Wednesday, Oct 07, 2009

Both Sellers and Buyers Need to be Helped to Understand Market Fundamentals

Estate Agent Today: Low pipelines of business worry agents

"Prices, however, do not seem to be the issue: pipeline business is." Whilst I may not agree completely with that statement does it show a growing understanding by EA's that if they want to stay in business they do actually need to sell a few of the houses that are cluttering up their books? Surely what both sellers and buyers need is not another dose of endless ramping by the press but some help in reaching a clear understanding of some market fundamentals such as restricted lending. Then all they have to do is get their heads round the FACT that lending is not going to return to 2007 levels for a long time to come if ever, Rightmove's latest HPI suggested 10 years to rebuild the banking system , and such things as AFFORDABILITY in relation to ACTUAL wages and we may be getting somewhere

Posted by sybil13 @ 08:44 AM (1328 views)
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12 Comments

1. Neil B said...

Seem like the EA's are cutting their noses off to spite their faces: They would have business if they valued property realistically (and to the same levels as the banks are now doing).

Wednesday, October 7, 2009 08:56AM Report Comment
 

2. tyrellcorporation said...

'Low pipelines of business'?!? Surely the word 'turnover' is perfectly suited here? A88holes!

Wednesday, October 7, 2009 09:33AM Report Comment
 

3. uncle tom said...

Tyrell,

That was my thought also, but after reading the piece, I see the distinction. The number completing the journey of either buying or selling a property are much greater than the number embarking on that journey.

For whatever reason, the number electing to move home at the moment is exceptionally small. Statistically, it's almost as though people buy a house once, and live there until they die.

That implies a pent-up desire by people to move, when market conditions improve. It also suggests a large stock of empty properties, waiting in vain for someone to pay over the odds.

Although very little has appeared in the media, it appears that repo sales have all but stopped. I suspect government interference on that front - 'don't repo until after the election' may be the word from on high..

Wednesday, October 7, 2009 09:59AM Report Comment
 

4. jack c said...

Broken record Jack here - as I have pointed out previously (probably now on too many occasions) the EA's need volume business to survive - the trumpeteting of small month on months price rises of late is definitely not going to keep them in business.

Wednesday, October 7, 2009 10:10AM Report Comment
 

5. tyrellcorporation said...

Definately a declining pipeline sustainability index occuruing in Exeter at the moment. EAs must be experiencing a significant accumulation of solid bodily bi-product in their cotton under-garments!

Wednesday, October 7, 2009 10:10AM Report Comment
 

6. jack c said...

tyrellcorporation - up North they are just sh*****g their pants

Wednesday, October 7, 2009 10:13AM Report Comment
 

7. tyrellcorporation said...

LOL!...spot on Jack.

Wednesday, October 7, 2009 10:26AM Report Comment
 

8. stillthinking said...

The weird thing about estate agents is that you would have thought the only price trumpeting that would increase throughput would be stable prices, anything else putting off either sellers or buyers. I think the reason that estate agents have publicised rising house prices is purely because of new builds as the builders are forced sellers, and they need to encourage the buyers.

For them to trumpet falling prices as a similar appeal to sellers, would need the opposite of the new build effect, and there isn't really an appropriate opposite outside of fantasy (buildings get randomly destroyed).

So whatever the estate agents collective view of where prices go from here, without a new build effect or as new builds slow down, I don't see them in the public domain suggesting realistic pricing. There is nothing they can say that will encourage buyers/sellers together apart from price stability, which is ludicrously unbelievable.

Wednesday, October 7, 2009 10:32AM Report Comment
 

9. mark wadsworth said...

Uncle Tom "repo sales have all but stopped. I suspect government interference on that front - 'don't repo until after the election' may be the word from on high."

There's no secrecy about this. Google the Justice Ministry stat's on repo's, I can't remember the exact figure but they are down by over half since they introduced these new protocols and procedures (delaying tactics) in late 2008, the Scottish govt has gone even further and then there are the taxpayer funded/guaranteed mortgage bailouts, mortgage repayment holidays etc etc.

All the stuff that Greenbay was gambling on working (which I didn't think would work).

Wednesday, October 7, 2009 10:55AM Report Comment
 

10. dbc reed said...

It has often been pointed out that developers keep up prices of new-build by rationing supply: now ordinary punters (aka "hard-working families") are also sitting on the supply of already built houses.Presumably, if all houses came onto the market at the same time,they would be worth next to nothing.So the supply-side solution is:(wait for it) Land Value Tax (or Schedule A or honest non banded Rates like they have in Northern Ireland).Mass building by local and central government of affordable homes to rent to increase labour mobility would n't come amiss either: with the Internet swapping tenancies would be much faster than home sale/purchase giving non homeowners a much needed advantage for once in a lifetime.

Wednesday, October 7, 2009 11:03AM Report Comment
 

11. ontheotherhand said...

Uncle Tom, I'm not sure this 'implies a pent-up desire by people to move'. Whilst there will always be people who have to move for jobs or family changes, it sounds like you propose there is an extra natural state of desire for people to move. Do you think it is natural to all conditions? When prices are rising and homeowners have equity and feel rich, they feel like they are missing out if they don't trade up, and don't care about the transaction costs and stamp duty. Flat or falling markets and people just stay where they are. Don't imagine some clock is running counting up frustrated movers.

Wednesday, October 7, 2009 11:09AM Report Comment
 

12. uncle tom said...

ontheotherhand,

At the present time, sales volumes equate to little more than people buying a home once, and then living in it until they die.

However, as we all know, most people move house a number of times, with varying degrees of urgency.

Breakdown of relationships - financial problems - financial windfall - job relocation - retirement - expanding family - contracting family - onset of disability - or they just get fed up with the house or town they are in - or fall in love with somewhere else..

..and then of course, there is the greed element - the belief that a bigger house will make them richer..

That last factor is much reduced, but the others factors remain, and will become more pressing with the passage of time.

Wednesday, October 7, 2009 02:16PM Report Comment
 

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