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Homeowners Drop Asking Prices (telegraph)

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"Home owners trying to sell their houses are knocking more than £1,000 off the asking price as a lack of affordable mortgages and rising rates continues to plague the housing market, a report suggests.

By Myra Butterworth, Personal Finance Correspondent

Published: 7:00AM GMT 22 Feb 2011

"

http://www.telegraph.co.uk/finance/persona...ing-prices.html

Errr..............didn't know the Torygraph had that much forward vision!!

Anyway, £1000 off FFS! What's that, buy one and get a stick of used chewing gum free??

Edit: forgot linky

Edited by corevalue

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What a crock of sh!te that article is.

The Rightmove index records asking prices of houses coming on to the market. It would be correct to say that initial asking prices are lower than in the previous month, but completely incorrect to suggest sellers have knocked £1k off the asking price!

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dastardly's 100% - rightmove only measures new additions to the stock of houses for sales, even if 50% was added to, or subtracted from, the asking prices of every one of the houses that were up for sale in the previous month RM would pick up nothing.

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Rightmove seem to have a habit of press releasing any old bit of guff that they can think of. To them its all about marketing and keeping their name in the headlines, and the editors of the newspapers lap it up.

I dont see much coming out of other property portals.

Its all part of the plan to keep their name in the headlines while the property market is a dead man walking.

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"Home owners trying to sell their houses are knocking more than £1,000 off the asking price as a lack of affordable mortgages and rising rates continues to plague the housing market, a report suggests."

Anyway, £1000 off FFS! What's that, buy one and get a stick of used chewing gum free??

Agree with other posters that article is sloppy and makes no attempt to deal with what the figures actually say, or what they mean or what the context is.

She says:

"Asking prices were dropped by an average of 0.4 per cent in June to £226,436 as sellers were forced to cut their prices amid the housing slump."

Now if you assume that that £226,436 is 99.6% of the previous asking price, you get a drop of £909 - which could be written up as "more than £1000" if you're a journalist who just wants a sensational-sounding figure.

So now you say to people, "Anyone who is thinking of selling their house has to pay out £1000 just because of an unfair housing slump," and you have a nice feel-angry-at-the-unfairness-of-things story. You can then get more people saying how house prices should go up because "our house is worth more than £1000 less than it was last month."

This, of course, is a total abuse of the RM statistics - they don't pretend to be a measure of how much "our house" is worth. All they are - and all they say they are - is a measure of how much people are asking for their houses when they first advertise them on RM.

What Miles Shipside has been saying in his commentary, for several months now, is that people who really want to sell must reduce their asking prices to 20-25% below peak - and preferably as the initial asking price. I was talking to a local estate agent recently. We were looking around a house and it was plain to me, and to him, that the place was not suitable for our needs, so he could afford a little frankness. It was also plainly over-priced - very over-priced at £450K. I asked if they were taking offers, and he said that they'd turned down "several" under £400 - he said it in tones that suggested that the vendor was not in touch with the real world of house selling in 2009, but there was nothing he could do about it. (Vendor had already moved out, and was considering letting it - he needed to spruce the place up for that, as well.)

So I chatted to him a bit about the local housing market, and he said that they were getting sales very quickly - as soon as people reduced their prices to 20%-ish below peak. This seems to match what I have observed, and other reports from here - realistic price, good-ish house = SALE! (imagine ker-ching sound effect).

Though, once again, you have to add in the need for an "equity-rich" buyer, as the RM commentary says, as the pool of cash-buyers will slowly diminish. Still, for the moment, accepting the price reduction when you're selling, and bargaining for it when you're buying sounds like a solid strategy to me.

db

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