Get ready for Capitulation....Fear is here, people will start to accept lower prices

chucky

bubblesmoney wrote: »

shortage?
i wonder why a million flats / houses are empty.
i cant understand this business of the right hand trying to prop up the property prices while the left hand is cribbing about needing more affordable housing.

that's because you're only reading and interpreting the facts how you want to interpret them.

why are they empty? - 2nd homes, weekend homes, flat's used during the week for work purposes, investments, void periods for landlords, not let by landlords for tax purposes, repos, holiday homes etc...

it's too easy saying that there are 1 million homes empty and painting a negative picture - once you drill down into these numbers there are perfectly valid reasons.

bubblesmoney

chucky wrote: »

that's because you're only reading and interpreting the facts how you want to interpret them.

why are they empty? - 2nd homes, weekend homes, flat's used during the week for work purposes, investments, void periods for landlords, not let by landlords for tax purposes, repos, holiday homes etc...

it's too easy saying that there are 1 million homes empty and painting a negative picture - once you drill down into these numbers there are perfectly valid reasons.

that can apply to any person interpretation.

surely there cant be a shortage of flats in most big cities. there already is a glut of those. when the govt talks about affordable housing surely there cant be anything more affordable than flats. if people are not buying then its because the market has been overheating for a while and needs to come back to sustainable levels. i am a home owner too so i stand to loose with decreased prices! but that doesnt blind me to reality now. i bought because i wanted to buy even if it meant a loss. i have got life to live as well so i bought as can sustain a loss but wont be a happy bunny when that happens which looks inevitable now.:o

chucky

bubblesmoney wrote: »

that can apply to any person interpretation.

surely there cant be a shortage of flats in most big cities. there already is a glut of those. when the govt talks about affordable housing surely there cant be anything more affordable than flats. if people are not buying then its because the market has been overheating for a while and needs to come back to sustainable levels. i am a home owner too so i stand to loose with decreased prices! but that doesnt blind me to reality now. i bought because i wanted to buy even if it meant a loss. i have got life to live as well so i bought as can sustain a loss but wont be a happy bunny when that happens which looks inevitable now.:o

exactly.

empty homes don't really have a baring on house prices unless they are at a guess - repos or BTL's with longish voids. all the others are probably properties that the owners are comfortable or can afford them being empty.

as for you comment on buying a property even though it may decrease in value - the 'loss', is a subjective loss, it's only materialised if you ever need or have to sell. unless you need to sell you don't capitulate as the OP tries to imply.

taking a long term view, how many prices ups and downs do you think you'll suffer being a home owner?

stephen163

It's very wrong to think of a 'national shortage' and then reason out that we need to build more dwellings. The national housing market is made up of many separate local markets, each with their own characteristics and demand/supply scenarios. If you build 100,000 houses on Tyneside, the changes to house prices in london will be negligible.

First, to declare you have a housing shortage requires you to set some arbitrary threshold on where house prices should be. This must be linked to earnings. So I wonder what multiplier of average earnings they have chosen to set as their equilibrium house price. Anyway, if the government is serious about fulfilling this ambition, it can only act as a downward pressure on long term house prices.

bubblesmoney

i posted a link to an article on the retail industry thread. that has a mention i think about house vacancy rates in comparison to long term means if i remember right. the other thread about commercial real estate vacancy rates compared to long term means. i cant find such vacancy data for long term trends in the uk, probably that would give a better idea factoring in all the reasons you mentioned.

chucky

bubblesmoney wrote: »

i posted a link to an article on the retail industry thread. that has a mention i think about house vacancy rates in comparison to long term means if i remember right. the other thread about commercial real estate vacancy rates compared to long term means. i cant find such vacancy data for long term trends in the uk, probably that would give a better idea factoring in all the reasons you mentioned.

if you do find one - what it will probably be missing is the regional breakdown which is obviously important.
as mentioned above - what is the impact to Hastings house prices if there are 50,000 empty properties in Wigan?

otherwise the headline of 1 million empty properties is just doom mongering if it is linked to house prices in general

ninky_2

dgl1001 wrote: »

I attended an interesting presentation yesterday by the governments planning and housing advisory committee, about housing demand and supply. In simple terms they said:

