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scepticalEA

I Think The 'crash' Has Been And Gone...

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I have been lurking on this site for a couple of months now on and off, and thought some of you guys might be interested in an EA's take on things.

From what I can see, day to day, business is still very good- our numbers are up on what we have done for the last two years and we are making a tidy profit.

In the last year or so I have noticed a gradual dip in house prices in my area- not a huge drop, but a drop none the less. The properties that are moving quickly now are on average 10 to 15k less than this time last year. In my position as a valuer, I am having to go out and try to impress on prospective vendors the fact that their property is worth less than this time last year-not easy when my competition are happy to tell people exactly what they want to hear. Contrary to popular belief on this site, EA's don't have any intrest in ramping up prices- what matters to me is getting a lot of units shifted regardless of what price they are at!

My feeling is that the smart EA's and vendors have identified this small dip in the market- getting properties on at the right price is key now to getting them sold quickly. The market is very very busy at the moment- not at all as bad as what you would think from reading some of the posts on here!

From my humble perspective, a crash in price can only happen if people stop buying houses- please correct me if i'm wrong but that is how I see it! I feel that those of you who are praying for a crash will be sorely disappointed- we have/are currently coming through a small correction in prices but i honestly can't see any 30%+ drops coming!

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From my humble perspective, a crash in price can only happen if people stop buying houses

Come on, you know that transaction levels have pretty much halved compared to last year.

And how many FTBs are round your way (and by that I mean young couples/families buying for the first time and not "returners") ?

Average Terraced house in Huntingdon - £130,201. An average FTB salary is not £37,200.

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I see this is your first post!

Welcome to HPC.

I find your post both refreshing and a little brave.

I do have to say I disagree with you view that the dip is over.

As you rightly point out, it is volume of sales and not prices that keep you in business.

I believe you will find that you will have to keep on chipping away at the sales prices to keep those volumes up. (Just like the early 1990s)

Prices will therefore continue to fall. Maybe not a crash but I believe the market will be subdued for several years.

There will be the odd monthly blip (during Autumn and Spring?) but the general trend is down IMO.

Hope you don't get too much flak off some of the regulars on here...

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I have been lurking on this site for a couple of months now on and off, and thought some of you guys might be interested in an EA's take on things.

From what I can see, day to day, business is still very good- our numbers are up on what we have done for the last two years and we are making a tidy profit.

In the last year or so I have noticed a gradual dip in house prices in my area- not a huge drop, but a drop none the less. The properties that are moving quickly now are on average 10 to 15k less than this time last year. In my position as a valuer, I am having to go out and try to impress on prospective vendors the fact that their property is worth less than this time last year-not easy when my competition are happy to tell people exactly what they want to hear. Contrary to popular belief on this site, EA's don't have any intrest in ramping up prices- what matters to me is getting a lot of units shifted regardless of what price they are at!

My feeling is that the smart EA's and vendors have identified this small dip in the market- getting properties on at the right price is key now to getting them sold quickly. The market is very very busy at the moment- not at all as bad as what you would think from reading some of the posts on here!

From my humble perspective, a crash in price can only happen if people stop buying houses- please correct me if i'm wrong but that is how I see it! I feel that those of you who are praying for a crash will be sorely disappointed- we have/are currently coming through a small correction in prices but i honestly can't see any 30%+ drops coming!

An interesting post and I think it took some courage to post that.

Would I be right in assuming that your prediction is based both on recent history and current trends?

I don't think anyone on here would disagree that the current situation is that of reasonable activity. a slight dip in house prices and some EA's still over pricing property to please the vendor.

However, what is critical to the housing market is

a) the economy and

B) pubic confidence

We don't really know if these will change/stand still over the next 12/18 months but I think it is fair to say that the people on here who are calling a HPC are doing so based on the assumption that both a & b will changed in the near future.

I think that assumption is based on reasonable evidence but only time will tell...what I think is certain is that we can not predict that people will keep buying houses just because they are at the moment.

Edited by 2005

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Welcome to the site. Your perspective is very welcome whatever flak you take.

Can I be cheeky and ask how old you are? were you an EA during the last crash?

How about this as a theory. Your properties at less than the local market average are selling, your competitors are not. Your competitors might then convince their vendors to drop their prices to compete with your sales success.

