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justanewbie

Prices Falling Faster

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"SmellTheFear" made such a valid point on another thread that I thought

it was worth a thread to itself :-

" Purchasers have a choice now and can avoid the worst properties.

Hence the average property that sells now is better quality than a year ago. This means that the drop in prices is actually greater than reported, as we are to some extent comparing apples with oranges.

Houses selling now are both cheaper and better quality. "

1. We are seeing the pick of the bunch selling now..... and prices are not going up.

2. We are seeing middle to higher bracket sales as FTB purchases are low.

Therefore the "average" price should be rising..... and it is not.

3. We are now into September, which ought to be a strong selling month.....

and I bet it won't be.........

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"SmellTheFear" made such a valid point on another thread that I thought

it was worth a thread to itself :-

" Purchasers have a choice now and can avoid the worst properties.

But everyone here is always going on about how property is unaffordable for most people, so you could equally assume that purchasers can only afford the worst and cheapest properties, and those are the ones that are shifting, while the better and more expensive ones languish on the market because no one can afford them.

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But everyone here is always going on about how property is unaffordable for most people, so you could equally assume that purchasers can only afford the worst and cheapest properties, and those are the ones that are shifting, while the better and more expensive ones languish on the market because no one can afford them.

The better and more expensive properties will surely be purchased by second time buyers? FTB have traditionally been the cheapest properties - few first time buyers buy 3 bed semis in perfect condition.

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But everyone here is always going on about how property is unaffordable for most people, so you could equally assume that purchasers can only afford the worst and cheapest properties, and those are the ones that are shifting, while the better and more expensive ones languish on the market because no one can afford them.

I think you have missed the point.

Buyers have a huge choice at the moment.

They are negotiating discounts on the best properties. The rubbish is not selling.

And yet prices are static.

Ergo, the best properties are selling..... and the average house price is the same as a year ago.

That is equivalent to a significant value drop.

Edited by justanewbie

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It’s a bit like buying an old car

If you have 10 cars all the same to choose from only the ones that have no rust will sell, Although you will view the cheap ones first

They all look the same in the pictures and the text always reads the same

But if you were after something special like an estate car then you have less choice and so you have to pay more

Anyone got an old Audi estate that they don’t want as I just sold my BMW to beat the rush

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Yes, this is a good point.

It also reflects my position.

I was seriously thinking about buying last summer.

I've put this off until 2007 now, but I am not expecting to pay less money. On the contrary I am expecting to pay a bit more (with the aditional savings I'd have accrued). Indeed, I am also anticipating buying broadly the same sort of property (2 bed flat) HOWEVER the quality of the flat is where I am looking to reap the rewards of price falls.

I'm being realistic.

A year ago £250k would have bought us a nice 2 bed flat in a good area in North London, but not located in the best place in that area. It probably wouldnt have had an outside space and the kitchen would probably have been small enough to cook in and thats it.

2 years from now, I'm anticipating spending £265K but for that I'll be getting:

Nice 2 bed in one of the best roads in the area, with outside space, kitchen-diner and in very good nick, maybe even share of freehold instead of lease. These sort of flats are on the market for circa £300k at the moment.

They're both flats (2 bed) but in price terms there is probably 30K+ difference between them.

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" Purchasers have a choice now and can avoid the worst properties.

Hence the average property that sells now is better quality than a year ago. This means that the drop in prices is actually greater than reported, as we are to some extent comparing apples with oranges.

Houses selling now are both cheaper and better quality. "

1. We are seeing the pick of the bunch selling now..... and prices are not going up.

2. We are seeing middle to higher bracket sales as FTB purchases are low.

Therefore the "average" price should be rising..... and it is not.

3. We are now into September, which ought to be a strong selling month.....

and I bet it won't be.........

A very good point indeed and backed by what the FT had said in their excellent summary 'House prices are wobbling and have a long way to fall' two days ago.

(The article was on here for a couple of hours but, due to copyright violation, had to be deleted.)

An excerpt of it would go like:

'Some experts even argue that no measure based on house price transactions captures the real extent of the slowdown. Only particularly attractive houses are selling in the current market, the belief has it, suggesting that a 'flight to quality' is hiding the actual fall in house values across the board.'

Seems to be true and makes you think of what might come once all the quality properties have sold at current price level.

Very encouraging.

sceptic

Edited by sceptic

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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