PotNoodle Posted October 7, 2007 Share Posted October 7, 2007 House prices: on the edge Last Updated: 10:34pm BST 05/10/2007Page 1 of 2 The property market has ground to a halt in some areas and many sellers are having to slash prices by 20 per cent to drum up interest in their homes, a survey of estate agents conducted by The Sunday Telegraph reveals. Teresa Hunter reports "Even buy-to-let has gone stale, in a normally buoyant students' market. The returns mean that as an investment buy-to-let simply isn't feasible any more." Leigh Bradnick of Englands in the Harborne area of Birmingham says he has a large stock of unsold property which has been on the market for more than six months. "Owners are having to be very realistic about what their properties are really worth." "Price cuts have been substantial, up to 10 per cent," he says. "Many vendors do understand what is going on, and if they want to sell, they have to cut their price. Unfortunately this isn't working either." ================================ These comments, coming from the Telegraph (not the most neurotic of papers, by any means) are, to me, highly significant. Their investigation is fair, logical and organised. They have uncovered a recent situation that Nationwide and Halifax figures simply do not, - as yet - report. As they have also uncovered the real state of the "sub-prime" repossessions in the UK. It seems to me that, as stock market values can rise, rise and rise .... then, so suddenly, change direction and plummet, thus the present housing downturn. As investors are dragged into a seemingly strong upward surge, the ones who really made a profit (from previous lows) are already eyeing the exit door. Even before the bad news arrives (they saw the dark clouds gather on the horizon) ... they are off..... with a slightly reduced profit, leaving the latecomers dithering --- shall I sell, shall I not ? --- as prices tumble downwards. Thus with anyone who has invested in property (as ooposed to buying a house to live in) over the past two (or even three) years. If the Telegraph report is accurate, prices have already eroded back to spring 2006, and are dropping further. Soon, the real value of most houses (outside London and parts of the SE) could be be back to 2005 levels, if present trends continue. Many will be taken by surprise, misunderstanding the true market. Many will dither. But it is already too late -- again, if this report is accurate and trend continues. The market might well have already dropped significantly; the "trigger" that many looked for has not been Interest Rate rises..... it has been ....Sub-Prime/Credit Crunch/Northern Rock/BTL returns/Debt all rolled into one. If it is all true, then many people who thought the Investment Potential of their property was right underneath their feet, supporting them.... will discover that the ground has fallen quite some distance and they are floating on air. But they will not accept the truth immediately. If they have to sell, they will "chase the market down" - always pitching the price just too high... desperately attempting to wring out a profit that simply does not exist. Too late, they will realise that this never was a game for amateurs - the professionals are sitting with cash on the sidelines, watching for the next opportunity to enter the market again. Quote Link to comment Share on other sites More sharing options...
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