Asking Prices Fall

[Oxfordite]

At the begining of December this house was on sale for £550,000. See attachment.

Its now been reduce today to £520,000. This is one of my bellwethers.

http://www.rightmove.co.uk/viewdetails-925...=1&tr_t=buy

The asking prices seems to be very high in comparison to others in the areas. It looks like he/she is one step behind the market.

Edited February 25, 2008 by Oxfordite

[newbie]

At the begining of December this house was on sale for £550,000. See attachment.

Its now been reduce today to £520,000. This is one of my bellwethers.

http://www.rightmove.co.uk/viewdetails-925...=1&tr_t=buy

The asking prices seems to be very high in comparison to others in the areas. It looks like he/she is one step behind the market.

Assuming it doesn't sell, what do you think will be the asking price:

1) in May;

2) in August;

3) in November?

My predictions are:

1) 500,000 and the realisation that the spring bounce will not be coming this year;

2) 470,000 and acknowledgment that a house price crash is in swing;

3) 440,000 and we have arrived at a 20% fall in nominal terms.

Edited February 25, 2008 by newbie

[Oxfordite]

Assuming it doesn't sell, what do you think will be the asking price:

1) in May;

2) in August;

3) in November?

My predictions are:

1) 500,000 and the realisation that the spring bounce will not be coming this year;

2) 470,000 and acknowledgment that a house price crash is in swing;

3) 440,000 and we have arrived at a 20% fall in nominal terms.

Difficult to call but I don't think you'll be far wrong. I do think the falls will gathers pace though as the crash unravels and people's engrained perceptions change from 'house prices only rise' (gone) 'House prices will stabilise', House prices are going to plummet.

[Telometer]

A reduced asking price does not necessarily represent a hpc. It merely reflects an over-optimistic agent who hoped he could get 10% more than he got last time.

[Oxfordite]

A reduced asking price does not necessarily represent a hpc. It merely reflects an over-optimistic agent who hoped he could get 10% more than he got last time.

Everyone puts their house for sale at say 10% above market price, but they'll reduce the asking price by 'x' amount if the market price reduces by 'x' amount.

I don't remember this happening a year ago.

Edited February 25, 2008 by Oxfordite

[Paddles]

A reduced asking price does not necessarily represent a hpc. It merely reflects an over-optimistic agent who hoped he could get 10% more than he got last time.

A.K.A. "the Foxtons method".

It'll be interesting to see if they are canny enough to be as aggressive on the downward slope - the EAs that are will survive.

[SHERWICK]

A reduced asking price does not necessarily represent a hpc. It merely reflects an over-optimistic agent who hoped he could get 10% more than he got last time.

Retyped: "A reduced asking price does not necessarily represent a hpc. It merely reflects an over-optimistic agent who hoped expected he could get 10% more than he got last time as he has done on every house he has sold in the last 8 years for no particular reason at all"

[IDN]

Assuming it doesn't sell, what do you think will be the asking price:

1) in May;

2) in August;

3) in November?

My predictions are:

1) 500,000 and the realisation that the spring bounce will not be coming this year;

2) 470,000 and acknowledgment that a house price crash is in swing;

3) 440,000 and we have arrived at a 20% fall in nominal terms.

i think you're being a tad optimistic their with your reductions - 440,000 by Nov- i think if that is the case then there could be some decent falls this year- but a number of pundits seem to think maybe 5-8% down this year- i hope you are right though!

[harris]

The house next door sold for £447,000 in Nov 2006.

I'd say that we are talking about over optimistic pricing rather than a real fall here.

On the same vein a house near mine has been on the market since August and the asking price has dropped from £695k to $664k, which sounds a lot until you find out that an identical house 2 doors down sold for £600k last July summer (which I thought they did very well to get).

A lot of vendors expectations are completely over the top meaning that looking at drops in asking prices can give a false picture.

[Griptool]

A reduced asking price does not necessarily represent a hpc. It merely reflects an over-optimistic agent who hoped he could get 10% more than he got last time.

As my sig states my STR completed early Jan 08 at full asking price £38950.00 - The purchaser has now put the house back on the market with the same agent (he's been posted abroad for two years) Asking price is £37995.00.

Looks like the agent is not such an optimist as you say.

[@contradevian]

Bear in mind this kind of property would once have been affordable by a working class family, possibly on a single income, it would now require at least two decent "professional" salaries. Shows how much property in this country is screwed.

[Telometer]

Everyone puts their house for sale at say 10% above market price, but they'll reduce the asking price by 'x' amount if the market price reduces by 'x' amount.

I don't remember this happening a year ago.

But a year ago prices were going up by 10% per month in places like Blackheath. Trust me, I live in SE London, and I sold last June.

So the agents were putting prices 21% more than they were expecting to get - 10% negotiating, 10% more than the last one sold for.

Now they're knocking off the 10% more than the last one sold for, but leaving the 10% negotiating.

[Telometer]

As my sig states my STR completed early Jan 08 at full asking price £38950.00 - The purchaser has now put the house back on the market with the same agent (he's been posted abroad for two years) Asking price is £37995.00.