• we need to be building about 240k homes per annum just to redress the balance to make property more affordable for everyone, from now on
• We need need to be building closer to 300k dwelling per annum to redress the backlog from the last 10 years
• The lack of supply means that household formation will be delayed until people are older (meaning that people will live in cramped conditions
• we are on target to build about 100k dwellings this year with the lack of building adding to more pent up demand
• Its unlikely that we will be able to build anything like to volumes of housing we need to be doing in the future
• Governemt are every concerned that society will be divided between the wealthly home owners and the less well off non homeowners
• Shortage of open market housing will lead to longer council housing waiting lists - the demand for which cannot be met
• Despite the fall in house prices, properties are becoming less affordable (due to lack of finance) which is adding pressure to council waiting lists
• because of the lack of suitable housing and the current slump in building, they expect house prices to recover within 5 years. They made alot about this point, namely that this down turn in building is going to cause big problems a fews down the line

I thought it was interesting stuff. clearly with such a shortage of housing, property must be a good med to long term investment.

There is a good potential source of housing that we already have in this country that is not being tapped into.

A scheme could be created so the growing numbers of isolated elderly living alone (that aren't happy with this) could bcome housesharers freeing up the newly vacant property as affordable rented accommodation. The pensioners would gain companionship and an additional source of income and society would gain extra housing without having to look at eating into the greenbelt. Obviously they would keep all the growing equity in their house until their death when the benificiaries of the estate could decide to take the property back (with notice) or keep it rented out.

For evidence there is a market for this see below...


http://www.telegraph.co.uk/news/2103262/A-million-male-pensioners-live-alone,-says-Help-the-Aged.html

moggylover

chucky wrote: »

exactly - you diarised it and put another thread out just for the sake of starting another thread.

capitulation - not where i live, sorry.

Not seen very much capitulation in the middle to upper sector of our market around here yet - but since some of the houses for sale in that sector have now been on the market since 2005 (and were vastly over-priced then) there is beginning to be a dawning of the truth with some. However, they seem to think that they only need knock £10k or £20K off the asking price of £450K to get droves of bargain hunters on their doorstep:D .

One Estate Agent has closed their doors after 35 years in the business here, and another one is refusing to put houses on his books unless he is allowed to value them realistically. Any of that, "it won't affect my house because" rubbish, or the "well, we thought about £75K more than that, can we just try that first" and he refuses to list them:D so hopefully the message will get through soon.

Went to look at a couple of places last week, as one of my two houses is now close to exchange, and the lady was bemoaning the fact that she had had an offer of £250K when the house is listed at £279K. I shan't be bothering to make an offer on that one because I think even £250K was more than it was worth and pointed out to her that I had had to take a good 25% drop in the value of my mums house in order to sell that. Personally, if I was her I would grab the £250K and run because if we do go back to pre-2000 prices then the place would be worth more like £150K:eek: and she should know that as that is what they paid for it around 1998;) .

According to the Estate Agents though there are still an awful lot of sellers who really are unaware of what is happening in the housing market, and even more of them that think it will not affect any of the "nice" properties.:rolleyes:

I have some strong interest in my own house as well at the moment and have made my mind up to get what I can for it and will probably rent for a little while (although there is one house I am in love with which I think they would be willing to come down to where I want to offer, so maybe) until people face up to it all. TBF, it must be hard if you were counting on having lots of money from downsizing in retirement, but otherwise there should be no problem for anyone who has owned their home for more than the last five or six years. You get less - but you also pay less for the next one.

As to "prices going up" in January, I have been watching the market around here for ages, and it does say that the average house price has gone up: that is rubbish, it is just that the first of the mid-market/more expensive homes have started to take offers and so there are several in the £350 - £500K price range gone recently (all with substantially lower sale prices than they were originally asking:D ) that have made it look as if the prices have gone up when used in the average;) . All the houses that have sold appear to have been sold at lower than asking price, some very substantially, so that does not equate to an increase to me, just a different selection of houses finally being sold.

chucky

moggylover wrote: »

Not seen very much capitulation in the middle to upper sector of our market around here yet - but since some of the houses for sale in that sector have not been on the market since 2005 (and were vastly over-priced then) there is beginning to be a dawning of the truth with some. However, they seem to think that they only need knock £10k or £20K off the asking price of £450K to get droves of bargain hunters on their doorstep:D .

One Estate Agent has closed their doors after 35 years in the business here, and another one is refusing to put houses on his books unless he is allowed to value them realistically. Any of that, "it won't affect my house because" rubbish, or the "well, we thought about £75K more than that, can we just try that first" and he refuses to list them:D so hopefully the message will get through soon.

