‘Unrealistic’ Sellers Are Stifling Uk Residential Property Market

[The Masked Tulip]

The first linked article mentions housepricecrash and quotes Moonriver:

http://www.mindfulmoney.co.uk/?lid=2672

‘Unrealistic' sellers are stifling UK residential property market, and leaving all-important first-time buyers out in the cold, that's according to the National Association of Estate Agents.

A warning that sellers must lower their asking prices, if the stagnant property market is to receive the kick-start it so badly needs, comes today from Michael Jones, president of the NAEA.

Jones says: "We would like to see more people bring their properties to market. There are two reasons why this isn't happening. First, it's coming close to Christmas and people don't like to uproot their family during the holidays.

"Also, some sellers in our experience continue to have unrealistic expectations over the value of their property. These potential sellers are likely to be holding back in the hope of price rises during 2011."

While 2010 had been heralded as the year in which the housing market could receive the kick-start it so badly needed, just last month the Royal Institute of Chartered Surveyors released its latest UK Housing Market survey showing a stagnating market.

http://www.guardian.co.uk/money/2010/dec/09/property-demand-rises-november-low-prices

Demand for property increased for the first time in four months during November as price falls tempted buyers back to the market, research indicated today.

The average estate agency branch had 241 house-hunters on its books during the month, up from 218 in October, according to the National Association of Estate Agents (NAEA).

But the rise in demand was not matched by an increase in sellers, with the number of people putting their home up for sale dropping for the second consecutive month, leaving the average branch with 64 properties. The dip in sellers is not unusual for the time of year, as people traditionally put off selling their home until after the festive season, as they do not want to disrupt their family over Christmas.

The NAEA said many homeowners also continued to have unrealistic expectations about the value of their property, and were likely to be holding off selling in the hope that prices will rise again next year.

The shortage of buyers relative to stock levels had put purchasers in a strong negotiating position, exerting downward pressure on prices.

Sales levels remained unchanged for the fourth consecutive month during November, despite the seasonal slowdown, with estate agents selling an average of seven properties per branch.

And The Express's take on the same report:

BUYERS BACK ON THE HUNT FOR HOUSES

http://www.express.co.uk/posts/view/216343/Buyers-back-on-the-hunt-for-houses

Edited December 9, 2010 by The Masked Tulip

[@contradevian]

They need to get interest rates up. Might concentrate some minds.

[olliegog]

yep - interest rates should start to edge up to remind sellers that their low tracker rates are not forever and relkying on a spring bounce next year is unwise.

why do people not want to put their house on the market over Christmas period - completion is probably months away even if they sell immediately. Christmas is only one day and life goes on.

[Johnny Storm]

I dont know, surely a lot of people putting their property on at the old (ie big prices) and then seeing no interest at all is a good message to send out?

[Pent Up]

I dont know, surely a lot of people putting their property on at the old (ie big prices) and then seeing no interest at all is a good message to send out?

Yeah but they will just wait (a decade) for prices to recover.

[Pent Up]

And The Express's take on the same report:

BUYERS BACK ON THE HUNT FOR HOUSES

...

Good news, should encourage a few more vendors. I think this years spring surge of new properties will be even bigger than usual. As people put off marketing over the last few months, until next year.

Edited December 9, 2010 by Pent Up

[HovelinHove]

These articles have a couple of very interesting aspects. The first, and most important to me, is the tone the NAEA is taking...sellers need to drop prices (or we go bust). The penny has finally dropped with estate agents that to continue to exist they need to sell properties. If they sell 50% more homes, but at a 20% price reduction, they will make a lot more than they are making now. This combined with the fact that banks are tightening their lending standards on mortgages again and that people need a hefty deposit and that evaluations are coming in low all put real downward pressure on prices from the market makers. The sellers are now out on their own, only a few crazy journalists are still supporting high prices.

The second is the whole christmas thing. I wonder how many heavily indebted families started this year believing things were going to improve, saw prices rising, unemployment stabilise etc, and thought "we can make it through this", especially with low interest rates, but are now seeing prices on the turn again, unemployment about to start rising again, interest rates potentially going up, taxes going up, cost of everything going up, salaries stagnating and they have decided this is the last christmas they can afford in their home "We'll have one more christmas where reality doesn't exist, for the kids, then sell up in the new year and sort our debts before rates rise". I suspect there's quite a few. Christmas is a massive psychological date for families, and people dream of a happy christmas from the moment they board their monarch flight leaving Alicante after their annual two weeks in the sun in August. The election is behind us, hundreds of billions have blown on trying to prop up the economy, and things are not better, they are worse. This Christmas will mark the real capitualtion point as it did in 2007/8, only this time there will be no suckers rally, it will be all the way to the bottom.

[Johnny Storm]

Yeah but they will just wait (a decade) for prices to recover.

Some will. The house I like most has been listed from Jan this year, at £205k. Its now on at £200k. I guess they arent that bothered about selling it. Listed with no chain too. I can see it was bought 10 years ago at £97k. So would taking £175k for it to actually get it sold be so upsetting?

