Sellers start to become more realistic

Geenie

Cat695 wrote: »

I wish someone would tell the sellers down here in the southwest.....some have only dropped their price by 500quid!!!

yet according to the graph !!!!!! on here and in the news the southwest has some of the largest drops.

I haven't seen a lot of evidence for drops where I live, in sales or rentals! But having one of the best schools in the country in my village, on the outskirts of Exeter, I would imagine that is helping to keep the market bouyant around here! Exeter always looks pretty flush when I go in, but could all be an illusion of course!

neas

IveSeenTheLight wrote: »

This graph?



The nationwide graph shows the long term average for house prices should be just under £150k

Agreed there is normally an overshoot, but were not that far away from the long term average

It aint going to revert to the 'average'... otherwise that wouldnt be an average would it now?

Average is the sum of the entire data set dividied by the size... in that if you have spikey data like we got... then you have to have negatve spikes for the average to be somewhere in between.

Basically just take the peak and remove the amount it is above the average... and you will get the downturn 'peak'... (lowest point). Anyone thinking we will get back to 'average'.. is naive about statistics... only way we'd be on average if we had no growth or decline in prices.

jamiecreek

The average graduate salary is around £24000. 3.5x that is £72000. Add a 25% deposit and you're looking at a max of maybe £95000 or something.

The problem - the higher graduate salaries are generally in the big cities, ie London, where living costs are higher. Thus, saving the 25% deposit is very, very difficult. Buying somewhere with that deposit is also very very difficult.

Basically, in Bristol, the increase in Stamp Duty 0% bracket to £175,000 has artificially raised expectations for all sellers who's properties are genuinely valued from around £140,000 to £170,000. Many of them are marketing their properties at around £180,000 anticipating offers of £175,000, knowing that FTBs might be suckered/willing to pay that much and avoid upfront stamp duty costs.

As an EA told me yesterday though, the sellers still aren't willing to accept that they'll only get £140,000. They're having so many low-ball offers thrown at them the sellers are just getting frustrated, and taking them off the market. I've analysed the land registry price index rise/falls over the last 5 years, and in Bristol, the fall is only JUST starting to gather pace. It's only been greater than 1% drop for the last 2 months, something like 1.3, 1.8, and the press say November was what, 2.6%.. Before that, its been very slow, 0.5% here and there. All this talk of a price crash, and yet its barely even started to show through in prices in Bristol..

skap7309

IveSeenTheLight wrote: »

This graph?



The nationwide graph shows the long term average for house prices should be just under £150k

Agreed there is normally an overshoot, but were not that far away from the long term average

Do you know what? You mention the long term average and yes we are not far off but something has just dawned on me. Notice how the last time round it spent 12 YEARS below trend? :eek:
With this being a possibly far worse crash what on earth does the future hold? Each peak to peak follows almost identical lines - they just get bigger and bigger and longer and longer in timescales.

If this crash follows the same trend (and there is no reason whatsoever to question why it will not) we are in for one hell of a long while before we see 2007 peaks again. It took 13 years last time round to get to previous peak level. 2025+ is now a huge reality.

Sellers............i hope you are reading this!!

Really2

dopester wrote: »

Has that population got enough money of their own - or access to mortgage credit to support prices at anything above x3.5?

Well look at the position in the US. Unemployment figures up half-a-million today. Don't think they'll be getting big real-estate loans or supporting house prices from their own savings. Same in the UK with fast rising unemployment and negative pressures on pay levels.

The population only has so much money of its own - and house prices are totally out of whack given so much was lent by institutions.. beyond savings levels, but from the wholesale markets.

Not at the moment, but who knows in two years?
Some parts of the UK are a lot more affordable than others (as I stated earlier)
I don't think 3.5X average salary will by the average house but that is my opinion.
The only reason I think that is that the banking system and the UK as a whole could not afford it. If it gets like that I think we could see the world doing cordinated printing of money.
The only thing going for us as stupid as it sounds is that it is a world wide problem now. So a world wide solution could not be discounted.

Really2

skap7309 wrote: »

Do you know what? You mention the long term average and yes we are not far off but something has just dawned on me. Notice how the last time round it spent 12 YEARS below trend? :eek:
With this being a possibly far worse crash what on earth does the future hold? Each peak to peak follows almost identical lines - they just get bigger and bigger and longer and longer in timescales.

If this crash follows the same trend (and there is no reason whatsoever to question why it will not) we are in for one hell of a long while before we see 2007 peaks again. It took 13 years last time round to get to previous peak level. 2025+ is now a huge reality.

Sellers............i hope you are reading this!!

But This bubble in shape looks more like the 1980 one (6 years above average price which then turned into 6 years below)
The 90s one was around and over average for ages.(and like wise eent under for ages)
The only thing you can draw from the past is that it will go below average cost. But for how long or by how much is not decided on this form it is decided by future events.

I think sellers need to decided what is best for their own personal needs not to just look at the past as a guide to the future. If I was forced I would try to sell ASAP 10% below what is currently selling most probably.
If I just fancied selling or moving I would not bother now, there is no point competing with forced sellers if you don't have to.

Airwolf1

When we do driveby valuations for people wanting secured loans, re-mortgaging with the same company, we are finding so many people over value their house. I'd say 40% of people (based on the external valuations we've done) over value their homes. They need to wake up and smell the coffee sometimes.

edgex

jamiecreek wrote: »

The average graduate salary is around £24000. 3.5x that is £72000. Add a 25% deposit and you're looking at a max of maybe £95000 or something.

The problem - the higher graduate salaries are generally in the big cities, ie London, where living costs are higher. Thus, saving the 25% deposit is very, very difficult. Buying somewhere with that deposit is also very very difficult.

The avg graduate salary is below £24k, its more like £18500, according to HESA, who do the graduate & university stats.
3.5x = £64750
So £80k for a decent, liveable, 1 bed place would be top end.


Dont forget, that nearly all graduates who will be graduating from summer 2009 onwards will be paying back not just any student loans & overdrafts, but also tuition fee loans. Someone who started when top-up fees started would now have £9215 in tuition fee loan to pay back, + interest.
The repayments are taken directly from your pay, when your earning over £15k.
Lenders will HAVE to take this into account, as it reduces the money someone actually gets in their pay packet.
So they will either reduce the salary they use as their basis, or reduce the multiples.
OR, they take a hard line & dont lend to recent graduates, on the basis that they dont have any money for a few years.

zzzLazyDaisy

edgex wrote: »

So they will either reduce the salary they use as their basis, or reduce the multiples.
OR, they take a hard line & dont lend to recent graduates, on the basis that they dont have any money for a few years.

Or they will lend to two income couples

shirlgirl2004

Airwolf1 wrote: »

When we do driveby valuations for people wanting secured loans, re-mortgaging with the same company, we are finding so many people over value their house. I'd say 40% of people (based on the external valuations we've done) over value their homes. They need to wake up and smell the coffee sometimes.

How can you do a driveby valuation? You presumably can't see how big the garden is; if there's a conservatory; indeed just how far back the house goes! There's a big difference between my 4 bed detached and a neighbour's but I don't think you could tell from the front. Is that why you value lower? Not having a go just curious :think: