Properties Flooding Market

[or in excess of]

It seems to be taken as a given that because a lot more houses are appearing on Rightmove, that prices will fall, due to the laws of supply and demand.I am not so sure. The main driver for this increase in traffic is undoubtedly the removal of HIPS. What i am seeing is a lot more houses coming to market, but at peak 2007 prices. I think a lot of this new blood are timewasters, sorry i meant people "testing the water", who will not accept a penny less than the asking price. If they don`t get it, they take it off. and haven`t lost a penny. If nothing else, HIPS created a barrier for these people, but not anymore.

[Trampa501]

It seems to be taken as a given that because a lot more houses are appearing on Rightmove, that prices will fall, due to the laws of supply and demand.I am not so sure. The main driver for this increase in traffic is undoubtedly the removal of HIPS. What i am seeing is a lot more houses coming to market, but at peak 2007 prices. I think a lot of this new blood are timewasters, sorry i meant people "testing the water", who will not accept a penny less than the asking price. If they don`t get it, they take it off. and haven`t lost a penny. If nothing else, HIPS created a barrier for these people, but not anymore.

Even if they are all "testing the water" it will make a big difference to people's confidence in the market. This is when the slide really takes off - remember there will be sellers who will be desperate to sell as soon as possible.

[lulu]

It seems to be taken as a given that because a lot more houses are appearing on Rightmove, that prices will fall, due to the laws of supply and demand.I am not so sure. The main driver for this increase in traffic is undoubtedly the removal of HIPS. What i am seeing is a lot more houses coming to market, but at peak 2007 prices. I think a lot of this new blood are timewasters, sorry i meant people "testing the water", who will not accept a penny less than the asking price. If they don`t get it, they take it off. and haven`t lost a penny. If nothing else, HIPS created a barrier for these people, but not anymore.

But you are missing that point that whilst there may be many who are simply testing the water there are always many people who for numerous reasons have to sell. If mortgages are harder to come by (and I was in the bank the other day getting a quote and they really are tightening up again) then some people will have to cut the price or they will be unable to sell.

[Sir Sidney Ruff-Diamond]

It seems to be taken as a given that because a lot more houses are appearing on Rightmove, that prices will fall, due to the laws of supply and demand.I am not so sure. The main driver for this increase in traffic is undoubtedly the removal of HIPS. What i am seeing is a lot more houses coming to market, but at peak 2007 prices. I think a lot of this new blood are timewasters, sorry i meant people "testing the water", who will not accept a penny less than the asking price. If they don`t get it, they take it off. and haven`t lost a penny. If nothing else, HIPS created a barrier for these people, but not anymore.

Apart from wasting the EAs' time and advertising space. At some point, a whiff of realism has to kick in where estate agents can no longer afford to advertise properties that sit in their windows doing nothing just to pander to the sellers' egos.

That point in time has already arrived I think.

[@contradevian]

Who are these people that have spare houses, hanging around and not bothered whether they sell or not?

[LianeR]

I originally posted this on the local board yesterday but since it gets as many visitors as Father Christmas in July, here it is for posterity.

_________

Hi, I have been following the market around Chelmsford/Dunmow/S Walden for a few months now via Property Bee. I thought I'd share my observations.

I have seen properties £500k-£700k tend to drop £50k quite quickly (2-4 weeks) - I am guessing they had no interest at all at the original price. One or two have dropped more in one go but were clearly way over-priced compared to the competition.

I am also seeing more and more examples of properties that have been SSTC twice or more, coming back on the market and eventually dropping in price. That to me is the clearest indicator of a bit of a bloodbath in prices at the top end in Essex. After all, if a property has been SSTC more than once at a certain price, it's reasonable to believe that was its market value. So clearly the market has changed in the meantime. This house and this house are good examples.

Another anecdotal - of the 8 quality houses SSTC I have followed closely, the last one fell through and went back on the market this week. And that one I was sure would actually complete. So it appears that of the few houses going SSTC, very little is actually completing right now in this price bracket.

To summarise, I am seeing a massive increase in supply, few completions, lots of sellers' time wasted, 10% cuts on asking prices after a few weeks and evidence of sellers chasing the market down.

/edit: added back in the RM links.

Edited July 18, 2010 by LianeR

[Ponzi]

The frivolous vendors testing the water are playing a dangerous game, as the neighbouring forced seller sets the price in the market in one fell swoop.

