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Sybil13

What Are Sellers Waiting For, Further Losses?

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Can someone help me understand why people think that they will get more for their property next year?

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors said in March 2009:

Most of the house price indices suggest prices have fallen by up to 20pc from the peak. However, many of our members [surveyors and estate agents] cast doubt on this and calculate independently that the scale of price falls has been even greater − 30pc or more already. They suspect the Nationwide and Halifax figures are underestimating scale of the peak-to-trough fall to date.

Looking at the surveys you have to come to the conclusion that we aren't at the bottom by any stretch yet. Our members are still expecting further falls in prices, according to our survey, and if there's anyone you might expect to be talking up the market it is them.

The indexes show property down about 23% . Rightmove's average asking price is around £220000 , Halifax / Nationwide average selling is around £155000 or about 30% down on asking.

Nationwide said today they expect property prices to keep falling for "at least this year".

Most economists agree that until approvals double property prices will keep falling, and the last stats confirm that even when approvals started to go up after the last crash property prices continued down.

Moodys said that "the assumption last year was 25% falls ...the assumption now is 40%" and they stress tested for 60%.

NOTHING says that AFTER the falls the market is going back up to 2007 prices, RECOVERY means the market stopping falling and lending to return to sensible / sustainable levels. Property will only go up in line with wages / inflation as it historically has before the RMBS market (now closed) led to bad lending practice.

So on what basis are people thinking " I will rent my property out until next year"?

Are they thinking "I will rent my property out until next year because prices will have bottomed by then"?

Has there ever been a time in history when property prices fell 40% and went back up in a year? So why would ANYONE think it was worth waiting?

£300000 property 30% off peak £210000, (based on asking and selling prices ).

£300000 property 40% off peak, and let's admit it if Rightmove and Savills thought sellers should reduce 25 - 30% in January 2009 its going to be 40% by January 2010, £180000.

If you had to sell would you prefer £210000 or £180000 ? I know what buyers prefer but what do sellers want?

Buyers buying now at 30% off peak know they have potential losses of up to another 30%, why would anyone believe that buyers should risk even more of a loss on something they can only gain on by waiting?

So what are sellers waiting for?

Edited by Sybil13

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The recovery.

But what does RECOVERY mean?

Surely RECOVERY means the market has fallen as low as it is going to get , and either bump along there for years or slowly ever so slowly start to rise in line with sensible lending levels etc etc. . So why would you wait until the market is as LOW as it is going to get and then try to sell your property? Its already down on asking/ selling prices 30% it is going to go further down, it will probably not get back to 2007 prices for 15 years or more , so what are they thinking they are waiting for?

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So what are sellers waiting for?

Buyers are very active in my area (South Cambs). Houses unsold for nearly a year have all gone in the last month, typically at 10% below asking.

There is little supply left.

VMR.

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So on what basis are people thinking " I will rent my property out until next year"?

Are they thinking "I will rent my property out until next year because prices will have bottomed by then"?

Unfortunately they believe that it's all a temporary blip and if they can hold on for 18 months then prices will have returned to normal (they're right of course - they will be much closer to normal, just not the way they're expecting).

It's a result of years of VI spin, hard to break the indoctrination at the best of times.

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The majority of people saying "wait for next year" don`t see much beyond the TV and the papers they read, they have in no way sat down and really pondered the fundamentals, they just think that because houses were once expensive they always will be. If they were more informed there would never have been a bubble. Reality will overtake many of these people as they just can`t make the payments and realise that there are no tenants interested.

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But what does RECOVERY mean?

Surely RECOVERY means the market has fallen as low as it is going to get , and either bump along there for years or slowly ever so slowly start to rise in line with sensible lending levels etc etc. . So why would you wait until the market is as LOW as it is going to get and then try to sell your property? Its already down on asking/ selling prices 30% it is going to go further down, it will probably not get back to 2007 prices for 15 years or more , so what are they thinking they are waiting for?

2007 prices.

Basic NLP.

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Unfortunately they believe that it's all a temporary blip and if they can hold on for 18 months then prices will have returned to normal (they're right of course - they will be much closer to normal, just not the way they're expecting).

It's a result of years of VI spin, hard to break the indoctrination at the best of times.

The point is HAS IT EVER HAPPENED THAT WAY?

What is the basis of people thinking that property is going to go UP before it has even come down?

Last crash property went up 47% and fell 35% . This time, since 1999 property has gone up 147% and is now falling.

This time interest rates can only go one way.

This time the crash saw the door close on £200bn of RMBS which made up nearly 2/3rds of mortgage lending at peak.

This time the lenders and the country have gone bankrupt.

So on what basis do people believe we will be back at 2007 prices next year when everyone agrees there has NEVER been a crash like this one ?

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But what does RECOVERY mean?

Surely RECOVERY means the market has fallen as low as it is going to get , and either bump along there for years or slowly ever so slowly start to rise in line with sensible lending levels etc etc. . So why would you wait until the market is as LOW as it is going to get and then try to sell your property? Its already down on asking/ selling prices 30% it is going to go further down, it will probably not get back to 2007 prices for 15 years or more , so what are they thinking they are waiting for?

