Can I ask a stupid question?

Graham_Devon

Cleaver wrote: »

I understand the theory of all of this. But the vast, vast majority of houses will sell for somewhere between 90% and 100% of the asking price. Either that or they never sell. Obviously some will go for 80%, 70% or even 60% off, but they will be the tiny minority.

So even if every £250k house sells for £195k (which it doesn't, it will sell for more) then that's still only a 25% difference, whereas the difference is 40%.

I know there must be a logical reason, I'm just saying that your explanation can't be it.

Yes yes yes

But it's the initial asking price which rightmove takes.

If they reduce 3 times, rightmove cares not one jot.

But the figures you are talking about (between 90 and 100% of asking price) DO care, as they are working on the asking price at the time of the sale....not the asking price when it first hit the market.

This probably isn't thw whole explanation anyway, but initial asking price, and final asking price when it actually sells, is very different, as property bee shows.

Cleaver

http://www.themoneystop.co.uk/032010/93-percent-of-asking-price-being-achieved-for-properties.html

Just so we can discount this theory, the following report states:

One property company has released data showing that properties are now achieving around 93 percent of the asking price when they go on the market

In February of last year properties were reaching only 88 percent of the asking price when they went to market

So, the average house that goes on Rightmove for £250,000 will sell for around £225,000.

Really2

Graham_Devon wrote: »

Yes yes yes

But it's the initial asking price which rightmove takes.

If they reduce 3 times, rightmove cares not one jot.

But the figures you are talking about (between 90 and 100% of asking price) DO care, as they are working on the asking price at the time of the sale....not the asking price when it first hit the market.

I believe the average house sells in 10 weeks, so the majority must sell without a reduction in asking price (you would be fairly mad to do 1 or more discounts in 2.5 months) .

By default the most overpriced will see the most cuts and spend the longest on the market.

That is why I say a discount on market price means F all when buying.

Cleaver

Graham_Devon wrote: »

Yes yes yes

But it's the initial asking price which rightmove takes.

If they reduce 3 times, rightmove cares not one jot.

But the figures you are talking about (between 90 and 100% of asking price) DO care, as they are working on the asking price at the time of the sale....not the asking price when it first hit the market.

Graham, I've just posted a link that shows the difference between initial asking price and final sale price seems to hover at around 10%. Simply put, this does not account for a 40% difference between the two reports.

So, on average, we can presume that the average £100k initial asking price house on RM eventually sells for £90k and the average £200k initial asking price house sells for around £180k and so on.

Graham_Devon wrote: »

This probably isn't thw whole explanation anyway, but initial asking price, and final asking price when it actually sells, is very different, as property bee shows.

It isn't very different, it's around 10% different. I undertand that RM measures initial, there could be one or two drops, then a sale, but it's not going to be 40% is it?

vivatifosi

Cleaver wrote: »

http://www.themoneystop.co.uk/032010/93-percent-of-asking-price-being-achieved-for-properties.html

So, the average house that goes on Rightmove for £250,000 will sell for around £225,000.

I remember a housing report by the government in the 90s that said more or less the same. The difference between asking and actual was generally less than 10% and only went above 10% when there was a housing downturn (but then not to 40%). I can't prove this unfortunately as I can't find a link. You'll just have to take my word for it based on the fact I'm a boring sod who spends my time on a housing board and remember this type of rubbish.

Graham_Devon

Yes, those that sell.

Combined with those listed that never sell and are pulled, your talking bigger numbers. For instance, we have reports saying people are now reducing supply by pulling their houses off the market. So they are listed, but never sell. Being pulled due to falls in prices. Halifax reports those that do still sell. Rightmove reports all those that have gone on and been pulled because people are not happy with the price they can realistically acheieve.

But obviously this is crazy, and I'm just thinking all this and don't actually have a clue.

Really2

Graham_Devon wrote: »

But obviously this is crazy, and I'm just thinking all this and don't actually have a clue.

That's your best line yet, it's like your subconscious is trying to escape.

Malcolm.

The rightmove figures are not in keeping with land registry figures. I expect the answer to the OP lies in rightmove's calculation basis.

229k, on the face of it, seems to be too high.

House Price Index

October 2010: 265.4
(January 1995: 100)

Average price £165,505

Change Monthly -0.8% Annual 3.4%

Next index: 11am on
30 December 2010.
http://www1.landregistry.gov.uk/houseprices/

JonnyBravo

Haliwide are publishing an "average house" price, and their methodology is set up to reflect this.
In other words they are trying to establish the value of an average type of house.

This is very different to establishing the "average house price". ie the average price of houses sold which is where many other indices are heading. (inc Rightmove - but yes this is "average asking price")

That is the main difference for the large discrepancy. Whilst it may appear they are measuring the same thing, they are not.

Graham_Devon

Really2 wrote: »

That's your best line yet, it's like your subconscious is trying to escape.

It's just based on cleavers post having a jab above.