able to fight off the drop to about 3 times average wage for ever though. Especially as more and more people (maybe 3,2m) will be out of work within 12 months. We could then see these recent purchases back on the market in distressed circumstances.

I hope you are right and that this money gets mopped up quickly so the crash can resume...

It just doesn't add up when we are being told by many sources that a further 1.2m are likely to lose their jobs in the next year. For everyone that loses their job there must be another 5-10 concerned about theirs. That's not an environment for sustained housing market pickup.

[hev]

My parents are STR (since early 07) under my guidance and constantly looking for their next property in mid-Devon

Two weeks ago they looked at a house that came on the market right on main road and because of that they weren't interested bu it went 'under offer' immediately.

Another house they've just looked at this week has 3 offers on the table straight away.

But more concrete evidence of a bounce is that a friend of theirs has had their house on the market for 9 months - just 2 viewings in that time, no offers.

But in the last week they've had 3 offers for the house (advertised £330k) and have had to go to 'highest last offer' today before choosing the buyer. One of the offers previously was £326k!!

This all adds up to a definite increase in activity in the market and they know the local EA well (enough so that they get told the real picture, not the bullsh*t) and they have confirmed that things have really picked up.

Personally I don't get it, constant news about falling prices and rising unemployment doesn't add up to all this activity. However these are properties approx £300k+ in value. They generally require people with cash, or large deposits so is this what we are seeing? Those with cash creating the dead cat bounce? I would be very worried if it was due to new relaxed bank lending criteria and reprsented something sustainable. How long is this pickup likely to last? How long can the cash rich stimulate a bounce? Could a bounce have a positive feedback effect and encourage banks to lend more and be more relaxed about lending and therefore sustaining the bounce? Is this happening anywhere else in the country?

[Laura]

Perhaps we can't expect it to go all our way to the bottom but this pickup is unnerving, especially as house prices are still far too high.

I think your sig now needs a major revamp munimula

I was going to say Devon is different but then along comes Sarah Bell with a 'boom in Oldham' post

Maybe we overlooked the obvious? - All that Gorbon had to do was fool some of the people some of the time, & that has forever been the easy option unfortunately.

[Optobear]

My parents are STR (since early 07) under my guidance and constantly looking for their next property in mid-Devon

Two weeks ago they looked at a house that came on the market right on main road and because of that they weren't interested bu it went 'under offer' immediately.

Another house they've just looked at this week has 3 offers on the table straight away.

But more concrete evidence of a bounce is that a friend of theirs has had their house on the market for 9 months - just 2 viewings in that time, no offers.

But in the last week they've had 3 offers for the house (advertised £330k) and have had to go to 'highest last offer' today before choosing the buyer. One of the offers previously was £326k!!

This all adds up to a definite increase in activity in the market and they know the local EA well (enough so that they get told the real picture, not the bullsh*t) and they have confirmed that things have really picked up.

Personally I don't get it, constant news about falling prices and rising unemployment doesn't add up to all this activity. However these are properties approx £300k+ in value. They generally require people with cash, or large deposits so is this what we are seeing? Those with cash creating the dead cat bounce? I would be very worried if it was due to new relaxed bank lending criteria and reprsented something sustainable. How long is this pickup likely to last? How long can the cash rich stimulate a bounce? Could a bounce have a positive feedback effect and encourage banks to lend more and be more relaxed about lending and therefore sustaining the bounce? Is this happening anywhere else in the country?

If you had stacks of cash and wanted a house to withstand an economic armageddon (wood to burn, hedges & fences to keep people out, reasonable climate, locally catchable food, space for a diesel generator, not too many feral children swarming around), where would you choose to buy? Could that be a factor?

[hev]

Interesting as Torquay is dying a rather rapid death.

Loads of repos coming up although they tend to be guest houses and terrace properties which are unsuitable for those retiring to the area.

Employment is poor in this area, so not many will be able to come up with the dosh to really go for it, I suspect those actually buying are coming in from the more expensive areas.

[drrayjo]

I hope you are right and that this money gets mopped up quickly so the crash can resume...

It just doesn't add up when we are being told by many sources that a further 1.2m are likely to lose their jobs in the next year. For everyone that loses their job there must be another 5-10 concerned about theirs. That's not an environment for sustained housing market pickup.

(Premature) fear of inflation is rife amongst the cash-rich older sorts involved in buying now.

That and the predisposition to believe that house prices can't really stop going up, even in real terms.

The "return of the market?" story pumped by nearly all media outlets is enough to push many into buying.

It will all pass.

[munimula]

not too many feral children swarming around

If that was the case you would be looking outside the Uk would you not?

[endgame]

I sold and now and rent in Mid Devon, Tiverton, so I know what you are saying. A freind of mine who is in a simmilar situation (whos brother is a hpc member) is looking to buy as prices have come down and the money he has makes little interest in the bank which might go bust-who knows?

Im going to wait longer as I think much of the recent activity is down to those with cash looking to pick up a "bargain" now that prices have fallen. Its generally the best and most reasonably priced properties that are selling but the majority are not.

[manterik]

It's the fake recession working.

Everyone knows its going to go horribly wrong but as road-runner does as long as they don't look down they'll be ok.

Loads selling round here. Hope they are to OO as there aint any tenants out there.

If there is a bounce it is surely a suckers rally. No crash ever goes down in a straight line as no boom ever goes up in a straight line. We are still only part of the way into a major crash.

[munimula]

I sold and now and rent in Mid Devon, Tiverton, so I know what you are saying. A freind of mine who is in a simmilar situation (whos brother is a hpc member) is looking to buy as prices have come down and the money he has makes little interest in the bank which might go bust-who knows?

