35% of houses will not sell in a year?

dizziblonde

Two houses on our street have been up for at least a year and a half. One's got issues with the state of repair of it (has decent windows in apart from one random one they didn't replace which is completely rotten, the back garden's a jungle - considering they tried to do the whole House Doctor thing on the inside - daft), the other - I don't think they're trying that hard to sell it and more just testing the water. They're not overpriced for where they are - they're actually a cheaper deal than the next street... but the access into the street I think puts buyers off when they look around (cul-de-sac but without a turning circle, no drives for any of the cars - but things function in a very civilized fashion if you actually LIVE here). Add in the fact the tram extension that was being mooted is now in limbo again - I can understand why this street's got pretty stagnant sale-wise.

We're renting another one on the street as it wasn't selling either (but he'd overpriced it to hell and made some amusing DIY decisions) - keep an eye on the prices the others are up for as if we can get the mortgage together, we're looking to buy and we'd quite happily buy on this street because the neighbours and location for us are so incredibly good (let's face it a street where people talk to each other and keep an eye on each other's houses is fairly rare these days).

Horizon81

I've been looking at a house which has been on the market for about 18 months, with the asking price coming down only slighty in that time. I put in an offer of 12% under the current asking price and the estate agent might as well have sworn at me, such was her disdain and disbelief at my offer. Personally I think it's more than a reasonable offer given what other houses have actually sold for in that immediate area. I'd be willing to improve my offer slightly however I have had zero indication that the seller would be willing to budge on his asking price whatsoever therefore it feels fruitless. Some people are genuinely deluded and need bringing back down to earth. I suppose the main way to do this is offer what you geniunely feel is a fair price and don't be swayed by unrealistic sellers who are living as if we're still in a boom market. We're not and prices need to re-adjust accordingly.

Iconic

Davesnave wrote: »

I know of houses in West Wales that were on the market in 2006/7, never mind a year ago, and they're still cheerfully waving at me on Rightmove!

So are they all waiting for the market to improve? Perhaps they all in negative equity and cannot afford to reduce the price.

Most people seem to imply if a house is not selling the price is to high. I think it is a lack of buyers in some sections of the market.

sonastin

Alan2020 wrote: »

Why do you think they are not selling? Lets take a different product say a mobile phone, because the market is FAST moving the price for a top end phone can be £400 at launch to £50 at the end of its life, even less. In order to sell the phone most retailers have a knack of getting the price right for the quality of the phone.

Welcome to a house market that was always stable and rising, now it is like the mobile phone market, and should rightly be so. There is supply and demand, too much supply less demand. How do you break it, by lowering the prices. We have a free market, so it will mean prices will come to the correct value in say 20 years, if it was a controlled market prices will always be close to the correct value.

Take some of the flats in the UK, a one bed costs £150K in reality to build such a flat, it would cost the builder £15K to 30K with the market value of labour. And if the market was heavily regulated a flat in the UK will cost anywhere from 20K to 35K, but oh no it costs £150K, why?? Because it is overpriced and unsustainable.

Imagine trying to sell a Nokia 3310 (yes the old brick) for £1000, how many people would buy it, no one, £10 someone might. So the 35% of houses are simply overpriced as they haven't moved with the market.

The housing monopoly will only be broken when someone with huge capital gets land in a prime location and builds well designed prefabbed flats in all the major cities in the UK at £35K for 1 bed, £45 for 2 beds and £55 for 3 beds with terraces/balconies. This will crash the overpriced flat market and generate the new Bill Gates of the housing market. Whoever does that will be simply the richest person in the world.

If Nokia and the other mobile phone manufacturers could only actual make 100 new handsets per year and the demand for mobile phones continued along the same trajectory as it currently does, your analogy might actually start to work. At the moment, people still want a roof over their head and they are willing to pay a premium to have that roof over their (and their family's) head only. And as there is limited housing stock on this little island and builders are struggling to keep pace with the creation of new households, some people are willing to pay £1000 for the housing equivalent of a 3310. Others prefer to rent in their chosen location rather than buy the cheap stock available elsewhere in the country so price is not the only factor driving saleability

Davesnave

Iconic wrote: »

So are they all waiting for the market to improve? Perhaps they all in negative equity and cannot afford to reduce the price.

Most people seem to imply if a house is not selling the price is to high. I think it is a lack of buyers in some sections of the market.

You may be right about the lack of buyers in some places/sectors.

However, there's no lack of buyers in the smallholding sector, which is what we were interested in, as evidenced by the fact that good, sensibly-priced ones still go pretty quickly. Buying outright or with a small mortgage is the way to go, because as a business proposition they're more lifestyle than easy profit.

We looked at several attractive places at £400k+, but despite negotiating carefully, couldn't agree that the figures stacked-up, so we walked. There was never any animosity, just bewilderment on our part. Two we were keen on are still there, one at the 2007 price(!) and the other £70k down.

With, about 2/3 of the population of Ceredigion dependent financially on various kinds of government-funded employment, I think these sellers, if they're doing as you suggest, will have a long wait! It's probably a similar picture in Carmarthenshire and Pembs.

In any event, it no longer matters to us, as we found someone elsewhere willing to deal. Markets move in the end because of those who are willing and able to undercut others.

myhouse_2

NEH wrote: »

There is 5 of us on the market, not 2 and they're flats not houses so we can't reduce that far... Not sure where you thought i mentioned houses??

