Gloom As Houseowners Must Reduce Prices By 10%

[Realistbear]

http://www.telegraph.co.uk/finance/personalfinance/8000177/Home-owners-must-reduce-prices-by-10pc-to-sell-properties.html

Home owners

must reduce prices by 10pc

to sell properties

Home owners must accept offers of 10 per cent below the asking price to sell their properties, warn estate agents who are the gloomiest they have been about the housing market for 18 months..../

Howard Archer, of economists Global Insight, said: “

This mortgage data for July remains very low compared to long-term norms

and does little to dilute suspicion that house prices will remain under pressure.

“It is also notable that

mortgage approvals to first time buyers actually weakened in July

, which suggests not only that they may be becoming more reluctant to move into the housing market in the current uncertain economic environment. It also suggests that first time buyers are finding it hard to get mortgages.”

Nicholas Leeming, of property website Zoopla.co.uk, said: “A crucial indicator of the health of the housing market is activity by first time buyers.

The lack of attractive mortgage deals, combined with uncertainty around the economic

I will show some serious interest at a 20% reduction on top of the already 10% drop around my way.

[Pent Up]

10%? good luck... I'd say 20% if you don't want to chase the Market down. 4 bungalows near me have had 35% reductions a couple of months ago (investor baling out) only one had sold.

[Kyoto]

The Gloom, the Gloom, the terrible Gloom. I can feel it enveloping me.

NOT.

[non frog]

.....

I will show some serious interest at a 20% reduction on top of the already 10% drop around my way.

You're the problem then aren't you? You and many others are putting a bottom under the falls. If the current (asking) prices are peak and you think a 20% drop is OK then the market is back to 2005 levels - or about 20% overvalued.

Let's have a good old 50% or more. I might even "invest" at that level myself

[exiges]

You're the problem then aren't you? You and many others are putting a bottom under the falls. If the current (asking) prices are peak and you think a 20% drop is OK then the market is back to 2005 levels - or about 20% overvalued.

Let's have a good old 50% or more. I might even "invest" at that level myself

Agreed.

Thing is, yes, some people are going to have to accept 10% or more, but in my view the bulk of vendors are seeing a 1-2% reduction as a "massive drop" for them.

Hopefully when we enter the fear phrase people will be offloading "at any cost" to get out before the market falls through the floor.

Edited September 14, 2010 by exiges

[Reluctant Heretic]

http://www.telegraph.co.uk/finance/personalfinance/8000177/Home-owners-must-reduce-prices-by-10pc-to-sell-properties.html

Home owners must reduce prices by 10pc to sell properties

This is turning out to be such a good day. It is the duty of the savvy to make low offers (though not ridiculously low - you don't want to get a reputation for being a mickey-taker). I'm off to make my low offer today - although I don't actually make an offer I just say that what I might offer and ask them to keep me informed.

Edited September 14, 2010 by Reluctant Heretic

[Lepista]

This is turning out to be such a good day. It is the duty of the savvy to make low offers (though not ridiculously low - you don't want to get a reputation for being a mickey-taker). I'm off to make my low offer today - although I don't actually make an offer I just say that what I might offer and ask them to keep me informed.

My folks bought their home in 1979, and put in an offer of 1/3 less than asking.

The vendor accepted.

Makes 10% below asking seem tame, and 50% not out of the bounds of reality.

[Tenubracon]

From the Independent:

house-prices-slide-as-banks-reject-firsttime-buyers

and the Guardian:

end-of-the-housing-ladder

Plenty to chew on here!

Edited September 14, 2010 by Tenubracon

[Home_To_Roost]

From the Independent:

house-prices-slide-as-banks-reject-firsttime-buyers

and the Guardian:

end-of-the-housing-ladder

Plenty to chew on here!

Fookin hell .... the fear phase hath begun

[koala_bear]

From the Independent:

house-prices-slide-as-banks-reject-firsttime-buyers

and the Guardian:

end-of-the-housing-ladder

Plenty to chew on here!

A beautiful quote from the guardian:

"The last helicopter is leaving Saigon, and lots of people who thought there was such a thing as a housing "ladder" – a ladder that always goes up, rather than toppling down a ravine while their legs pump uselessly, Wile E Coyote-style – are starting to think there won't be room inside for everyone."

and another:

"House-price money may be largely imaginary – bank-bound, tied up in value estimates and equity balances – but the anxiety is real. "

Edited September 14, 2010 by koala_bear

[The Masked Tulip]

A beautiful quote from the guardian:

"The last helicopter is leaving Saigon, and lots of people who thought there was such a thing as a housing "ladder" – a ladder that always goes up, rather than toppling down a ravine while their legs pump uselessly, Wile E Coyote-style – are starting to think there won't be room inside for everyone."

and another:

"House-price money may be largely imaginary – bank-bound, tied up in value estimates and equity balances – but the anxiety is real. "

The Guardian article is very interesting.

