Monday, September 22, 2008

As prices fall, homeowners take houses off market

As prices fall, homeowners take houses off market

The number of houses for sale is expected to fall as the credit crunch sets in and mortgages become more difficult to get

Posted by becky @ 08:29 AM (2127 views)
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21 thoughts on “As prices fall, homeowners take houses off market

  • Ergo, buyers should take advantage of the choice currently available and rush in before supply dries up etc. etc.

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  • Less houses available + no mortgages = less population mobility. Will this lead to people now putting off having children, changing jobs, upsizing, downsizing, buying that new car etc? The UK economy could well now maintain some sort of death spiral holding pattern. Question is, what will come first, recovery or zero altitude?

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  • tyrellcorporation says:

    One thing’s for sure, EAs are doomed in an environment of their own making. The parasite has finally killed off the host!

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  • planning4acrash says:

    Tyrell; Estate Agents did not cause this problem,. They merely got the best for their clients in a ridiculously liquid environment. This was entirely caused by central bankers and complicit politicians who let the money supply go up, with the intention of crashing the system to facilitate deregulation, consolidation and monopolies, and the crash of national sovereign currencies to bring in regional currencies where they do not yet exist, to ensure that people do not set interest rates and M3 growth that suits the people and producing (real) economy instead of bankers and the financial (imaginary) economy. This is the triumph of monetarism.

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  • Good question Renting2.

    I think the answer is another question: What drives recovery? People feeling it is worth working their way out of it because there is a reward in doing so.

    With Gordon in charge, we’re going to be borrowing so much (and already are) that tax is going to zoom upwards. Paying more tax makes people less likely to want to work hard because they see less reward.

    God bless Labour.

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  • Despite the fact that this whole mess is headline news every day, most of us have really only suffered the effects of high inflation to date. I think the number of people severely impacted so far has been limited to those that have been made redundant or been unable to remortgage so seen huge price hikes. Prices will really start to tumble as more people find themselves out of work or unable to find a decent mortgage rate. Fire sales will be the nail in the coffin for prices.

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  • “planning4acrash said…Tyrell; Estate Agents did not cause this problem”. No Estate Agents are ‘ALSO’ part of the problem. When I was to buy mine, some other greedy agent somehow called up the seller to say that he can market and “Guarantee” extra 5K, so I have to withdrew and lose the inital money rather than pay those people extra 5K…. the current agent was saying sorry as he also lost his client ( not sure if he lost any money…)

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  • george monsoon says:

    Selling a house to downsize is vital for people saddled with debt, and hobsons choice for all the 10 million BTL greedy [email protected]@ers that are now watching their assets depreciate..

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  • planning4acrash says:

    George. This bubble would have been pumped up in anycase. It was a choice of the younger generation, a minority of greedy 30-40 somethings or local government built affordable housing. I personally think it great that the younger generation were not sucked in and that, so far, the boom hasn’t been used for a horrendous amount of social housing and big government. Great thing is, that maybe even the greedy minority will now be inable to be sucked into another boom.

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  • I agree with P4AC that EA’s are a much maligned group. We sold to rent last year for an outrageous sum of money, of course the EA helped us ‘maximise’ the selling price and collected her 1.5% plus VAT, but who’s the guilty party here? Me (who got 98.5%) or the EA (who got 1.5%)?

    Anyway, EAs are making money selling houses any more – they’ve all moved into lettings/property management which is a nice steady source of income. Many of those houses not longer up for sale are now ‘To Let’, local estate agents’ windows used to be full of sales – now more than half of properties are ‘To Let’, “until the market recovers”, snigger, tee hee etc.

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  • Another comedy piece from the Times. Get some of the quotes: “The capital value may have gone down a bit, but it is up 100 per cent on five or six years ago.”; “The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets.”

    p4c: I agree with what you say except for the “intention to ..” bit. Even if the bankers, etc were nefarious enough to want to do this, I doubt they would have the ability to do so. As you say, ineffable visceral greed is what it’s all about. Not sure they are a minority either.

