3 beds have been overpricing the market

IveSeenTheLight

MrsManda wrote: »

Everything in a free market is only worth what people are willing to pay for it. This applies to houses, diamonds, gold, chocolate....
If people aren't willing to pay a price the product won't sell and the price goes down. If people continue to buy then the price stays the same or increases if demand rises - supply and demand are the driving forces.

Which is why all those hoping and wishing for house prices to lower should focus their attention in addressing the supply / demand ratio.

House prices itself help to balance the ratio. As prices rise, less can afford, lowering demand until an equilibrium is achieved (however short that time may be)

If enough people seriously want more affordable houses for them, then they need to be looking at planning laws, lobbying for more social housing etc.

that would probably be far more affective than posting their hopes and wishes for in a forum.

Yakubu22

pault123 wrote: »

The knockdown I took, didn't effect me in the slighest as the house above me knocked theirs down by more and the house above that matched the increased known down. After all was done the upper end of the chain were then at 2004 prices.

The point is though there are still 70% of 3 beds in my area at £20-£30k higher than they should be, and they sit on the market with no movement, some for over a year.

If all 3beds+ were corrected by this amount, 2 beds could correct and they'd be a lot more transactions

Same in my area too. Quite a few 3-beds (which aren't spacious) that are on for £15-25k too much. Some have been on the market pushing 18 months. I wonder if someone offered them £20k less whether they'd take that? Probably not, which is why they hang around.

I would see prices are 2006 level in my area.

silvercar

MrsManda wrote: »

Everything in a free market is only worth what people are willing to pay for it. This applies to houses, diamonds, gold, chocolate....
If people aren't willing to pay a price the product won't sell and the price goes down. If people continue to buy then the price stays the same or increases if demand rises - supply and demand are the driving forces.

Agreed. In the housing market the FTB has been hit hard by the unavailability of mortgages, this has created an extra downward pressure on FTB type homes. Further up the ladder this is not so apparent as anyone moving up the ladder should have built up some equity in their current home to act as their next deposit and increases their mortgage range.

At the "next home" level you have the desperate sellers who have to sell at any price either because they are debt ridden or due to the need to relocate or split from partner, you also have the not desperate seller looking to move to a bigger home who can afford to hang on for a good price and can afford to spend the cash on their current home to ensure it fetches its max potential, hence OP's observation that there is disparity in the market for 3 bed properties.