It`s the psychology of forgoing losses to get a future percieved gain or something, it`s the way all sheeple get caught in market/property busts. To sell now means taking a real chunk of change off your asking price, many people just can`t do this because they are uninformed and have no strategy in their mind for getting out ( the way a serious stock market investor would for example) they are just living in hope. The door really closed on property a couple of years ago, all we are waiting for now is the pain misery and real drops.

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Can someone help me understand why people think that they will get more for their property next year?

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors said in March 2009:

The indexes show property down about 23% . Rightmove's average asking price is around £220000 , Halifax / Nationwide average selling is around £155000 or about 30% down on asking.

Nationwide said today they expect property prices to keep falling for "at least this year".

Most economists agree that until approvals double property prices will keep falling, and the last stats confirm that even when approvals started to go up after the last crash property prices continued down.

Moodys said that "the assumption last year was 25% falls ...the assumption now is 40%" and they stress tested for 60%.

NOTHING says that AFTER the falls the market is going back up to 2007 prices, RECOVERY means the market stopping falling and lending to return to sensible / sustainable levels. Property will only go up in line with wages / inflation as it historically has before the RMBS market (now closed) led to bad lending practice.

So on what basis are people thinking " I will rent my property out until next year"?

Are they thinking "I will rent my property out until next year because prices will have bottomed by then"?

Has there ever been a time in history when property prices fell 40% and went back up in a year? So why would ANYONE think it was worth waiting?

£300000 property 30% off peak £210000, (based on asking and selling prices ).

£300000 property 40% off peak, and let's admit it if Rightmove and Savills thought sellers should reduce 25 - 30% in January 2009 its going to be 40% by January 2010, £180000.

If you had to sell would you prefer £210000 or £180000 ? I know what buyers prefer but what do sellers want?

Buyers buying now at 30% off peak know they have potential losses of up to another 30%, why would anyone believe that buyers should risk even more of a loss on something they can only gain on by waiting?

So what are sellers waiting for?

So is every surveyor member of RICS that currently values a house (not many I know) for a building society readjusting their valuations? On the way up it was ok (well safe enough) for them not to, on the way down not so.

Think of the mechanism: "hello mr/s EA i'd like to sell my house, blah blah, why yes that's the highest valuation of the three, we'll go with you". And if someone was daft enough to start the buying process the financial advisor says, "yeah great, no problem I've seen the wage slip, 5% off is a great deal, great time to buy, interest rates have never been lower, affordability blah blah". Then the surveyor shows up "yeah, uh, what was it the EA said the house was worth again, yeah umm thats absolutely spot on... there are some beams which might have come into contact with some floorboards that might have come in to contact with some damp". Then the lendors say, "you need to give us £2K, 20% deposit and pay at least 3% above base rate, but if you want to fix in for more than 5 years it's at least 5% above base".

NO ONE HAS ANY RISK EXCEPT THE VENDOR.

On top of tht the public don't know about the majority of your copy above and have a media that use the language of recoveereh and "experts" constantly talking about green shoots! Why would someone reduce their asking price?

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they think 10% a year increases in normal. So when we talk about recovery, they think, +10% for 2008, +10% for 2009, so 2010 prices should be over 30% higher than peak 2007 prices.

I spoke to my dad about it yesterday, he was talking about buying more property. My girlfriends parents want to buy another property. People are really obsessed with spending all their money on property - no matter how much it costs.

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Maybe they`re waiting for a miracle, or maybe they actually believe what Rinoa/Sibley/Valerius/McTavish say.

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They have to believe it's not a huge property bubble bursting,

just a temporary setback to property prices caused by other bank-related stuff that is being fixed

or has been fixed, or actually is pretending to be fixed...

I reckon embarrassment plays a part in the denial.

Imagine boasting at a dinner party two years ago about how your property bought for 200K is now worth 300K,

you've MEWed up to 250K to get the Porsche and you intend to sell for 400K in another few years,

making a 200k "profit" and continue forever onward and upward on the housing ladder

and how canny and successful you have been.

Fast forward to 2009. Your house is now worth less than what you still owe thanks to the MEW,

in your head you're still gonna sell it for 400k though,

and if you sell it for 200K now, your dinner party friends are gonna realise what a total misguided loser

you have been all along.

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they think 10% a year increases in normal. So when we talk about recovery, they think, +10% for 2008, +10% for 2009, so 2010 prices should be over 30% higher than peak 2007 prices.

I spoke to my dad about it yesterday, he was talking about buying more property. My girlfriends parents want to buy another property. People are really obsessed with spending all their money on property - no matter how much it costs.

I guess it was like Property Watch when we had to watch those 2 lambs to the slaughter going through the process of buying a terrace that was falling down and a dreadful ex council flat (at least that is what it looked like). Despite everything, they were borrowing more than they could possibly afford and the places needed EVERYTHING doing to them and then the presenter asked them "where they wanted to be in 2 years" , and BOTH said they were buying as an investment and wanted to "go abroad" "buy a bigger place" . At which point poor Merryn nearly fell off the couch in disbelief.

If people realised just how fall property is going to fall they would not be "obsessed"with buying no matter how much it costs.

Edited by Sybil13

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