Looks like the agent is not such an optimist as you say.

You weren't a forced sale. This guy wants his money now - ideally before he leaves the country. Otherwise the house will sit empty. Priced to sell. And the market is not as hot as it was; if they think it's rising they'll pay more than if they think it's not rising.

2.5% reduction for a guy who wants a quick sale is not evidence of a crash.

[Picardy Boy]

At the begining of December this house was on sale for £550,000. See attachment.

Its now been reduce today to £520,000. This is one of my bellwethers.

http://www.rightmove.co.uk/viewdetails-925...=1&tr_t=buy

The asking prices seems to be very high in comparison to others in the areas. It looks like he/she is one step behind the market.

One problem with it is that it's only in "Estate Agents Blackheath" and is actually in Lee Green.

[Guest DissipatedYouthIsValuable]

You weren't a forced sale. This guy wants his money now - ideally before he leaves the country. Otherwise the house will sit empty. Priced to sell. And the market is not as hot as it was; if they think it's rising they'll pay more than if they think it's not rising.

2.5% reduction for a guy who wants a quick sale is not evidence of a crash.

Haven't you got any work to do?

[Telometer]

Haven't you got any work to do?

meeeow!

[Disillusioned]

You weren't a forced sale. This guy wants his money now - ideally before he leaves the country. Otherwise the house will sit empty. Priced to sell. And the market is not as hot as it was; if they think it's rising they'll pay more than if they think it's not rising.

2.5% reduction for a guy who wants a quick sale is not evidence of a crash.

Would you like to give your opinion of what evidence constitutes a crash?

[Griptool]

You weren't a forced sale. This guy wants his money now - ideally before he leaves the country. Otherwise the house will sit empty. Priced to sell. And the market is not as hot as it was; if they think it's rising they'll pay more than if they think it's not rising.

He may well want his money quick but its not a forced sale - He paid cash and therefore has no mortgage to service, as he's going to take a £30k+ haircut on the transaction if he gets the asking price I can only guess he's thinking sell now before its worth even less next month.

2.5% reduction for a guy who wants a quick sale is not evidence of a crash.

He offered on the property in late November when the market was "red hot" [/insert subtle irony smiley], the reality is prices have turned and the crash has begun 100% guaranteed

[beans on toast]

Bear in mind this kind of property would once have been affordable by a working class family, possibly on a single income, it would now require at least two decent "professional" salaries. Shows how much property in this country is screwed.

Therein lies another huge problem stored up for the future - as both *have* to parents work, childcare is affected. You can already see the beginnings of yob culture taking over. No one's at home to bring up the kids propery.

[Telometer]

Would you like to give your opinion of what evidence constitutes a crash?

Well, if 2.5% constitutes the crash, then presumably all the posters here are ecstatic and have gone out to buy houses already...

2.5% is in the rounding. It's the agent's fee. You cannot value an asset like a house to within 2.5%.

I don't doubt that the market is not redhot. But 2.5% isn't a crash.

And remember, there are posts on here going back three years with people claiming the crash has started... when patently it hadn't.

[Disillusioned]

Well, if 2.5% constitutes the crash, then presumably all the posters here are ecstatic and have gone out to buy houses already...

2.5% is in the rounding. It's the agent's fee. You cannot value an asset like a house to within 2.5%.

I don't doubt that the market is not redhot. But 2.5% isn't a crash.

And remember, there are posts on here going back three years with people claiming the crash has started... when patently it hadn't.

Would you care to actually answer my question?

[Telometer]

Would you care to actually answer my question?

I'm not sure I have a personal definition.

2.5% is a rounding error.

10% is a fall that is of significance - probably more than rounding.

25% is definitely a crash. Is 15%?

What about you?

[depaulo]

We have looked at a house in se24 reduced from 825 to 700 and he said he would take 650. Seen another house from 650 to 600 and said they would take offers. Lots not selling (some are admittedly). Where we sold our flat (SW2) am seeing lots coming onto the market and LOTS of reductions. Work in SW19 and the whole place seems to be up for sale. I think things could actually be on the turn here in London!

[Oxfordite]

You weren't a forced sale. This guy wants his money now - ideally before he leaves the country. Otherwise the house will sit empty. Priced to sell. And the market is not as hot as it was; if they think it's rising they'll pay more than if they think it's not rising.

2.5% reduction for a guy who wants a quick sale is not evidence of a crash.

Why do you keep saying a 2.5% reduction when it clearly it isn't?

Never said it was evidence of of a crash. I'd say this is a sign of a market begining to wobble and the realisation by sellers that a recovery isn't around the corner.

I live very close to the property and will be keeping an eye on it for further reductions.

Edited February 26, 2008 by Oxfordite

[gravity always wins]

I'm not sure I have a personal definition.

2.5% is a rounding error.

10% is a fall that is of significance - probably more than rounding.

25% is definitely a crash. Is 15%?

What about you?

Try adding all the costs of purchase and sale in as well. To ignore ALL the costs would be deceitful. Then it feels a bit more crashy doesn't it.

He would have to sell the house at a profit just to break even.