Tuesday, October 19, 2010

Endors Price Too High

Autumn Home Vendors Price Too High

"Prices of homes on the market jumped up 0.5% over the last month but this does not mean that the market has escaped the twin downward price pressures of mortgage rationing and over-supply. This month’s upward movement is largely due to a seasonal surge in properties for sale, placed on the market at overly optimistic prices. However, this is set against a backdrop of increased price-cutting both in frequency and value (a new 20-month record for September). Moreover agents’ sales stock levels are now 16% higher than a year ago and this will only fuel the growing ‘discount culture’ in the UK housing market."

Posted by doomwatch @ 10:57 AM (2045 views)
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10 thoughts on “Endors Price Too High

  • “Since December 09 the monthly total number of properties reduced has increased by a
    mighty 358%. The September total was 93,201, which amounts to 11.5% of the
    entire stock of UK property for sale.
    Discounting, normally the mark of a distressed sale, is effectively being used
    as a marketing tool to attract buyers.”

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  • “Serious buyers know they are few and far between and are looking for a bargain.
    Meanwhile, most sellers are not in a great hurry to sell whilst mortgages remain
    relatively low. By pricing high initially and then moderating the vendors aspirations,
    estate agent negotiators are still able to close a sale in these difficult market
    conditions, but only just…”

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  • Well in my HPC immune area where asking prices are 2007 + the main local agent, despite sending out a newsletter saying everything is rosy, seems to have adopted a policy of bringing a house to market and if not sold within 2 weeks £20k comes off (about 5%).

    Unfortunately for them they still don’t seem to sell. Which is nice.

    The stock level is slowly building.

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  • str 2007 @3. I think the tide is turning outside of high volume churn areas [prime London]. EAs will need to start marking down
    10-20% to get sales sooner than the typical 3 months we’ve seen over this summer. They have to, as they won’t have much working capital left to pay wages, especially the local independents.

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  • It staggers me how some of them round me survive, to the point I’m thinking I should start my own at some point.

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  • They survive because selling property is staggeringly profitable even at low volumes. Their overheads are low & investment minimal to enjoy the kind of fees that other property ‘professionals’ can only dream of.

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  • I (reluctantly) sold to my ex gf and her friend back in 2007 then valued at 225K she put it on the market earlier this year at £240Kwith little or no improvements to it. It did not sell for 4 months and they cut the price £15K.
    They cannot afford to take a loss on the property as they need to put down 25% deposit on any new property so they have taken it off the market waiting for things to improve. This is the situation many find themselves in and why many buyers are stubbornly refusing to drop the price. The estate agent confirmed this on the phone to me and said that most previous ftb now putting there property on the market hoping to upgrade due to extending there family or other reasons refuse to believe that house prices have dpped below what they paid or simply cant afford to move……alot of unhappy folk out there for a long long time me thinks…and looking back i was very lucky although i would not be looking to move anyway it was a home not an investment to me!

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  • Architect

    Welcome

    Yes exactly, when you think what goes on in other shops, you’ve got to sell alot of greetings cards to make up just a single £3k average estate agent sale.

    I estimate it costs about £500 to draw up plans, write description, take photos and place on rightmove, maybe upto £1k but no more.

    Now if you could get sellers to pay that upfront and maybe charge £1500 you’d have a nice little steady business as you’d only attract serious sellers with saleable houses.

    Estate agents would go belly up over night as you’d steal all their cream.

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  • notyethomeless says:

    @str2007 – The email from an EA posted just recently (by Khards I think) was from Hatched of Hitchin, who have a fixed-price model. Costs about £300 to sell online, I think.

    Looks like you might have at least 1 competitor…

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  • I live in Mid-Sussex. Here Agents are pricing well, well above 2007. For example in 2007 a nice 4 bed detached down a well regarded road sold for 590k. A very similar property has gone on for 750k. I know both houses well as I live in that street, Three agents have a virtual monopoly and seem happy for the stock to sit on their books. Eventually, they sell – one recently had been on for 132 weeks.

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