What will you do then, the buyers will still be looking for a bargain.

You only have one choice. Drop your prices another 10-15% to maintain your sales advantage.

Hold on, by next year thats a 20-30% drop on last year. You have got a 30% drop in prices. check out some of the historical threads its exactly how it happened last time. No one woke up and found that their house was suddenly worth 40%, it's insidious.

Good to hear an industry take on things. Hang on in here.

Edited by uro_who

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My feeling is that the smart EA's and vendors have identified this small dip in the market- getting properties on at the right price is key now to getting them sold quickly. The market is very very busy at the moment- not at all as bad as what you would think from reading some of the posts on here!

From my humble perspective, a crash in price can only happen if people stop buying houses- please correct me if i'm wrong but that is how I see it! I feel that those of you who are praying for a crash will be sorely disappointed- we have/are currently coming through a small correction in prices but i honestly can't see any 30%+ drops coming!

Since 2004 prices went up here but have fallen back slightly on some properties. Some local estate agents are pricing at 2004 levels and stock is shifting. Anything which is just overpriced is not shifting, buyers are very price sensitive.

Crashes don't happen overnight, it takes years and I think this one may be a very long drawn out affair.

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Guest Bart of Darkness
From my humble perspective, a crash in price can only happen if people stop buying houses

People have never stopped buying houses yet we still had a crash in 1989-1994.

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From my humble perspective, a crash in price can only happen if people stop buying houses- please correct me if i'm wrong but that is how I see it! I feel that those of you who are praying for a crash will be sorely disappointed- we have/are currently coming through a small correction in prices but i honestly can't see any 30%+ drops coming!

Excellent! This site needs sensible bulls.

You said the market is busy:

How many FTBs have you seen lately in your business?

What houses they are buying (price range) in your area?

How far do they stretch themselves relative to their incomes in your opinion?

Are they more/less confident in doing so then a year ago?

Cheers

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Im afraid, it really is a case simple Economics:

Demand exceeds supply = Prices Up

Demand meets supply = Prices stagnate

Supply Exceeds demand = Prices drop

Wait and see for the current effect of oversupply!

I've read through my property guide today in the local rag. My!, it aint half heavy today!. One thing that makes me laugh is i see quite a few semis are now on offer at a price the same as many crappy 2-bed starter terraces. A sign of Prices falling from the top down perchance??

I feel sorry for anyone who buys such a crap terrace at such a crap price, in years to come, they will yet again, become unsellable as first time buyers skip the first few rungs of the ladder, the peak-buyers being in negative equity. Better hope the BTL brigade are around at that time to mop up the mess! :ph34r:

Edited by A Fool & His Borrowed Money

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Come on, you know that transaction levels have pretty much halved compared to last year.

You would be suprised- I can honestly say that my office has sold 30% more YTD!

And how many FTBs are round your way (and by that I mean young couples/families buying for the first time and not "returners") ?

Off the top of my head, out of 6 sales in the last two weeks I believe there were three FTB's in there.

Average Terraced house in Huntingdon - £130,201. An average FTB salary is not £37,200.

Very true! I won't argue with the fact that it isn't easy for a single person to get on the ladder at the moment, and most, if not all, of the FTB's about are couples- £37,200 is a lot for one person to earn, but very achievable for a couple

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Welcome to the site! I am a bit of a lurker but it's good to hear from the dark side, especially if you can resist gloating and bear baiting. If you can stay civil then I hope everyone here can manage the same and it will be good to get a bit of variety :)

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Why do some of my letters come out like smilies?

Some smilies are just two-character sequences - and this one B) sometimes crops up in lists ...

;) ;), :), :):o :o, :( :(, :P :P, B) B)

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Excellent! This site needs sensible bulls.

You said the market is busy:

How many FTBs have you seen lately in your business?

What houses they are buying (price range) in your area?

How far do they stretch themselves relative to their incomes in your opinion?

Are they more/less confident in doing so then a year ago?

Cheers

I can get you a more precise figure tomorrow, but I would say that there are probably about 40ish FTB's looking with us at present. Generally they are tending to go for properties on the Oxmoor estate- not the best area in the world, but not the worst either, and you can pick up a reasonable two bedroom mid for £105,000 ish. Income multiples wise, on average I would say that we are tending to see about 4 - 4.5 times income with most FTB's. With regards to buyer confidence, it is pretty unusual for some one to stop looking due to any worries about the market, so it can't be too bad!

