Rush To Sell

[winkie]

Has anyone else made this observation?

Noticed in local rag property pages, high volumes of quality £400k plus properties for sale, haven't seen so many for years. One reason could be the downward trend in property growth.

The best and worst case scenario:

Owner outright cashing in before it's too late on recent rises.

High loan to value, interest only, self cert mortgage payer seeing investment deposit disapearing and turning into negative equity.

Number of thoughts come to mind:

The higher you are the harder you'll fall.

What goes up must come down.

Take the money ( or whats offered ) and RUN.

House price drops will come from the top.

[Guest The dude]

Has anyone else made this observation?

Noticed in local rag property pages, high volumes of quality £400k plus properties for sale, haven't seen so many for years. One reason could be the downward trend in property growth.

The best and worst case scenario:

Owner outright cashing in before it's too late on recent rises.

High loan to value, interest only, self cert mortgage payer seeing investment deposit disapearing and turning into negative equity.

Number of thoughts come to mind:

The higher you are the harder you'll fall.

What goes up must come down.

Take the money ( or whats offered ) and RUN.

House price drops will come from the top.

<{POST_SNAPBACK}>

These knobheads have suddenly realised their predicament. I hope they get screwed....

[Xil]

Has anyone else made this observation?

Noticed in local rag property pages, high volumes of quality £400k plus properties for sale, haven't seen so many for years. One reason could be the downward trend in property growth.

<{POST_SNAPBACK}>

I agree. Suddenly a lot of expensive houses hitting the market.

Generally they are very well maintained, and owned by settled residents rather than the more typical housing estate turnover.

Selling to retire abroad? Last chance to sell for a few years?

They've all left it too late.

I might take a gamble on an 80k house, I wouldn't touch a £400k+ house.

[needle]

What you are looking at is the movement of debt in the economy.

When people are highly indebted, they cannot take on any more - thats why the FTBs have left the market.

Now people higher up the chain cannot "sell" their debt, get some capital and use it as security for a larger debt (ie trade up to a bigger house)

Thats why STR was a smart move - you offload your debt early and take it back on later at a lower price.

Its all about debt.

I agree.  Suddenly a lot of expensive houses hitting the market.

Generally they are very well maintained, and owned by settled residents rather than the more typical housing estate turnover.

Selling to retire abroad?  Last chance to sell for a few years?

They've all left it too late.

I might take a gamble on an 80k house, I wouldn't touch a £400k+ house.

<{POST_SNAPBACK}>

[frugalista]

I agree.  Suddenly a lot of expensive houses hitting the market.

Generally they are very well maintained, and owned by settled residents rather than the more typical housing estate turnover.

Selling to retire abroad?  Last chance to sell for a few years?

They've all left it too late.

I might take a gamble on an 80k house, I wouldn't touch a £400k+ house.

<{POST_SNAPBACK}>

It is the beginning of the great baby boomer sell-off. That huge number of people born between 1944 and 1950 are beginning to retire. They have had a few nice surges of inflation through their lives so they are a few rungs up the ladder. The kids have long left home. The smart baby boomers know they will never again get as good a price for the old family home as now, and are selling to move abroad or downsizing to a much smaller property.

This must be it, surely?

La frugalista

[dipstick]

I think the start of the off-load of the higher price bracket properties began with those with a bit of land. i.e. big house plus an acre upwards. A year ago you couldn't get one for love nor money no matter how big the price tag. Now if you have 500k the world is your oyster and it's been like that for quite a few months now.

My presumption was that not only the debt/fear factor driving the off-load but also the discovery that properties and land such as this actually cost a lot to maintain.

Looking at this thread maybe it is not the case. Maybe we have the higher end of the market trying to off-load due to the reasons mentioned and a drop at the lower end because FTB's can't afford to get on.

Is it a two way push?

[Numani]

It is the beginning of the great baby boomer sell-off. That huge number of people born between 1944 and 1950 are beginning to retire. They have had a few nice surges of inflation through their lives so they are a few rungs up the ladder. The kids have long left home. The smart baby boomers know they will never again get as good a price for the old family home as now, and are selling to move abroad or downsizing to a much smaller property.

This must be it, surely?

La frugalista

<{POST_SNAPBACK}>

this is something I definitely agree with. which is why expensive houses will be under pressure for a longer time period. lots of people if they are forward thinking are bringing their decisions forward by five years or so rather than having to stick around five yrs later hoping prices recover to help fund their retirement.

[A Fool & His Borrowed Money]

the house owners have missed the boat

[leftysmate]

Speaking anecdotely - know of three people at work, two have put their houses on the market in the last 6 weeks or so - one (on for 395K) off to Australia other (on for 450K) wants to buy a project in Tuscany. The third has had his on the market for best part of 12 months now - started at 375K, came down to 350K then 320K just before Xmas. Put a new kitchen in at the start of the year and put the price back up to 350K!! - obviously no takers. Already has a holiday home in France which he reckons he can never use 'cause it's "so fully rented out" and wants to buy another place to retire to nearby. These people are all civil servants (not one myself - am a contractor) of average ability in junior / middle manager rank; all late forties / early fifties.

