asking price v sold price

downshifted

Please does anyone know what the average sold price versus asking price is these days? I seem to remember seeing estate agents statistics in the past?

princeofpounds

Take the rightmove index (Asking prices) and the land registry index (realised sold prices but delayed) or the halifax/nationwide indices (less lag but mortgageable rather than true sales prices).

Divide the former by the latter to get the difference.

I like to call this the 'index of delusion'. It shows how delusional the average seller is. I did this a few months ago and it was quite interesting - it showed that delusion was 15% larger in the early summer than its historical average, so sellers were overpricing 15% more than normal and would want to get at least 15% off and maybe a little more (statistically speaking, it doesn't apply directly to individual transactions).

It's probably normalised a bit now.

oh, I should add that scientifically only the changes in the index really tell you anything, the actual % discount doesn't translate into actual discounts as the indexes are constituted differently. But it's probably in the right ballpark anyway so could help you inform your decision.

downshifted

So Divide Oct selling price on Nationwide (£162,038) by Oct asking price on Rightmove (£230,184)?

Or divide the difference by the selling price?

Sorry - maths not my strong point!!

nic_santorini

sounds a bit complicated above, it surely depends on supply and demand in any given area. I have noticed the house prices go up about £10-15k since we were buying in July 09. My neighbour sold his house for the asking price in two hours, which suggests to me it was too cheap which was a first for the estate agents around here!!!

downshifted

I know it cannot be anything other than a general guide but I am sure I have seen these statistics somewhere and think they may be interesting - it would be generally informative to sellers and buyers alike

princeofpounds

sounds a bit complicated above,

It can't be any simpler. Both sets of data are published online. Then you divide one number by another. ANY data that purports to represent typical discounts will have to do the same, although if any agents do publish data they might use their own inhouse indices.

it surely depends on supply and demand in any given area.

Well of course the notion of a 'typical' or 'average' discount is meaningless to any single item of a sample. Averages are a statistical property. The problem is that the OP maybe wants to try and apply a statistical property (which describes a sample) to an individual datapoint. It might provide some guidance but its real use will be very very limited.

So Divide Oct selling price on Nationwide (£162,038) by Oct asking price on Rightmove (£230,184)?

That would seem to imply that housing sells at 70% of asking price (162/230) but as I pointed out above the actual discount number doesn't mean much, as the two indices are based on different datasets. There may be less low value houses on rightmove. There may be speculatively priced houses on rightmove. Rightmove use might be more popular in high priced areas like London.

However, if you draw the series out over a historical period, the change in discounting DOES tell you something - how much more or less the discounting is done than the average at any given time - as this number only relies on the change in the same data sets and not the data sets themselves.

The basic point of what I'm telling you is that you can figure out lots of interesting stuff from these aggregate statistics but they have limited relevance to an individual transaction if that is what you are trying to do.

Rather than trying to value off an asking price that is set totally arbitrarily you should be looking at either comparative valuation to other properties that have transacted or looking at the likely rent and applying an appropriate rental yield, or one of the other accepted valuation techniques for individual properties.

CloudCuckooLand

NAEA October 2009;

http://www.findaproperty.com/displaystory.aspx?edid=00&salerent=0&storyid=23327

• The number of house hunters registered per branch decreased from 294 in September to 287 in October, according to the National Association of Estate Agents (NAEA).
• The number of sales agreed per branch of estate agents decreased from an average of nine (8.5) in September to eight (7.7).
• The average number of properties available for sale per branch fell from 62 to 57.
• The percentage of first-time buyers (FTBs) fell from 26 per cent to 22 per cent.
• The gap between asking and selling prices decreased from 10.9 per cent to 8.75 per cent.

Original appears to be here http://www.naea.co.uk/news/news_details.aspx?id=510

downshifted

Thank you very much :-)

westv

For individual areas just type in a postcode into Hometrack and it will give you the information.

downshifted

Thanks - I didn't know this helpful website :-)

Doozergirl

Lots of talk on the board of how London & the South East are holding value and everywhere else isn't.

As someone born and bred in London, I've got nothing against London(!) but I can tell you now that prices in this part of everywhere else are indeed holding up and property is being snapped up. The bouyancy of the market isn't solely regional, it's very much a local thing.

Property is more expensive in London & SE that is a fact but markets change from street to street, let alone regionally; moreso the imaginary divide between the bottom corner ofthe country. Regional variations provide some idea of trend on a very removed level. If you're actually in the market for a house, it's going to be different for everyone.

Agree also that 'average' selling price is pretty useless. You can buy one property for 15% less than asking and one for asking so I guess that makes the average - 92.5% based on it being 2 properties or perhaps 94.6% based on the actual selling vs. asking if one is worth more than the other. You can twist it so many ways that the answer to 'average' is pointless. The average house is worth say £175k - so should we all offer £175k based on that info?

Averages are pointless and of no use at all in the real world of buying and selling houses. It has never occurred to me to offer based on averages, only on what I have been prepared to pay or indeed only marketed at what I was prepared to sell for.