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Some smilies are just two-character sequences - and this one B) sometimes crops up in lists ...

;) ;), :), :):o :o, :( :(, :P :P, B) B)

Ahh thanks for that...I have a habit of putting things into lists e.g a) etc... must try and keep an eye on the smilies :rolleyes:

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I can get you a more precise figure tomorrow, but I would say that there are probably about 40ish FTB's looking with us at present. Generally they are tending to go for properties on the Oxmoor estate- not the best area in the world, but not the worst either, and you can pick up a reasonable two bedroom mid for £105,000 ish. Income multiples wise, on average I would say that we are tending to see about 4 - 4.5 times income with most FTB's. With regards to buyer confidence, it is pretty unusual for some one to stop looking due to any worries about the market, so it can't be too bad!

Welcome scepticalEA,

I assume your area is Huntingdon, Cambridgeshire (correct me if i'm wrong)

I have checked the land registry (all sales):

2004 Q2 - 3,278

2005 Q2 - 2,525

So house sales are down 23% in your area!

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May I remind you of the most important factor...its called affordability. The continued house price increases are therefore unsustainable.

Absolutely agree buddy- it isn't sustainable for prices to go up indefinately, hence why they have slipped a touch over the last year. I don't see, however any catalyst for them to come down- affordability is something which gets quoted a lot on this board, but unrealistic expectations are more of a problem than affordability. I would love to buy a big four bedroom house with en-suite, double garage etc. but I was realistic enough to see that I dont have any divine right to own a palace- it is something to aspire to undoubtedly, but your first home isn't going to be like that- unless you are very lucky!

Personally, I bought a two bedroom terraced house in a reasonable area for £115,000. 5% deposit down, approx. 4.5 income multiple i believe- it is do-able to buy, not cheap and not easy but each to their own though- there are always going to be people who feel that they are owed something and have un realistic expectations of what their first property will be!

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Welcome scepticalEA,

I assume your area is Huntingdon, Cambridgeshire (correct me if i'm wrong)

I have checked the land registry (all sales):

2004 Q2 - 3,278

2005 Q2 - 2,525

So house sales are down 23% in your area!

No, because the sales from Q2 2005 aren't all available from the Land Registry yet. You can only compare the figure now for Q2 with the figure for Q2 2004 that was being reported in early October 2004. If you don't have that figure, then the data you do have are no use.

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No, because the sales from Q2 2005 aren't all available from the Land Registry yet. You can only compare the figure now for Q2 with the figure for Q2 2004 that was being reported in early October 2004. If you don't have that figure, then the data you do have are no use.

So you saying the land registry amend their data after the reports have been published? I didn't know they did this, I thought the 5weeks delay allowed for the data to be collected. I only thought they delayed sending the info to websites such as NetHousePrices.

Where did you get this information from? I can't find this being mentioned on the LandReg wesbite.

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Refreshing (and very surprising) to see that this person has not yet been toasted. Keep up the good work, fellow HPCers!

I am shocked as well! I wasn't sure whether to make such a controversial 1st post- I was fulling expecting to get slaughtered for it. You are all just pussycats really :P

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From what I can see, day to day, business is still very good- our numbers are up on what we have done for the last two years and we are making a tidy profit.

So you have been having hard times for the last two years or is this just an exceptional month? Suprising business wasnt better during the rises of 2004.

In the last year or so I have noticed a gradual dip in house prices in my area- not a huge drop, but a drop none the less.The properties that are moving quickly now are on average 10 to 15k less than this time last year.

Why do you think that is? Assuming your main reasons may be affordability and interest rates, what interest rate do you think would maintain reasonable house price inflation? Has the quarter point drop been enough?

The thing is, your facts dont seem to tie up. Are you being too hopeful?

Thanks for letting us know that you are selling your properties with a 15k discount. I guess thats why they call Autumn 'the fall'.

;)

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You are all just pussycats really :P

It's Friday night and a lot of people are out, so the forum is quieter.... you could have expected a lot more response on a Monday morning when people will be all at work and in a mean mood. :o:lol:

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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% +
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