If they are say an old couple wanting to retire somewhere warm, yes they want the most money possible, but I would assume they actually want to be able to leave at some point? Wait 10 years, or take £25k less now?

[Bloo Loo]

its not sellers being unrealistic, they know that Government will cave in and FORCE banks to lend properly again, and they KNOW that if they are a bit short, or indeed, even if the newly endebted FTBS are a bit short, say by losing their job or normal overtime, they can claim up to £6000 per year in benefits to help.

£6000 is the same as the US Government recently withdrew from their own "stimulus" package.

Its about time ours was withdrawn too.

[Pent Up]

Some will. The house I like most has been listed from Jan this year, at £205k. Its now on at £200k. I guess they arent that bothered about selling it. Listed with no chain too. I can see it was bought 10 years ago at £97k. So would taking £175k for it to actually get it sold be so upsetting?

If they are say an old couple wanting to retire somewhere warm, yes they want the most money possible, but I would assume they actually want to be able to leave at some point? Wait 10 years, or take £25k less now?

I agree. House I like has been on the Market over three years! Originally £200k apparently in 2007 but quite ridiculous. Dropped to £185k two years ago then to £165k now OIEO £160k. The thing is you can get a three bed semi 3 times the size for the same amount! Bought for 67k in 1999.

[Bloo Loo]

I agree. House I like has been on the Market over three years! Originally £200k apparently in 2007 but quite ridiculous. Dropped to £185k two years ago then to £165k now OIEO £160k. The thing is you can get a three bed semi 3 times the size for the same amount! Bought for 67k in 1999.

there are 5 houses on my list that were bought by developers early this year. ALL are still for sale.

others are rented.

few actual sellers have sold..on my list.

by the way, for those that recall the change of "SOLD" agency board across the road to me I reported in JULY, white van men are in there the past fortnight, "developing" it right now.

[HovelinHove]

I have 100 houses on my watched list, and many have knocked 10% off since the summer. Some have sold, but not many, I expect to see new reductions after christmas.

[Englaender]

Morning Sibley!

(posted 09.12.10, 1:08am)

IT WAS OBVIOUS.

This was going to happen.

Expect prices to go one way from now on. UP.

[Mrs Bear]

yep - interest rates should start to edge up to remind sellers that their low tracker rates are not forever and relkying on a spring bounce next year is unwise.

why do people not want to put their house on the market over Christmas period - completion is probably months away even if they sell immediately. Christmas is only one day and life goes on.

Yes, that's all true, but I can think of one purely practical reason, esp. when it comes to family houses. Most people are particularly busy with extra shopping/socialising etc. in the run-up to Christmas. The last thing they want is to have to be keeping everything particularly clean and tidy in case an EA rings up saying Mrs X would like to pop round in half an hour.

[Tricksy]

... from the moment they board their monarch flight leaving Alicante after their annual two weeks in the sun in August.

Just wanted to make sure that no one missed you pointing out how different, special and (well let's be honest...) superior you are....!

[The Masked Tulip]

These articles have a couple of very interesting aspects. The first, and most important to me, is the tone the NAEA is taking...sellers need to drop prices (or we go bust). The penny has finally dropped with estate agents that to continue to exist they need to sell properties. If they sell 50% more homes, but at a 20% price reduction, they will make a lot more than they are making now. This combined with the fact that banks are tightening their lending standards on mortgages again and that people need a hefty deposit and that evaluations are coming in low all put real downward pressure on prices from the market makers. The sellers are now out on their own, only a few crazy journalists are still supporting high prices.

The second is the whole christmas thing. I wonder how many heavily indebted families started this year believing things were going to improve, saw prices rising, unemployment stabilise etc, and thought "we can make it through this", especially with low interest rates, but are now seeing prices on the turn again, unemployment about to start rising again, interest rates potentially going up, taxes going up, cost of everything going up, salaries stagnating and they have decided this is the last christmas they can afford in their home "We'll have one more christmas where reality doesn't exist, for the kids, then sell up in the new year and sort our debts before rates rise". I suspect there's quite a few. Christmas is a massive psychological date for families, and people dream of a happy christmas from the moment they board their monarch flight leaving Alicante after their annual two weeks in the sun in August. The election is behind us, hundreds of billions have blown on trying to prop up the economy, and things are not better, they are worse. This Christmas will mark the real capitualtion point as it did in 2007/8, only this time there will be no suckers rally, it will be all the way to the bottom.

Excellent post. Very good point about the penny dropping with the NAEA.

[Mickey]

I agree. House I like has been on the Market over three years! Originally £200k apparently in 2007 but quite ridiculous. Dropped to £185k two years ago then to £165k now OIEO £160k. The thing is you can get a three bed semi 3 times the size for the same amount! Bought for 67k in 1999.

