House prices 'see first double-digit fall'

StevieJ

Generali wrote: »

But surely the market is just doing what it does: finding a price at which sellers will sell and buyers will buy.

You may not like the results that it comes up with but they are normal for now.

True, most of the potential sellers have decided that thay are not going to sell.

Fergie73

Only problem is houses near me are just being withdrawn from the market, sellers who dont need to sell wont drop their prices

But the prices are set by those who do sell, so those who decide they don't need to and take their places off the market are utterly irrelevant.

If volumes of sales have dropped off massively, then that leaves buyers free to cherry pick the cheapest, which are the forced sales, the auction properties, the "motivated" sellers who are willing and able to drop their prices.

On the way up it was the same thing but in reverse - few houses were coming onto the market (as those with property wanted to keep it because it was rising), and the investors and those willing to take huge debts were paying daft prices, so those prices set the market values. On the way down, in a buyers market, the cheapest will set the values. Those taking their houses off expecting a recovery will be fine if they don't need to sell for years yet, but if they're hoping it'll recover in a few months, they're likely to be disappointed.

EdInvestor

Generali wrote: »

But surely the market is just doing what it does: finding a price at which sellers will sell and buyers will buy.

You may not like the results that it comes up with but they are normal for now.

It's a bit like what happens in the stockmarket between Christmas and New year.Most investors are on holiday and thus not active in the market.There may be a few traders about, and some activity from overseas.This can cause wild swings up and down in some share prices as the market is so thin that even someone making a small purchase can have an visible impact. Bargains can be had in these thin markets of course, but when the mainstream players return, prices will return to what they regard as normal.



Someone commented the other day BTW about mortgage costs 10 years ago as if they should be regarded as the norm.But as the graph shows, this was at the bottom of the huge price over-correction we saw last time.(Yields on letting property reached as high as 20% in some areas, as clearcut a sign of an oversold market as anyone could want). The long term price trend is represented by the red line.

Leodogger

There is also another group of people who let their houses sit on the market and won't drop the price. Like us they may be intending to sell up and move abroad. Problem is the property prices may be dropping here but might not be where you are moving to and they may not be able to bridge the gap in price difference. Also if like us you had budgeted to be able to live off the capital difference between the two properties (one here and one abroad), and you are retiring so no way to work and pay the price difference, you have no choice but to let your house sit on the market until you get the price you need or wait until the market drops in the country you want to buy in.

In our case we were going to sell up and buy a mobile home in Spain. However new property developers, even on mobile homes, are reluctant to drop the prices of new manufactured homes. In actual fact there does not appear to be many in the UK who are prepared to build houses and ask lower prices (11% cheaper, if they compare with the property price drops of the last 12 months). So contrary to public thinking, not everyone is in a position to drop the price of their house even if they wanted to.

Some do have a choice to drop the price of their house if they are moving upmarket and I can see the wisdom of doing that if you can negotiate the appropriate drop with the one you are buying but all First Time Buyers should not assume there is going to be a widespread killing to be made.

Remember in most cases your house is your only asset and having worked all your life to own your own house (me and my husband have paid mortgages for 38 years ), you have to make sure when you reach middle age or coming up to retirement that you maximise on its return especially as pensioners in the UK are the poorest in Europe by a long way thanks to the UK Government!

WTF?_2

JWhite wrote: »

There is also another group of people who let their houses sit on the market and won't drop the price. Like us they may be intending to sell up and move abroad. Problem is the property prices may be dropping here but might not be where you are moving to and they may not be able to bridge the gap in price difference. Also if like us you had budgeted to be able to live off the capital difference between the two properties (one here and one abroad), and you are retiring so no way to work and pay the price difference, you have no choice but to let your house sit on the market until you get the price you need or wait until the market drops in the country you want to buy in.

In our case we were going to sell up and buy a mobile home in Spain. However new property developers, even on mobile homes, are reluctant to drop the prices of new manufactured homes. In actual fact there does not appear to be many in the UK who are prepared to build houses and ask lower prices (11% cheaper, if they compare with the property price drops of the last 12 months). So contrary to public thinking, not everyone is in a position to drop the price of their house even if they wanted to.

Some do have a choice to drop the price of their house if they are moving upmarket and I can see the wisdom of doing that if you can negotiate the appropriate drop with the one you are buying but all First Time Buyers should not assume there is going to be a widespread killing to be made.

Remember in most cases your house is your only asset and having worked all your life to own your own house (me and my husband have paid mortgages for 38 years ), you have to make sure when you reach middle age or coming up to retirement that you maximise on its return especially as pensioners in the UK are the poorest in Europe by a long way thanks to the UK Government!

By all reports, the house market in Spain is even more trashed than the UK one so you could pick up a house or apartment for a lot less than your house sales price here and have a nice amount left over. If you are stuck on getting a mobile home (do you mean an RV type thing?) you should still be able to get one and have a comfortable wedge left even at current off-peak prices.

IMO the best thing to do is swallow the loss and get on with things. It will likely be a long time (think, 2017) before prices recover to the stupid and unrealistic levels they hit this time last year. Don't get fixated with the price madness of the peak of the market. Market price goes down as well as up.

WTF?_2

StevieJ wrote: »

True, most of the potential sellers have decided that thay are not going to sell.

Let's see how that works out for them as prices continue downwards for a few more years and then take until about 2017 to get back to where they were last year (based on previous housing cycles) :rotfl:

StevieJ

!!!!!!? wrote: »

Let's see how that works out for them as prices continue downwards for a few more years and then take until about 2017 to get back to where they were last year (based on previous housing cycles) :rotfl:

So what, if they are moving they will purchase the new house cheaper.

mewbie_2

EdInvestor wrote: »

The long term price trend is represented by the red line.

I don't buy that. It looks as if the 'long term trend' has been pulled upwards by the most ridiculous inflated mental pyramid selling scheme that housing has seen. I suspect the 'long-term trend' will look quite different in about two to three years time.

StevieJ

mewbie wrote: »

I don't buy that. It looks as if the 'long term trend' has been pulled upwards by the most ridiculous inflated mental pyramid selling scheme that housing has seen. I suspect the 'long-term trend' will look quite different in about two to three years time.

I think they call this 'mental pyramid selling scheme' lower interest rates.

Paul_N_4

StevieJ wrote: »

I think they call this 'mental pyramid selling scheme' lower interest rates.

No I think it's called lending money you thought you had, but turned out your didn't.