Edited July 18, 2010 by Ponzi

[catmandu]

But you are missing that point that whilst there may be many who are simply testing the water there are always many people who for numerous reasons have to sell. If mortgages are harder to come by (and I was in the bank the other day getting a quote and they really are tightening up again) then some people will have to cut the price or they will be unable to sell.

But I think the point Kirsty is making is that these timewasters who are testing the market are not the ones who will cut their prices. In fact, although they are technically selling, they really are contributing nothing to the market dynamics (except perhaps to make the realistic sellers look cheap).

You do have to question whether a seller is genuine if they didn't want to pay a few hundred quid to sell a property for tens of thousands of pounds.

[Mr Yogi]

I was chatting to a local estate agent the other day. He's always been fairly bullish about a 'recovery' when I've spoken to him over the last couple of years but this week he was despondent.

He's got more properties on his books than he can cope with but nothing is selling. The only sales he has had at all in the last few weeks have been probate sales to cash buyers. He told me that if things carry on like this he'll have to shut up shop.

I suggested that an across-the-board reduction in prices would help him. After all, 1% of something is better than 1% of fook all.

His reply surprised me; 'You're absolutely right!'

It is estate agents who will drive asking prices down in a battle for survival.

Edited July 18, 2010 by Mr Yogi

[fadeaway]

I'm noticing more and more reduced houses every day.

The three I've had my eye on for over a month just went from around the 150k figure to roughly 10% off each, and my landlord offered me the house I'm in for 15-20% discount.

[LuckyOne]

I was chatting to a local estate agent the other day. He's always been fairly bullish about a 'recovery' when I've spoken to him over the last couple of years but this week he was despondent.

He's got more properties on his books than he can cope with but nothing is selling. The only sales he has had at all in the last few weeks have been probate sales to cash buyers. He told me that if things carry on like this he'll have to shut up shop.

I suggested that an across-the-board reduction in prices would help him. After all, 1% of something is better than 1% of fook all.

His reply surprised me; 'You're absolutely right!'

It is estate agents who will drive asking prices down in a battle for survival.

Good point.

When inventory is scarce, EAs are force to over-value to get instructions.

When inventory is plentiful, EAs will only accept instructions at a price that have a chance of selling.

The peak plus 10% crowd are actually fulfilling a useful function as they are going to force a change in EA behaviour.

[DisQ]

no matter what they are offered (if they are lucky) or what they want to accept NOW doesn't change the fact that a big huge giagantic crash is just round the corner. How long it was delayed for artifically by our government intervention by such measures as very low interest rates, QE, delaying repos etc however when economy is totally fu*ked, high unemployment & rising (would be historically record high soon), businesses going bust left, right & centre, public sector jobs will go by massive 40% to 60%. Ican't see any amount QE will be able to support a guaranteed inevitable crash, it would be massive by any account, similar to what we are witnessing in USA where upto 90% of the value is wiped off & in certain parts houses are advertised for $10 with virtually no interst!!! Take Irish example where we are seeing a drop of 70% & still falling.

By coming up with statement like that you are just deluding youself, as you have ignored all indicators pointing to a crash above all availability of no credit, which makes it impossible to get a mortgage for those few buyers left in the market. At this point in time we are all witnessing the melt down, stock slide is coming which could change into stock market crash in matter of days & weeks.

Best wishes.

[Mr Yogi]

my landlord offered me the house I'm in for 15-20% discount.

Expect to see more of this.

I bought the house I was renting in 1994 off my desperate landlord. He'd paid over £100k in 1989 but was glad to get shut of it for the value of the outstanding mortgage - £62k - simply to avoid bankruptcy.

How many landlords are in just such a situation today?

[Johnny Storm]

Who are these people that have spare houses, hanging around and not bothered whether they sell or not?

Strangely enough, I am keeping an eye on the market and I am seeing lots of 3 and 4 bedroom detached houses with "no chain" How can this be? I wouldnt have thought these were ideal land lord properties.

I also doubt that the small HIPS cost would stop someone seeing how much a property would sell for.

[MrFlibble]

The sentiment is starting to change, the Halliwide index looks to have painted another top and the media are finding it very difficult to paper over the reality of it right now.

Denial is soon to turn into fear and then the fun will really start

I'm seeing early signs on Properly Snake but the momentum needs to gather a heck of a lot more pace. We need to take out the last low for a start which means a 10% fall is needed just to get back on crash course.

