Are house prices really going down?

kennyboy66_2

skap7309 wrote: »

. It seems alot of people are expecting to wake up tomorrow morning and find rampant HPI appear and they are in for some shock as it looks like the HPC is here to stay for some considerable time.

There may be a little bit of that and a little bit of people thinking - "It was worth this last year, I am not accepting less than x".

However, the main reason is that its is fiendishly difficult to get chains of house moves going at the moment, partly because it only takes one person not to budge on price, or one mortgage offer to fall through, and the chain collapses.

Everyone I know who has been made redundant or is at risk of doing so are more likely to keep their existing house, but take a job anywhere and rent monday-friday.
It makes no difference whether this is 200 miles away in London or anywhere in Europe. This is especially so if they have children.

Cat695

EdInvestor wrote: »

Oh really. Even the highest index only says around 15%, and the LR says 10%.Perhaos you are referring to new build flats in provincial city centres? Land registry figures don't take into account repos and auctions

It's the job of the estate agent to put them wise about the local sitaution - all property is local, you will recall. Well seeing as most EA lie through their teeth...mine keeps telling me the HPC is over....I wouldn't believe a word they say anyway
At the end of the day its the Mortgage company that decides the valuation of the house not the seller or the EA, and seeing as they want to ensure their investment is safe they will take into account houseprice drops of next year

People with attitudes like yours are not doing FTBs any favours.They are already known to have unrealistic expectations, be likely to have too small a deposit, to experience down valuations and have their mortgage applications either refused or reduced because they are high risk. They also are known to gazunder at the last minute.
Why am I not doing them a favour...getting money off an overpriced property is quite a big favour

Nobody really wants to do business with these people. Such sales risk becoming an expensive disaster.That's why the OP is being treated with derision.

People may not what to do business with FTB but as they are the ones that are selling a FTB can be their saviour....why would anyone sell when house prices are coming down if they don't need to?? or doo they not keep intouch with reality.

And why a hatred of FTBer's?? you was one once

carolt

kennyboy66 wrote: »

There may be a little bit of that and a little bit of people thinking - "It was worth this last year, I am not accepting less than x".

However, the main reason is that its is fiendishly difficult to get chains of house moves going at the moment, partly because it only takes one person not to budge on price, or one mortgage offer to fall through, and the chain collapses.

Everyone I know who has been made redundant or is at risk of doing so are more likely to keep their existing house, but take a job anywhere and rent monday-friday.
It makes no difference whether this is 200 miles away in London or anywhere in Europe. This is especially so if they have children.

Poor children, if mum/dad are working 200 miles away....

penguine

ftb_home_dream wrote: »

Hello,

I'm starting to have doubts now and feel a bit depressed. Are house prices really going down? We are FTB and we have saved a deposit of 25% and also are willing to get mortgage agreed in principle. We put an offer in on four properties and all of them have been turned down.

£289K property - £250K offer - Rejected!
£289K property - £250K offer - Rejected!
£299K property - £250K offer - Rejected!
£310K property - £250K offer - Laughed in my face and Rejected!

We don't want to go over the 250K stamp duty threshold. We wanted to put in offer like £240K and then put it up to £250K but then we were worried we won't be taken seriously so we went it straight with a maximum of 250K

What do you guys think?

Last summer we were looking at a house on the market at £299k. Like you we didn't want to pay more than £250k. We started at £240k then negotiated up to £250k -- the vendors came down to £270k and the EA told us the property was definitely worth that much. Over several weeks the vendors came down further, to £260k. The negotiations ended there and after some discussion, OH and I decided we didn't want the house anymore.

Then the owner (an elderly relative of the vendors) died and the estate went into probate. Last month the house was put back on the market at £250k.

So, I think you can get a house for £250 if you're patient. The economic news is going to get worse over the next few months and many sellers will become more realistic. There is a huge backlog of unsold properties and very few buyers on the market at the moment. You're in a great position, you have a sizeable deposit and you are willing to buy in the current market. Next year I doubt any EAs will be laughing in your face.

skap7309

kennyboy66 wrote: »

There may be a little bit of that and a little bit of people thinking - "It was worth this last year, I am not accepting less than x".

However, the main reason is that its is fiendishly difficult to get chains of house moves going at the moment, partly because it only takes one person not to budge on price, or one mortgage offer to fall through, and the chain collapses.

