Property asking prices - people are STILL holding out

formulaonefan

StevieJ wrote: »

If these people have not dropped the prices so far do you really think they are going to drop them with interest rates falling and liquidity being introduced into the market?

I don't think interest rates is going to fall for another 4-5 months.

With the liquidation introduced to the market and the stock market bouncing back and inflation at 5.2% interest rates are not going to go down any time soon. It will be on hold for the few months.

going2die_rich

Max_Headroom wrote: »

Out of interest I just had a look on Rightmove and found about five for sale, every single one asking £150K+!

Just goes to show, despite all the media and all the reports of the financial problems, lack of available credit and achieved house prices dropping, sellers just refuse to accept their properties are worth less than they were.

I don't think we'll start to see the real price drops until these sellers are forced to start visibly dropping their prices in order to create the opportunity for a sale. At the moment people must be looking at what they can borrow and what the asking prices are and just not bothering in which case no sale and no resultant price drop data.
.

The thing is, you can say they are overpriced as much as you like, but if a seller wont accept less than a set amount, then thats that. Just as if a buyer wont pay over a set amount, thats the end of the conversation.

Dont forget, many people who sell do it for personal reasons, closer to family/schools/jobs, moving up the ladder, etc. Not because they have to. So many could leave it on the market for 10 years if they wanted as they aren't "commited" sellers. In that they aren't forced to sell for any real reason that could justify a "loss" in their mind.

You'll only be seeing drops for those forced to sell. So if you want that scenario of everyone dropping prices, you need to hope a few more ten's of thousands jobs go and interest rates increase which drive people in to debt and therefore force their hands to sell at a loss/huge discounts.

Someone has to lose, in order for someone else to win.

going2die_rich

formulaonefan wrote: »

I don't think interest rates is going to fall for another 4-5 months.

With the liquidation introduced to the market and the stock market bouncing back and inflation at 5.2% interest rates are not going to go down any time soon. It will be on hold for the few months.

I think Inflation will be least of their worries right now though. So wouldn't be surprised if they go for dropping rates to get people spending again and then later down the line once people are over the "credit crunch panic" use harsh rises to control inflation.

blisk

carolt wrote: »

Sadly, it may take mass unemployment to - forcibly- open the floodgates.

Like the crisis over last 2 weeks, massive bank bailouts, floodgates opening.

Icebergs breaking, platonic plates shifting with earthquakes, that is the only way.

As people & governments don't want to face the truth of the house price correction.
It's easier to try to brush it under the carpet.

formulaonefan

going2die_rich wrote: »

I think Inflation will be least of their worries right now though. So wouldn't be surprised if they go for dropping rates to get people spending again and then later down the line once people are over the "credit crunch panic" use harsh rises to control inflation.

I don't think BOE is going to do that. Why would they want the economy to run lose again rather then control growth? Why would you want ppl to borrow all over again and then control with harsh interest rate? Aren't we in this position because of that?

The sensible thing to do is control the economy and give it a steady growth. The credit crunch problem need to be resolved to let sensible lending to continue. At the minute we have a total freeze.

carolt

going2die_rich wrote: »

The thing is, you can say they are overpriced as much as you like, but if a seller wont accept less than a set amount, then thats that. Just as if a buyer wont pay over a set amount, thats the end of the conversation.

Dont forget, many people who sell do it for personal reasons, closer to family/schools/jobs, moving up the ladder, etc. Not because they have to. So many could leave it on the market for 10 years if they wanted as they aren't "commited" sellers. In that they aren't forced to sell for any real reason that could justify a "loss" in their mind.

You'll only be seeing drops for those forced to sell. So if you want that scenario of everyone dropping prices, you need to hope a few more ten's of thousands jobs go and interest rates increase which drive people in to debt and therefore force their hands to sell at a loss/huge discounts.

Someone has to lose, in order for someone else to win.

Meant to quote rather than thank you - not that you said anything offensive, but I tend to disagree.

One BTL landlord with say 10 properties, going bust, equals 10 happy FTB's. Someone like the lovely Wilsons going bust = 900 happy FTB's.

So on the basis of the greatest good for the greatest number, the death of BTL would seem the best way of maximising our national good - rather less people have to lose in order for rather more to win, as per your original quote.

going2die_rich

carolt wrote: »

One BTL landlord with say 10 properties, going bust, equals 10 happy FTB's. Someone like the lovely Wilsons going bust = 900 happy FTB's.

The one landlord with 10 properties isn't the one thats likely to go bust though. The one landlord with many properties will be someone whose most likely bought over a longer period of time and also much better at the business side so has factored in such times. If anything they'll be happy with the situation. Kills off the "wannabe" landlord competition, also provides them with new properties to buy up (once they bottom out) and with no one buying, increases their potential customer base so they can be more picky about which tenants they chose.

Its the would be BTLs. Those that thought, I won't bother with a pension or savings and instead I will buy a property, let it out to pay the mortgage and then 20 years down the line make a killing. So one loser (including their family) = one winner (including their family). No real gain to the majority.

I think big building companies should be smart and try and sell their entire plots to foriegn investors or councils instead of wasting their times on trying to sell to joe bloggs. Even selling at cost will increase their cash flow. Then use this time to "persuade" councils to let them buy up land and get planning permission since no one else will be doing it. Delay building for 5 or so years and then start when the first properties will be coming off as the markets growing again.

Cannon_Fodder

going2die_rich wrote: »

You'll only be seeing drops for those forced to sell...

...which will be enough for Land Registry and House Price websites to reflect the downwards movement.

The next property in the road/type, the valuer has to go with Land Registry/other evidence, so the mortgage company restricts the loan offer, so the buyer asks nicely of the seller, the seller does the same, and everybody is happy as dropping prices reduce the monetary gaps between the rungs of the 'housing ladder'.

Except those neighbours hanging on for the original price.
Except anyone wanting to downsize and take cash.

But as you say for there to be winners, there has to be losers.

18-36 months from now, enough turnover has occured for the reduced prices to be accepted wisdom...

QED.

carolt

going2die_rich wrote: »

The one landlord with 10 properties isn't the one thats likely to go bust though. The one landlord with many properties will be someone whose most likely bought over a longer period of time and also much better at the business side so has factored in such times. If anything they'll be happy with the situation. Kills off the "wannabe" landlord competition, also provides them with new properties to buy up (once they bottom out) and with no one buying, increases their potential customer base so they can be more picky about which tenants they chose.

Its the would be BTLs. Those that thought, I won't bother with a pension or savings and instead I will buy a property, let it out to pay the mortgage and then 20 years down the line make a killing. So one loser (including their family) = one winner (including their family). No real gain to the majority.

I think big building companies should be smart and try and sell their entire plots to foriegn investors or councils instead of wasting their times on trying to sell to joe bloggs. Even selling at cost will increase their cash flow. Then use this time to "persuade" councils to let them buy up land and get planning permission since no one else will be doing it. Delay building for 5 or so years and then start when the first properties will be coming off as the markets growing again.

That's just not true. As we all know from the eponymous thread, the Wilsons are on the edge of going bankrupt. Plenty of other johnny come lately landlords bought more than one property. And the landlord who bought a house for his pension will lose his pension, maybe - but not necessarily his house. So on our scale of winners and losers, he may still count as not a major loser, if not exactly a winner.

So overall gain to the general good, I think.

chucky

not sure about that - it will be general good for the people that can afford to buy these BTL properties.

unfortunately not all FTBs have the cash or can arrange the finance to buy these properties.

sorry to shatter the illusion Carol but they will be picked up by other investors too.