Estate Agent Today: Rightmove Says get real on house prices.

HAMISH_MCTAVISH

Cleaver wrote: »

My friend just refuses to pay 20% more for the 80% of houses on the market,

And 80% of vendors refuse to drop 20% from their price, because they know full well that if they do they'll struggle to buy the next house.

After all, 80% of houses out there are not available at a similarly discounted price, as your friend has discovered.

It would be deeply irrational for an individual to risk the equity in their home in this way.

because it's obvious that good houses come on at a lower rate and she'll get one of these eventually..

How long has she been trying to buy?

Because in this day and age, where proceedable buyers are as rare as hens teeth, and where the levels of distressed sellers are higher than they've been in a couple of decades, I'd suggest if she can't find that quite quickly then it's far from obvious she'll find it at all.....

Going4TheDream

HAMISH_MCTAVISH wrote: »

And 80% of vendors refuse to drop 20% from their price, because they know full well that if they do they'll struggle to buy the next house.

After all, 80% of houses out there are not available at a similarly discounted price, as your friend has discovered.

It would be deeply irrational for an individual to risk the equity in their home in this way.



How long has she been trying to buy?

Because in this day and age, where proceedable buyers are as rare as hens teeth, and where the levels of distressed sellers are higher than they've been in a couple of decades, I'd suggest if she can't find that quite quickly then it's far from obvious she'll find it at all.....

You would not pay over the odds for a 2nd hand car that was 20% - 25% over valued and would probably not even look at it, and if you did
would be trying to knock the seller down to a more marketable price. Why should it be any different with house prices, true equity is only realized when a sale is agreed, so it is not about being deeply irrational for an individual to risk their equity as it really isnt worth anything to them until they make a sale and actually realize the true worth of it.

geneer

HAMISH_MCTAVISH wrote: »

Shocker....

Desperate estate agent VI with a business model reliant on high volumes tries to talk vendors into cutting prices.

:rotfl: Ah yes. No doubt you expected this would happen.

No doubt because the bull's were repeatedly told that Estate agents would have to adapt to survive.

The real shocker is how easily you've slipped from hanging onto the every word of VIs to dismissing them as...erm...VIs.

One can only imagine the comedy wriggling that will take place once mortgage lenders realise that they need to lend mortgages to survive.

crash123

I think they should bring HIPs back. How many are testing the water because it dosen`t cost you anything?

myhouse_2

HAMISH_MCTAVISH wrote: »

And 80% of vendors refuse to drop 20% from their price, because they know full well that if they do they'll struggle to buy the next house.

After all, 80% of houses out there are not available at a similarly discounted price, as your friend has discovered.

It would be deeply irrational for an individual to risk the equity in their home in this way.

What a load of tripe - you seem to think that low volumes are sustainable - they are not. At some point volumes have to return to normal - people need to move for all sorts of reasons, people need to buy, people need to sell. They can delay it for many reasons, but ultimately volumes will return to normal. To make that happen either buyers will get more money, or sellers will drop their price. I see no signs that 2007 level lending will return this decade so it will be the sellers who drop their price.
It's not the stubborn sellers who set the selling price - it's the people who need to sell and price accordingly.
Who will buy from a stubborn vendor demanding 250k when others around are selling for 200k.

HAMISH_MCTAVISH

myhouse wrote: »

At some point volumes have to return to normal - people need to move for all sorts of reasons, people need to buy, people need to sell. They can delay it for many reasons, but ultimately volumes will return to normal.

Absolutely correct. They will.

But price is not what is currently holding back volumes.

To make that happen either buyers will get more money, or sellers will drop their price.

Again, price has little to do with why volumes are not normal.

It's the mortgage drought.

We currently lend just 35% of the funds needed for volumes to return to 2007 levels.

If everyone dropped prices by another 10% we would have 38.5% of the volume needed to return to 2007 levels.

There is still a massive shortage of lending, and only a massive increase in lending can return volume to the market.

I see no signs that 2007 level lending will return this decade so it will be the sellers who drop their price.

And volumes will remain on the floor until a massive increase in lending is achieved.

Simples.

It's not the stubborn sellers who set the selling price - it's the people who need to sell and price accordingly.
Who will buy from a stubborn vendor demanding 250k when others around are selling for 200k.

We're 4 years into the crash now.

Prices are stagnant at 10% below peak, and volumes stable at 35% or so of peak.

How's that theory working for you so far?:rotfl:

Pimperne1

myhouse wrote: »

What a load of tripe - you seem to think that low volumes are sustainable - they are not. At some point volumes have to return to normal - people need to move for all sorts of reasons, people need to buy, people need to sell. They can delay it for many reasons, but ultimately volumes will return to normal. To make that happen either buyers will get more money, or sellers will drop their price. I see no signs that 2007 level lending will return this decade so it will be the sellers who drop their price.
It's not the stubborn sellers who set the selling price - it's the people who need to sell and price accordingly.
Who will buy from a stubborn vendor demanding 250k when others around are selling for 200k.

You are correct, people need to move for all sorts of reasons. Those people are still moving, hence the 40k to 50k sales each month. The sales above this number usually come from people who elect to move but who have no pressing need to (IMHO). In the current climate the people who would normally be wishing to climb higher up the ladder have decided to put their ambitions on hold.

myhouse_2

HAMISH_MCTAVISH wrote: »

Absolutely correct. They will.
But price is not what is currently holding back volumes.
Again, price has little to do with why volumes are not normal.
It's the mortgage drought.

I doubt volumes will return to 2007 levels for a decade. Volumes around that time were pushed high because of excessive lending. Everyone and anyone could borrow as much as they wanted, people were making a killing and thought the good times would never end.

Price and mortgage drought are directly related. More money available for lending means more buyers, more competition and higher prices. Now of course it's the opposite. Less money available means fewer buyers and competition among sellers to get those buyers, resulting in...lower prices.
Mortgage lending is undoubtedly below average and will improve over the next few years but will not reach anything like 2007 levels.