I have had people say on here that we are all overpriced but given that one has just sold within 4 weeks and that's on for the same price as the expensive one and isn't as well done plus it's communal areas are in bad way so not the best block and the severe timber rot one is udner offer again for a similar price to ours then I'm not sure we are overpriced. As I said we looked at reducing the price and asked our Solicitors whether the lower priced one had had more interest or any offers and they said it had made no difference, people just don't want your kind of flat just now.

We're prepared to drop the price but as it would make no difference what is the point...There is no rhyme or reason as i said with reference to the above examples as to why some sell and some don't in our particular area....

We're going to rent if need be as we can't afford to let it go for a pittance. With flats you can't just drop 20K like you would with a house.

I consider a flat to be a kind of house, hence the reason I used "house". After all, you are in the housing market.
Having 5 houses does give you a better idea of price usually, but I would suggest that the fact that there is no interest in your type of accommodation is a clear indicator that at the present time your house is more expensive that what the market can support. Therefore if you want to sell now you have to reduce your price or hope that you're lucky to get one of the few people who are happy to pay the current price. It's no good saying that you're just unlucky that people don't want your house type at the moment. What that means is that your house type is considered too expensive for what it is - houses can always be sold if the price is right. You're competing in the housing market which means you're competing with all types of houses to find the best price which buyers are prepared to pay.
It's no different from holding overpriced shares in an illiquid market - I can't sell my shares until the price is right to bring in more buyers and make the market liquid again.
Just like with shares though, you can hold on to your house until things pick up as long as you don't need the money straight away (and as long as you are sure the market will improve).

NEH

myhouse wrote: »

I consider a flat to be a kind of house, hence the reason I used "house". After all, you are in the housing market.
Having 5 houses does give you a better idea of price usually, but I would suggest that the fact that there is no interest in your type of accommodation is a clear indicator that at the present time your house is more expensive that what the market can support. Therefore if you want to sell now you have to reduce your price or hope that you're lucky to get one of the few people who are happy to pay the current price. It's no good saying that you're just unlucky that people don't want your house type at the moment. What that means is that your house type is considered too expensive for what it is - houses can always be sold if the price is right. You're competing in the housing market which means you're competing with all types of houses to find the best price which buyers are prepared to pay.
It's no different from holding overpriced shares in an illiquid market - I can't sell my shares until the price is right to bring in more buyers and make the market liquid again.
Just like with shares though, you can hold on to your house until things pick up as long as you don't need the money straight away (and as long as you are sure the market will improve).

Studio flats are beneath most FTB now as they want a 1 bed....

You say drop your price and a buyer will waltz through the door well my question is this why haven't the folks with a lower price had many viewings and offers if we followed the theory that dropping price will make a buyer appear?

Also as i said if people want to pay for a rot infested flat that is 2k or 3K cheaper surely that would mean ours isn't over priced, given that we have the better kept building, a huge loft and no rot infestation....

The area the flat is in doesn't follow the normal run of economic climate so we don't know as yet which way things will go...

Blacksheep1979

pardal51 wrote: »

Is it because vendors are asking too much and not willing to negotiate?
Is it because of lending tightening from banks?

Davesnave wrote: »

Seems about right, and both issues you mention are to blame. Banks don't have as much as they once had to lend, while some sellers only want to sell on their terms, or they'll stay put.

Surely these are pretty much one and the same - ok banks aren't willing to lend in the same silly ways as 5 years ago but that's because there's a lot more uncertainty in the market and so if buyers ask silly money, banks won't lend. So basically it boils down to people being unrealistic.

myhouse_2

NEH wrote: »

Studio flats are beneath most FTB now as they want a 1 bed....

You say drop your price and a buyer will waltz through the door well my question is this why haven't the folks with a lower price had many viewings and offers if we followed the theory that dropping price will make a buyer appear?

Also as i said if people want to pay for a rot infested flat that is 2k or 3K cheaper surely that would mean ours isn't over priced, given that we have the better kept building, a huge loft and no rot infestation....

The area the flat is in doesn't follow the normal run of economic climate so we don't know as yet which way things will go...

Well it's a trade off between time and money. If you offer your flat for 50% lower than everyone else you'll suddenly find that there are plenty people wanting it and you'll sell it super fast. I'm suggesting in all my posts in this thread that it's likely that the lower priced flats are also priced too high for the current market. I'm not of course recommending you drop it 50% immediately, but if you really want to sell it soon then you would need to get lucky with a willing buyer or drop it gradually to the price where people start to bite.
Finding the market level is not an exact science of course, so I'm not making any recommendations on what you need to do, but simply saying that since the flats are not selling, they're not correctly priced for the current market. (Current market could be totally different in a months time of course!)

Henry_P_Chester

Everything has it's price. The higher the price the less likely to sell, the lower the price the more likely to sell. This doesn't mean that the lowest priced flat will sell first but that's the most likely outcome all else being equal.

It all depends how much you really want to sell and how long your prepared to wait. You could raise the price and wait a decade or more for a buyer or you could drop it considerably and sell it tomorrow.

If all the flats in your area were priced half what they are now there would be plenty of viewers and plenty of offers. The demand is there just not at the price your asking.