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cashinmattress

Houses Selling At 11% Below Asking Price On Average

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http://www.moneyhighstreet.com/finance-news/2658/

The report from RICS shows that the gap between house asking prices and the selling prices is now narrowing.

Last August the same report showed the gap was widening.

Brigid O’Leary, RICS senior economist, said ‘As new instructions continue to decline, a lack of supply is providing some support to house prices and that has helped to close the gap. ‘

O’Leary added ‘While the pace of downturn may be easing, the housing market will still be challenged by an uncertain economic backdrop, the threat of rising unemployment and continued restrictions on mortgage finance.’

The North is the worst affected region where house sale offers are being accepted on average at 74% of the asking price.

In contrast, in London, where new buyer enquiries are strongest, vendors are now getting around 93% of the asking price and 55% of surveyors have seen the gap between the asking price and selling price narrow over the last 3 months.

Yes, waiting pays off.

But this is the peak buying season. Just imagine what the desparate sellers will have to settle for Febrary 2010, and beyond...

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interesting, but the unknown variable is, i suppose, the level of asking prices.

it's possible, for example, that both northern & southern houses are selling for around 20% less than at peak, but that southern sellers have woken up to HPC & have set asking prices at around 10% below peak selling prices... whereas northeners still believe that house prices only ever go up, & as such are asking for 5% above peak...

Edited by the flying pig

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interesting, but the unknown variable is, i suppose, the level of asking prices.

it's possible, for example, that both northern & southern houses are selling for around 20% less than at peak, but that southern sellers have woken up to HPC & have set asking prices at around 10% below peak selling prices... whereas northeners still believe that house prices only ever go up, & as such are asking for 5% above peak...

Well, since houses ain't selling, you can bet that people are buying up stuff which is advertised at, or below market expectations, and also receiving this extra discount in the process. There is no 'frenzy' and credit is resricted, etc...

There will always be exceptions, but I would say this was the case.

N'est pas?

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But this is the peak buying season. Just imagine what the desparate sellers will have to settle for Febrary 2010, and beyond...

Actually - a mate who's in the business tells me MUCH of the market is 25-35% down from the peak. RICS and others are telling the sheepies it's "11%" or whatever -- it is just a pathetic PR effort to try and convince the general public that "Yes - prices are down, but only 11%"....

It is PATHETIC!!

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The telling thing which we'll see in a couple more months is what the recent change in activity has meant:

1/ Bull trap, which will be followed by a return to crash speed.

2/ A levelling off of the market, there will now be rises and falls but houses will stay roughly at this level for a while now.

3/ A change in the market marked by continued falls but at a slower pace. Since the crash started falls have averaged over 1.5% per month, fro here on until we reach bottom they will average 0.8% with a mix of steeper falls in some months and others where prices might show minor rises.

I haven't put a bear market over bull market returns option in as I think thats too far fetched currently.

On balance while I know many will screeming option 1, I suspect we may well be looking at option 2 and maybe for not more than the next 12 months or so.

I thought about putting this in as a poll but with the preponderance of rabbid bears here I doubt it would yield a balanced and informative result.

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Actually - a mate who's in the business tells me MUCH of the market is 25-35% down from the peak. RICS and others are telling the sheepies it's "11%" or whatever -- it is just a pathetic PR effort to try and convince the general public that "Yes - prices are down, but only 11%"....

The quote is "11% below asking".

Given that offers used to be 0% below asking, I fail to see how this is a positive indicator for house prices.

tim

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The quote is "11% below asking".

Given that offers used to be 0% below asking, I fail to see how this is a positive indicator for house prices.

tim

Absolutely.

If the market were really picking up, selling would b close to asking prices.

But 11% down from an average (all indices) 15% = 26% down from peak (roughly).

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Absolutely.

If the market were really picking up, selling would b close to asking prices.

But 11% down from an average (all indices) 15% = 26% down from peak (roughly).

I speak to a lot of fellow surveyors in the UK and people are missing an important point. Some expectant buyers have absolutely no chance of getting finance but the banks will go through the motions of accepting a "processing fee" which the poor sap pays, then instructs the surveyor, who gets a fee, the surveyor then values "realistically"-the seller would say "undervalue" and the bank breathes a sigh of relief. The bank have been seen to be "trying to do something" but in reality it's one less headache for them and conservation of capital. He deals with one loan officer most of the time-one bank gave him four instructions (from the fifteen) and not one actually consummated. That's the reality. This story has yet to break in the mainstream but it will.

Tom MRICS

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I speak to a lot of fellow surveyors in the UK and people are missing an important point. Some expectant buyers have absolutely no chance of getting finance but the banks will go through the motions of accepting a "processing fee" which the poor sap pays, then instructs the surveyor, who gets a fee, the surveyor then values "realistically"-the seller would say "undervalue" and the bank breathes a sigh of relief. The bank have been seen to be "trying to do something" but in reality it's one less headache for them and conservation of capital. He deals with one loan officer most of the time-one bank gave him four instructions (from the fifteen) and not one actually consummated. That's the reality. This story has yet to break in the mainstream but it will.

Tom MRICS

Wouldn't be at all surprised.

"Churn", it's called in other industries.

Churning stuff around to no purpose and collecting fees for it.

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