Went to look at a couple of places last week, as one of my two houses is now close to exchange, and the lady was bemoaning the fact that she had had an offer of £250K when the house is listed at £279K. I shan't be bothering to make an offer on that one because I think even £250K was more than it was worth and pointed out to her that I had had to take a good 25% drop in the value of my mums house in order to sell that. Personally, if I was her I would grab the £250K and run because if we do go back to pre-2000 prices then the place would be worth more like £150K:eek: and she should know that as that is what they paid for it around 1998;) .

According to the Estate Agents though there are still an awful lot of sellers who really are unaware of what is happening in the housing market, and even more of them that think it will not affect any of the "nice" properties.:rolleyes:

I have some strong interest in my own house as well at the moment and have made my mind up to get what I can for it and will probably rent for a little while (although there is one house I am in love with which I think they would be willing to come down to where I want to offer, so maybe) until people face up to it all. TBF, it must be hard if you were counting on having lots of money from downsizing in retirement, but otherwise there should be no problem for anyone who has owned their home for more than the last five or six years. You get less - but you also pay less for the next one.

As to "prices going up" in January, I have been watching the market around here for ages, and it does say that the average house price has gone up: that is rubbish, it is just that the first of the mid-market/more expensive homes have started to take offers and so there are several in the £350 - £500K price range gone recently (all with substantially lower sale prices than they were originally asking:D ) that have made it look as if the prices have gone up when used in the average;) . All the houses that have sold appear to have been sold at lower than asking price, some very substantially, so that does not equate to an increase to me, just a different selection of houses finally being sold.

excellent post Moggy Lover, definitely not capitulation - my thoughts and experiences are not far from yours :beer:

moggylover

chucky wrote: »

excellent post Moggy Lover, definitely not capitulation - my thoughts and experiences are not far from yours :beer:

But I think it will have to come Chucky! Many of the houses/smallholdings around here have been on the market since 2005/2006 and were overpriced compared to those that were actually selling at that time. Our market was a bit slow throughout all of 2006 tbh because the smallholding owners had priced themselves out of the market:rolleyes: and people who wanted to move to the area to try out the "good life" scenario could not buy cash, as had been happening in the past, and have a lump sum left over to live on. The wages are so dreadful around here (even if you can find any work) that they weren't going to earn enough working locally to make the whole adventure worth their while, so the market had slowed. As an example of how stupidly the prices jumped in 2006, the prices for a reasonable house 3 bedroomed or more, with around 4 acres of land and some stone outbuildings for conversion to holiday lets (just what I was looking for) in 2005 was around £270 - £300K and they were selling, not fast but they were selling. By the spring of the following year (they always took them off the market in the winter as most of the ground is heavy clay around here and the fields look dreadful in the wet Welsh winters:D so they came off around September and went back on in about March/April:rolleyes: to catch idiot incomers who knew nothing about surveying land:D ) they had gone up to around £370 to £450K, and this time without the convertable outbuildings which would have been the only way of making an income from such a holding. A few sold, but not very many and the market was already rather quiet during 2006 and 2007 at those prices. It has been totally dead since 2007, with Estate Agents admitting that the websites are being looked at, but no phone calls were coming in, and no viewings were happening.

I know Wales (especially as isolated an area as Ceredigion is) will take the hit harder than more central areas, but some kind of "capitulation" or "waking-up" is going to have to come or those people are still going to be trying to sell in 2011, and I know some of them actually "need" to sell for various family reasons.

Did I enjoy taking so much lower an offer for my mums? Of course not. But I had to be realistic that it was costing me rates, water rates, insurance and a percentage drop in value each month and also needed to be checked up on and bits of gardening and so forth done - so realistically it was more sense to do so. I shall try to take the same attitude with my own, but that might be more difficult for me as I bought it derelict (in 1990:eek: ) having sold in Slough in 1989 (yes I DO suffer from very poor timing:D ) and it was only bare walls standing by the time the demolitions were done and the renovations started so I have it imprinted on my heart big time. However, it is too small for current needs, and have needed to move for some time (should NEVER have had kids:D ) so need to use my head not my heart and get the best deal I can on it, and the best deal I can on the next one.

Whether we call it "capitulation" or just "wising up" a large part of the market are going to have to take their head out of the sand eventually, just as they did in the last recession. Somehow it always seems to be those further up the ladder that have the hardest time accepting it for a while though:D