Im going to wait longer as I think much of the recent activity is down to those with cash looking to pick up a "bargain" now that prices have fallen. Its generally the best and most reasonably priced properties that are selling but the majority are not.

I'm actually talking about Tiverton area, parents are also STR in Tiverton

[endgame]

I'm actually talking about Tiverton area, parents are also STR in Tiverton

which houses are you refering too?The sellers in Tiverton are stubournly not budging much on price but then not much is selling either. There has been a little bit of an increase in activity on some more unique houses that are of a lower price than the run of the mill stuff.

Edited April 9, 2009 by endgame

[symo]

I wouldn't worry, the side of my business which makes bits for part of the needless air industry has let a few go this week, that means lots of machine operators out of work in South Devon. Also have you seen how boarded up shops are in Torquay and Paignton at the moment? Quite a few of the White Elephant Princess Hay apartments in Exeter are still empty.

This is literally those who had mortgages arranged for the last year and haven't bought jumping in with both feet and their eyes closed. What is their to support high house prices in Devon? The answer is nothing. Agriculture is low pay, tourism is low pay and seasonal, hardly anything is manufactured here. The outlook for Devon is uber bleak.

[munimula]

which houses are you refering too?

Two have gone off Rightmove as under offer.

Other one is friends house so won't post that.

[Harry Sacks]

My parents are STR (since early 07) under my guidance and constantly looking for their next property in mid-Devon

Two weeks ago they looked at a house that came on the market right on main road and because of that they weren't interested bu it went 'under offer' immediately.

Another house they've just looked at this week has 3 offers on the table straight away.

But more concrete evidence of a bounce is that a friend of theirs has had their house on the market for 9 months - just 2 viewings in that time, no offers.

But in the last week they've had 3 offers for the house (advertised £330k) and have had to go to 'highest last offer' today before choosing the buyer. One of the offers previously was £326k!!

This all adds up to a definite increase in activity in the market and they know the local EA well (enough so that they get told the real picture, not the bullsh*t) and they have confirmed that things have really picked up.

Personally I don't get it, constant news about falling prices and rising unemployment doesn't add up to all this activity. However these are properties approx £300k+ in value. They generally require people with cash, or large deposits so is this what we are seeing? Those with cash creating the dead cat bounce? I would be very worried if it was due to new relaxed bank lending criteria and reprsented something sustainable. How long is this pickup likely to last? How long can the cash rich stimulate a bounce? Could a bounce have a positive feedback effect and encourage banks to lend more and be more relaxed about lending and therefore sustaining the bounce? Is this happening anywhere else in the country?

It's affluent Devon. Few are suffering down here. Agri land is still fetching top money.

[Reck B]

I wouldn't worry, the side of my business which makes bits for part of the needless air industry has let a few go this week, that means lots of machine operators out of work in South Devon. Also have you seen how boarded up shops are in Torquay and Paignton at the moment? Quite a few of the White Elephant Princess Hay apartments in Exeter are still empty.

This is literally those who had mortgages arranged for the last year and haven't bought jumping in with both feet and their eyes closed. What is their to support high house prices in Devon? The answer is nothing. Agriculture is low pay, tourism is low pay and seasonal, hardly anything is manufactured here. The outlook for Devon is uber bleak.

Not to mention the shops closing down in Princesshay. Also the high street looks so depressing - a row of 3-4 large units boarded up,( leading up to the new HSBC. )

[symo]

Not to mention the shops closing down in Princesshay. Also the high street looks so depressing - a row of 3-4 large units boarded up,( leading up to the new HSBC. )

Forgot about those. Seriously Devon is screwed as all second home owners will soon be offloading and all the retail froth is destroyed.

[endgame]

Forgot about those. Seriously Devon is screwed as all second home owners will soon be offloading and all the retail froth is destroyed.

I agree with this. Wealthy people bought holiday homes in Devon durring the boom times. As times get harder, I think that somewill have to sell to fund their expensive lifestyle as it contracts.

[endgame]

This one was on at £385000, now down to £250000http://www.rightmove.co.uk/property-for-sale/property-25109627.html?locationIdentifier=REGION^1345&maxPrice=350000&radius=1.0&includeSSTC=true&_includeSSTC=on&pageNumber=4&backToListURL=%2Fproperty-for-sale%2

Ffind.html%3FlocationIdentifier%3DREGION%255E1345%26maxPrice%3D350000%26radius%3D1.0%26includeSSTC%3Dtrue%26_includeSSTC%3Don%26index%3D30

That will teach em not to be so greedy!

[endgame]

This one was on at £385000, now down to £250000

http://www.rightmove.co.uk/property-for-sa...erty-for-sale%2

Ffind.html%3FlocationIdentifier%3DREGION%255E1345%26maxPrice%3D350000%26radius%3D1.0%26includeSSTC%3Dtrue%26_includeSSTC%3Don%26index%3D30

That will teach em not to be so greedy!

[endgame]

This one was on at £385000, now down to £250000

http://www.rightmove.co.uk/property-for-sa...erty-for-sale%2

That will teach em not to be so greedy!

Sorry for tripple post. Something weird happened. Glitch in the matrix?

Edited April 9, 2009 by endgame

[Hip to be bear]

Where are all those unemployed London bankers going? The activity in the market in Jan and Feb has allowed them to unload their expensive London properties and buy a nice place in the country mortgage free that seems like a bargain at £350K when they are used to London prices. THey aren't going to be finding a job in the city for a few years, so why not have a complete change of scenery and lifestyle.