[Mega]

once people SUSS that they save a forture by simple waiting a year or 2 or 3 & with rates rises arrive, the "Party" will have started BIG time!

Mike

[Confounded]

Agreed.

Thing is, yes, some people are going to have to accept 10% or more, but in my view the bulk of vendors are seeing a 1-2% reduction as a "massive drop" for them.

Hopefully when we enter the fear phrase people will be offloading "at any cost" to get out before the market falls through the floor.

We are in the fear phase, I believe it started in July this year.

It is an early call but I believe the fear phase has just started. Of the areas I monitor a dramatic change in the market has occurred in the last month. Several of these markets fall into the hot market category where they nearly erased 2008 falls by early summer.

With the new coalition showing little sign of wanting to falsely support the market it looks like the final phase of the healing process has begun.

[Reluctant Heretic]

My folks bought their home in 1979, and put in an offer of 1/3 less than asking.

The vendor accepted.

Makes 10% below asking seem tame, and 50% not out of the bounds of reality.

It was a very savvy move by them - you have to make your judgements based on the mood at the time. I know that the EAs would just stop talking to me if I did that without a good reason.

[Si1]

there'll be a little bounce at some point and we'll all start getting depressed again before it falls again etc.

[jaynewcastle]

the problem is that most people don't have to sell, & will keep it on the market, rather than accepting a huge under asking price offer. Its what happened in 2007/08

[RufflesTheGuineaPig]

the problem is that most people don't have to sell, & will keep it on the market, rather than accepting a huge under asking price offer. Its what happened in 2007/08

In 2007/2008 we had plummeting interest rates. They were only able to do that once. Mortgage rates are slowly returning to "normal"... up toward 7-8%. They have simply diverged from the bank of England rates.

And there are always people who have to sell. The banks can't keep buying up their own repos forever.

Eventually the tides goes out...

[VeryMeanReversion]

In 2007/2008 we had plummeting interest rates. They were only able to do that once. Mortgage rates are slowly returning to "normal"... up toward 7-8%. They have simply diverged from the bank of England rates.

HSBC lifetime tracker special at base+1.69% = 2.19% with £99 fee for LVT<60% says otherwise.

[Si1]

the problem is that most people don't have to sell, & will keep it on the market, rather than accepting a huge under asking price offer. Its what happened in 2007/08

doh!

[Bruce Banner]

the problem is that most people don't have to sell, & will keep it on the market, rather than accepting a huge under asking price offer. Its what happened in 2007/08

That's fine by me, I don't have to buy either and I certainly won't until prices have fallen by at least 30% and when they have, as a cash buyer, I'll offer 10% below asking .

[Pent Up]

the problem is that most people don't have to sell, & will keep it on the market, rather than accepting a huge under asking price offer. Its what happened in 2007/08

Yep true. Not all vendors have to sell. But many of the properties on the Market at tar moment are those who took it off in 07/08 hoping for higher prices. Well three years later and they are getting desperate and don't want to have to wait three more years now it looks like prices will again!

It's the pent up supply coming onto the Market. Causing a rush to sell the exact opposite of 07/08

The other thing is prices plummeted 20% before enough people had taken their houses off the Market to restrict supply enough to prevent the decline and as previously stated this was supported by falling rates. There's nothing to stop it this time!

[Si1]

HSBC lifetime tracker special at base+1.69% = 2.19% with £99 fee for LVT<60% says otherwise.

but how many people, in any way, post-credit crunch, will benefit from that?

I will and many other HPCrs will, handy really, but the margins of the market will pay much higher rates

[sossij]

the problem is that most people don't have to sell, & will keep it on the market, rather than accepting a huge under asking price offer. Its what happened in 2007/08

Not that old chestnut.

If a house isn't sold then it isn't in the market. Only those that sell set the market rate. There will always be someone who has to sell (death, divorce etc) and they will set the market price, regardless of what anyone thinks their house is worth.

[RufflesTheGuineaPig]

HSBC lifetime tracker special at base+1.69% = 2.19% with £99 fee for LVT<60% says otherwise.

"LTV<60%" says it all really.

[Game_Over]

HSBC lifetime tracker special at base+1.69% = 2.19% with £99 fee for LVT<60% says otherwise.

This tells me that HSBC are expecting base rates to rise significantly in the next few years

fixed rate deals are around 6%

And both these figures reflect the average for interest rates over the long term of around 5%