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  • Tyrell; I agree, i have stood in estate agents during the boom and heard them say to customers add another 10k or 20k to price someone will snap it up then, rather than really saying if we hike up price we get more commission….. if we didnt have estate agents then who would push up prices? They should be made to work for a set fee no more % of selling price………..

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  • Come on guys, EA’s are just sharp opportunists – they are not, however, the root of the problem, which is excess liquidity brought about by the over expansion of credit in a fiat system. EA’s are responsible for a lot of things, but not a corrupt banking system.

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  • I can see this whole industry being shaken up – in the same way that the recruitment industry has been. Rightmove, Primelocation etc. will take over from the EA’s in the same way that the job-boards have taken over from recruitment agencies. It’s the shop-window that will become the valuable piece of the service and the online providers have that already. They have never provided an EA service to sit alongside because that would be ‘biting the hand that feeds them’. But as more and more EA’s go under, the chances of the industry becoming obsolete in its current format increase. I think we’ll end up with a couple of services being offered; you either pay a fixed fee for advertising only and you manage the process yourself, or you pay more and they will do the whole valuation, negotiation etc.

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  • Bricksnmortarhaha says:

    beartil2010 – you have pretty much summed up how I feel. I’ve always worked hard but now I just feel ‘what’s the point?’. Gordo has already increased taxes on small businesses like mine – though not the big corporates, of course. Now I face the prospect of the government getting its hands on even more of my hard-earned cash. I should have bought a house and just lived on the MEW money these past few years.

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  • Tyrell is right on one point…. there is no apostrophe in “EAs”!

    The EAs aren’t to blame, they are a symptom of the bubble rather than a cause. Most of the time they aren’t pushing prices up; in fact an estate agent gains much more commission from selling two houses at 90% of value rather than one house at 110% of value. They will happily talk down your price just to make a quick sale; rather than having overvalued properties languishing on their books.

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  • Mark @ 10.29

    Interesting point about houses being withdrawn from sale to let.

    There wasn’t as much letting going on in the last recession. Assuming people can get a let for a house they bought 5-10 years ago, they could afford to drop the rental rate quite a way to get a sensible return on the size mortgage they have.

    Could this recession/HPC be different to others in that there is a bigger rental sector. Could this be a trend in unintentional landlords accepting lower rents that current market and not actually needing to sell at below peak prices ?

    Could this practice halt or at least slow the headline house price falls ?

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  • What’s the real root of the problem? Our banking system is a system, nothing more. It can’t make banks lend to people who can’t pay back, nor can it make us take out mortgages. Only our greed as a society can make us do that.

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  • Shipbuilder

    Fear of not being able to afford a family home next year because of other peoples craziness/greed can also be a strong motivator to go against ones gut feeling.

    For these people I feel very sorry as they’ll be the most stretched, least greedy and less likely to survive what’s coming.

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  • str 2007 – everyone must share the blame for this, or we will never learn from it. Every finger pointed is an attempt to shift blame, usually from oneself.
    It’s not as if this was a disaster that we all saw coming but were powerless to stop because of the evil elite foisting it upon us. We welcomed it, we celebrated it, we ignored the consequences. It will be exactly the same when we realise how much we have screwed the environment, but unfortunately there will be no coming back from that one.

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  • Shipbuilder
    Well I saw this coming from a long time ago, in fact as far back as 2001 I was beginning to think things were getting a little heated, action should have been taken back then. I never celebrated high house prices either as I could see the folly of the gap widening between me and my next move.
    The blame lays fair and square with 1/ the fsa, 2/ the government & 3/ financial institutions. Estate Agents are merely unscrupulous parasites as are BTLers. EAs should have tighter regulations and BTLers shouldn’t be allowed to (not in it’s present form anyway)..

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