Agreed. This lunchtime i carried out my first check on physical sold prices in certain areas. The house at the top of my list is asking for 'offers over £199k' which despite it being a stunning house looks overpriced. This was reduced from £215k and has been on the market for about 6 months.

Now, going by the Nationwide figures we are at October 2003 price levels. The road is fairly small but coincidentally i found two which sold there in late 2003. The prices? 144k and 147k.... :rolleyes:

It is this kind of attitude that gets my back up, the data is there in black and white yet they are still pricing at more than 25% over what it is worth and they are clearly not interested in a lower offer as it is advertised as 'offers over'. :rolleyes: That seems to be echoed all around this area to.

EDIT - Just to clear something up regarding the 'nice areas will hold their value' etc, the LR figures for Cambs (where i live) are bang on the national average of -11%.

sympatex

Skap - Found exactly the same in my area Guildford way. I look at 2003 prices and judge whether a house is fairly valued, it seems at the moment houses valued today at 230 (having come down from 270!!) were bought for 185 in 2003. I don't mind paying 200 for those houses but nothing more and i have been rejected on all occasions. We're not quite through the denial stage yet. Maybe it will happen where their house is valued in Euro's rather than £'s they will accept life's different.

But at the end of it all, if they want to move they have to accept and i think its the vendors who will blink first, they have a mortgage.

PasturesNew

jenner wrote: »

3 bed semi with garage is a ftb property??????

It is in some areas... but where I grew up a studio or 1-bed flat is a FTB property.

If they're not ... then who are they for?

WTF?_2

skap7309 wrote: »

I was going to thank your response.....until i got to the last line.

TBH i am not interested in buying until i reach my target deposit so until then it makes no difference to me what sellers do. However, what does concern me is the amount of properties on Rightmove changing from 'for sale' to 'for rent'. It seems alot of people are expecting to wake up tomorrow morning and find rampant HPI appear and they are in for some shock as it looks like the HPC is here to stay for some considerable time.

I wouldn't be so sure about that - the government are about to do long term damage to the economy to create inflation. I think they'll do whatever it takes and they will succeed (actually, they will be spectacularly successful eventually) albeit at great cost to our long term future.

Whether or not I agree with what they're doing is irrelevant. At some stage we are going to tip into an inflationary environment rapidly becoming strongly inflationary and we may well see house prices reverse in nominal terms purely because of that. Don't expect interest on your savings to allow you to keep pace.

The only problem will be predicting when that is going to happen. I don't see it happening soon but it's a real risk from 9 months out IMO.

Still, there should be a good window of 2-3 months to get into the market even as we go inflationary (watch for oil prices and stock market booms) but do keep an open mind.

Dithering_Dad

ftb_home_dream wrote: »

I can understand where the sellers are coming from. BUT property prices are going down and that 10-12% is to keep myself safe from the next year or two drop. I'm taking a risk buying now and I'm prepared to take that risk if I could have that 10-12% safety in my pocket. It is not bad if I lose 10% from what I have paid for for this property if the market goes down by 20% over the new few years. That's the idea behind this. As for the sellers, if they have sold for low price they could buy somewhere for low price. It will even out for them so they won't be left out in cold will they?

Surely if you are expecting the home owner to drop by a further 10-12%, then they're taking the risk, not you?

As far as the home owners not accepting your £250k offers....

The 289k property was marketed from July 2008, so if we average the 15% drop over the last 12 months, we have 1.24% drops MoM. This means that since July we have seen an average of 7.5% reduction in house prices.

The £289k house was initially marketed for £329, which is a drop of £40k and represents about a 12.16% drop. So they have already over discounted for the percentage drop since July.

You now want them to drop a further £39k, down to £250. This represents a further 13.49% and a whopping 24% from original market price.

So to recap, since July the market has fallen 7.5%, yet you expect this home owner to accept a 24% drop in the same period?

With bare figures like that, do you not see why you are not being taken seriously?

kennyboy66_2

carolt wrote: »

Poor children, if mum/dad are working 200 miles away....

Indeed, but plenty of people in all industries have done it for years.

The alternative is to move your children away from their friends and move schools and have no idea how long the job may last.

And thats why there won't be quite as many forced moves as you think - for the vast majority of people, once their children are in education, they don't particularly want to move to a different city.