Problem is that depending on the area, £160k might not be unreasonable. I think that in large swathes of Northern England house prices were undervalued in 1999 when prices in London and the South were racing away. I bought a 1930s 3 bed semi for £61k in 1999 and sold for £140k to trade up to a detached in 2009. I first bought as a singleton so you could argue that prices were too low in 1999 after the recession. IMO fair value for the house was around £120k.

Having lived in the North since 1995, I think we are more likely to see a stagnation or drift downwards by another 10-15% than a mega crash. A couple can buy a 4 bed terrace on lowish salaries - although not in the best areas.

[Tired of Waiting]

These articles have a couple of very interesting aspects. The first, and most important to me, is the tone the NAEA is taking...sellers need to drop prices (or we go bust). The penny has finally dropped with estate agents that to continue to exist they need to sell properties. If they sell 50% more homes, but at a 20% price reduction, they will make a lot more than they are making now. This combined with the fact that banks are tightening their lending standards on mortgages again and that people need a hefty deposit and that evaluations are coming in low all put real downward pressure on prices from the market makers. The sellers are now out on their own, only a few crazy journalists are still supporting high prices.

The second is the whole christmas thing. I wonder how many heavily indebted families started this year believing things were going to improve, saw prices rising, unemployment stabilise etc, and thought "we can make it through this", especially with low interest rates, but are now seeing prices on the turn again, unemployment about to start rising again, interest rates potentially going up, taxes going up, cost of everything going up, salaries stagnating and they have decided this is the last christmas they can afford in their home "We'll have one more christmas where reality doesn't exist, for the kids, then sell up in the new year and sort our debts before rates rise". I suspect there's quite a few. Christmas is a massive psychological date for families, and people dream of a happy christmas from the moment they board their monarch flight leaving Alicante after their annual two weeks in the sun in August. The election is behind us, hundreds of billions have blown on trying to prop up the economy, and things are not better, they are worse. This Christmas will mark the real capitualtion point as it did in 2007/8, only this time there will be no suckers rally, it will be all the way to the bottom.

Traditionally Springs bring a huge increase of both sellers and buyers in the market. I can't see any significant reason for sellers to behave differently in 2011, but I think the mortgage scarcity will continue. Hence, prices drops. But by how much? I guess the government/banks/FSA/BoE will allow a cushioned fall. Probable not above 10% yoy?

[headrow]

Excellent post. Very good point about the penny dropping with the NAEA.

It's not an excellent post.

He comes over as a snob.

[The Masked Tulip]

It's not an excellent post.

He comes over as a snob.

http://www.youtube.com/watch?v=w0DUsGSMwZY

[Tired of Waiting]

Problem is that depending on the area, £160k might not be unreasonable. I think that in large swathes of Northern England house prices were undervalued in 1999 when prices in London and the South were racing away. I bought a 1930s 3 bed semi for £61k in 1999 and sold for £140k to trade up to a detached in 2009. I first bought as a singleton so you could argue that prices were too low in 1999 after the recession. IMO fair value for the house was around £120k.

Having lived in the North since 1995, I think we are more likely to see a stagnation or drift downwards by another 10-15% than a mega crash. A couple can buy a 4 bed terrace on lowish salaries - although not in the best areas.

+ 1

I think the south is more bubbly than the North. Good areas will fall more, contrary to the popular view.

[Democorruptcy]

Some will. The house I like most has been listed from Jan this year, at £205k. Its now on at £200k. I guess they arent that bothered about selling it. Listed with no chain too. I can see it was bought 10 years ago at £97k. So would taking £175k for it to actually get it sold be so upsetting?

If they are say an old couple wanting to retire somewhere warm, yes they want the most money possible, but I would assume they actually want to be able to leave at some point? Wait 10 years, or take £25k less now?

What are comparable houses new to the market coming on at?

Where I am renting the houses are all basically the same. The last sale in the street was £195k Dec 2009, the tenant before us bought around the corner for £185k in July. One on his street has come on today at £330k!!! The highest sale in the last 5 years on his street is £235k. There are 3 houses for sale I can see from my window at £200k, £210k and £235k that have been on since we came here in August. That £330k house seems an attempt to make those 3 look cheap.

Edited December 10, 2010 by Redhat Sly

[Tired of Waiting]

http://www.youtube.com/watch?v=w0DUsGSMwZY

Yep. Still going on. I think NIMBYism is just that - vive (keep) la différence.

[dances with sheeple]

It's not an excellent post.

He comes over as a snob.

You pulled me for being a snob the other day? I`m beginning to think you are a twit the sheeple fixation with christmas is pathetic at best, a disturbing insight into tiny brainwashed minds at worst IMO. Christmas is an opportunity for VI`s to part suckers from their cash, nothing more.

[dances with sheeple]

You pulled me for being a snob the other day? I`m beginning to think you are a twa*t the sheeple fixation with christmas is pathetic at best, a disturbing insight into tiny brainwashed minds at worst IMO. Christmas is an opportunity for VI`s to part suckers from their cash, nothing more.