The QE/ZIRP/Stimulus intermission was rather unfortunate but lets hope its worked in our favour. Now prices have pushed back up to stupid levels they will have to fall hard again.

Fingers crossed...

[or in excess of]

The frivolous vendors testing the water are playing a dangerous game, as the neighbouring forced seller sets the price in the market in one fell swoop.

The point i am making, is that a lot of these extra sellers flooding the market, probably have no intention of selling. They are just wasting the agents time and engaging in a spot of fishing. If pushed by the agent, they will just repeat the mantra favoured by timewasters of "we can`t find anything we like, so we`re taking it off the market". By that time, how many would be buyers could have wasted a lot of money on solicitors/ surveys.

[lulu]

The point i am making, is that a lot of these extra sellers flooding the market, probably have no intention of selling. They are just wasting the agents time and engaging in a spot of fishing. If pushed by the agent, they will just repeat the mantra favoured by timewasters of "we can`t find anything we like, so we`re taking it off the market". By that time, how many would be buyers could have wasted a lot of money on solicitors/ surveys.

None, because the prices involved will, more than likely be more than the buyer could afford so they will not bother. They will go to the house down the road with the serious seller who has cut their price to secure a sale.

[Mr Yogi]

The point i am making, is that a lot of these extra sellers flooding the market, probably have no intention of selling. They are just wasting the agents time and engaging in a spot of fishing. If pushed by the agent, they will just repeat the mantra favoured by timewasters of "we can`t find anything we like, so we`re taking it off the market". By that time, how many would be buyers could have wasted a lot of money on solicitors/ surveys.

I repeat, it is estate agents who will drive down asking prices. Timewasters like you describe will find it impossible to find an agent willing to market their property at an unrealistic price.

Competition between agents will be for sales at almost any price; not for instructions.

Us old-timers saw all this happen in the early 90s.

Edited July 18, 2010 by Mr Yogi

[barrabus]

Does anyone out there know how much it cost a estate agent to keep a property on the Right move site ?

[jammo]

It seems to be taken as a given that because a lot more houses are appearing on Rightmove, that prices will fall, due to the laws of supply and demand.I am not so sure. The main driver for this increase in traffic is undoubtedly the removal of HIPS. What i am seeing is a lot more houses coming to market, but at peak 2007 prices. I think a lot of this new blood are timewasters, sorry i meant people "testing the water", who will not accept a penny less than the asking price. If they don`t get it, they take it off. and haven`t lost a penny. If nothing else, HIPS created a barrier for these people, but not anymore.

Kirsty, how are houses coming on to the market at 2007 prices? Houses are valued by estate agents at the point they are put up for sale by a vendor, haven't you seen property porn programmes? It's how it works. They can only come on at 2010 prices surely, unless they are digging out old adverts and just putting them back up in the estate agent's window (and who wants to buy a house that's been for sale since 2007?)

[shindigger]

Expect to see more of this.

I bought the house I was renting in 1994 off my desperate landlord. He'd paid over £100k in 1989 but was glad to get shut of it for the value of the outstanding mortgage - £62k - simply to avoid bankruptcy.How many landlords are in just such a situation today?

Fahsands and fahsands, only they wont care about going bankrupt this time.

In fact they will crave it. The ultimate legacy of Mc **** right there.

[NEO72]

No one even knows whether the flood of new homes is due to the removal of HIPs. It has also coincided with announcements of austerity measures, a certain amount of BTL hammering and a lot of bearish housing news-it could simply be the start of the fear phase.

[Warwick]

I was surprised that the withdrawal of HIPs was given as the main reason for the flood of properties to the market.

As the cost of a HIP was only ~ £400, it means that a lot of vendors do not even have that amount spare at the end of the month.

If correct, the housing market is in an even worse position that I thought.

[@contradevian]

Seeing falls of 17-18% in my part of West Yorkshire. Here is a typical property.

http://www.propertysnake.co.uk/site/detail/30890482

On the market 185 days!

[Mr Yogi]

I was surprised that the withdrawal of HIPs was given as the main reason for the flood of properties to the market.

As the cost of a HIP was only ~ £400, it means that a lot of vendors do not even have that amount spare at the end of the month.

If correct, the housing market is in an even worse position that I thought.

The idea of having £400 spare at the end of each month would be greeted by most of the population with incredulity. I doubt if most households have a tenth of that.