Last year when was viewing places in North Wales, I'd say 1 in 3 vendors were saying that they were wanting to move to buy a place in Spain, most of the rest saying were downsizing and moving closer to kids / grandkids - can only remember one saying that they were buying larger in the same area - and they were "projecteers" who had already bought the wreck to do up (8 months on still haven't sold tho').

[BoredTrainBuilder]

All of this is fairtly anectodotal . . . any hard figures?

[Nomadd]

I agree.  Suddenly a lot of expensive houses hitting the market.

I might take a gamble on an 80k house, I wouldn't touch a £400k+ house.

You've hit the nail right on the head. Losing 20% off a 80k house you can live with, but off 5 times that amount? Ouch!

The other factor is that no-one has *really* been making any money in the last year (and where I am in London, in the last 2-3 years) so they don't have that 'profit' to push into a new, bigger place. There's still stuff selling around here, but only at the low end of the market. In the £350k+ bracket - which is 85% of the property around these parts, you just see all the same stuff on Rightmove month, after month, after month. The prices of said property are now starting to slide quite significantly - there's only so many times you can chop "10k-20k" off the price before it starts to become significant. Still, hell of a long way to drop yet before they unwind the huge jumps of the last 10 years.

Nomadd

[newbie]

What you are looking at is the movement of debt in the economy.

When people are highly indebted, they cannot take on any more - thats why the FTBs have left the market.

Now people higher up the chain cannot "sell" their debt, get some capital and use it as security for a larger debt (ie trade up to a bigger house)

Thats why STR was a smart move - you offload your debt early and take it back on later at a lower price.

Its all about debt.

<{POST_SNAPBACK}>

Good point! Or, looking at the flip side of the coin, 'it's all about credit'.

[Marina]

There are plenty of younger people (say in their 30s) in 400k places (at least where I live). I would be surprised if they don't have mortgages over £200k. This is an uncomfortable feeling as IRs rise and the world in general (economy, globalization, employment etc) becomes more and more uncertain.

I would think some of them are on the market and keen to move down a bit to reduce their mortgage debt.

[houseinspect]

There are plenty of younger people (say in their 30s) in 400k places (at least where I live). I would be surprised if they don't have mortgages over £200k. This is an uncomfortable feeling as IRs rise and the world in general (economy, globalization, employment etc) becomes more and more uncertain.

I would think some of them are on the market and keen to move down a bit to reduce their mortgage debt.

<{POST_SNAPBACK}>

You gguys are dead right, I live in the south east commuter zone and these is a huge amount of houses on the market over 350k, and a lot of them have been on since before xmas. I know it's sad but i look at rightmove regulary. My mate is an EA in a large branch in a large town in south east. They sold 2 properties in June this year. He tells me that vendors are not re-adjusting prices. More property is coming on to the market, there are no FTBs to start the chains off, where are the prices heading. Figures and graphs are good evidence, but you can't beat a look at what is really happening. Sh*t is about to hit the fan in the second half of the year there is no doubt about it. Agree????

[Ignorant Steve]

You've hit the nail right on the head. Losing 20% off a 80k house you can live with, but off 5 times that amount? Ouch!

<{POST_SNAPBACK}>

No it's all relative - if you can afford (truly afford) a £400K house then losing 20% is bearable.

I've got a 3 string strategy:

1) Buy a sub £500K house which is in decent location and hold for 10 years whilst kids go through primary education. Then trade up accepting whatever the market level is then at.

2) Buy a £700K house now and ignore house prices forever.

3) Rent for a year and buy a £700K house which hopefully has dropped 10 - 15% from the current £800K. Current rental cost is £2700 per month.

Edited July 1, 2005 by Ignorant Steve

[dipstick]

Did anybody hear Steve mentioned the word "dropped"?

Edited July 1, 2005 by dipstick

[Ritters]

Did anybody hear Steve mentioned the word "dropped"?

<{POST_SNAPBACK}>

Yes, and it's echoing in my head still

[Ignorant Steve]

Did anybody hear Steve mentioned the word "dropped"?

<{POST_SNAPBACK}>

Uh?? Don't understand your comment.

I've always said prices will drop - 70% in some areas, but only 5 - 10% in others.

Why would I STR if I don't believe prices will drop.

[echapps]

I agree.  Suddenly a lot of expensive houses hitting the market.

Generally they are very well maintained, and owned by settled residents rather than the more typical housing estate turnover.

Selling to retire abroad?  Last chance to sell for a few years?

<{POST_SNAPBACK}>

Nail, head.

Take a look on Right Move at the interior photos of such houses. Furniture / decore / TV etc. often screams "babyboomers downsizing". Also the length of time these seem to languish on the market. It's not people moving jobs.

[houseinspect]

Nail, head.

Take a look on Right Move at the interior photos of such houses.  Furniture / decore / TV etc. often screams "babyboomers downsizing".  Also the length of time these seem to languish on the market.  It's not people moving jobs.

<{POST_SNAPBACK}>

Dead right

I live in hants/surrey commuter zone. The are shed loads of 400k+ houses on market, most have been there since before x mas. Large agent in large town near me is a friend, they sold 2 houses in june. Only one way for prices to go, but sellers are not adjusting their asking price, more property is coming on market, less FTB to start the chains...............

thanks