Estate Agents Bailing Out!

geneer

http://www.moneyweek.com/investments/property/uk/bad-news-for-uk-house-prices-insiders-are-selling-14001



:eek:

The insiders are bailing out of the property market

And here's where we come to maybe the scariest bit of all. The property market's insiders are selling out.

Growing numbers of estate agents are putting themselves up for sale, according to the boss of the stock market-listed agency Winkworth. This year the firm says it has had approaches from 35 agents who want to sell up. And it expects this trend to continue apace.

Now stock market investors pay attention when directors trade in their own companies' shares. When there's heavy selling by several top executives, it often warns of a looming downturn in a firm's business prospects.

So when we see estate agents – the people on the inside track – trying to bail out in droves, the conclusion is clear. They wouldn't be doing it if they were bullish – in fact, they're freaking about the future for the housing market. And that has to be a very bad sign for UK property prices.

nollag2006

More sh!te from MoneyWeek.

Hasn't their editor recently given up on STR'ing?

MacMickster

This may be down to the low volume of transactions over the last few years more than any expectation of falling prices.

With low transaction volumes, many EAs are probably unable to cover their office overheads at the moment.

If prices were to drop 20% then this would probably increase the transaction volumes. Although EAs would make less from each transaction, the increased volumes would more than make up for this.

I think that this news is probably more an indicator of an expectation of continued stagnation in the housing market for years to come.

Dan:_4

Funny how people mock The Express but believe every word printed in MoneyWeek. Strange.

HAMISH_MCTAVISH

Ah yes, that bible of the bears, Moneyweek.:rotfl:

geneer

Hasn't their editor recently given up on STR'ing?[/QUOTE]

HAMISH_MCTAVISH wrote: »

Ah yes, that bible of the bears, Moneyweek.:rotfl:

Oh what an excellent rebuttal of their analysis of the situation.
Such is why your insight and contribution is so highly valued.

HAMISH_MCTAVISH

MacMickster wrote: »

This may be down to the low volume of transactions over the last few years more than any expectation of falling prices.

With low transaction volumes, many EAs are probably unable to cover their office overheads at the moment.

Absolutely correct, so far.

This is nothing other than EA's realising that there will be no return to a higher volume market any time soon as the banks simply do not have the money to lend.

Which of course means that large numbers of people, particularly the young, will continue to be excluded from the market thanks to mortgage rationing.

If prices were to drop 20% then this would probably increase the transaction volumes. Although EAs would make less from each transaction, the increased volumes would more than make up for this.

We already saw what happened to volumes last time prices dropped 20%. They fell off a cliff as banks withdrew lending.

Supply of houses on the market also dropped from 1.1 million down to 600K, as vendors withdrew properties they were unable or unwilling to sell at a lower price.

And both lending and supply increased once prices started rising again after early 2009.

I think that this news is probably more an indicator of an expectation of continued stagnation in the housing market for years to come.

Correct.

Thrugelmir

MacMickster wrote: »

This may be down to the low volume of transactions over the last few years more than any expectation of falling prices.

With low transaction volumes, many EAs are probably unable to cover their office overheads at the moment.

If prices were to drop 20% then this would probably increase the transaction volumes. Although EAs would make less from each transaction, the increased volumes would more than make up for this.

I think that this news is probably more an indicator of an expectation of continued stagnation in the housing market for years to come.

Much in the same way that 2 pubs a week are closing their doors.

Life moves in cycles.

macaque_2

nollag2006 wrote: »

More sh!te from MoneyWeek.

Hasn't their editor recently given up on STR'ing?

Faced with inconvenient truths, the bulls tend to go for the man rather than the ball. In this case, they seemed to have turned on the referee. Moneyweek might not their favourite read but it is quoting its sources.

In an effort to settle this matter, the 70% club has (at its own cost) decided to bring on 'Estate Agent Today' as a substitute referee.

More estate agencies will close as transactions stay at drought levels, Winkworth has told its shareholders – whilst also revealing that it has had approaches from 35 agents this year which want to sell up.

He said: “A vendor will often be taken aback by the conservative valuation placed on his or her property by a mortgage surveyor, concerned by the risk of litigation that became a reality following over-enthusiastic valuations in prior boom years.

http://www.estateagenttoday.co.uk/news_features/More-agents-will-close-Winkworth-boss-warns

Cleaver

I think it's natural and appropriate that some Estate Agents close down. I think there are two main reasons why we don't need as many:

1. Property was a boom asset for the last decade and the number of estate agents rose to match that boom. We're not in a boom anymore and clearly won't be for many years, therefore the demand for them will be less. I can't see transaction figures going up for a long, long time.

2. Going forward will as many people need estate agents? What do they offer that you couldn't do yourself? I understand that there will be some people who need an estate agent for a variety of reasons, but it'll just take a push from Google, or a company like that, to offer a cheap listing service based on existing maps and a tipping point of people using the service to put a lot of EAs out of business. I know from recent house hunting that the vast majority of agents are awful at selling houses: they no nothing about the area, they know little about the house, they're late, they're disorganised and often they are rude. They probably got away with these things during a boom, but they won't in a stagnant and difficult market.

If we were selling our house tomorrow I'd really look in to listing it myself on Rightmove (or using one of those no frills companies) and avoiding using an agent altogether if I could.

Cleaver

Thrugelmir wrote: »

Much in the same way that 2 pubs a week are closing their doors.

Life moves in cycles.

Indeed. I find it really sad that lots of previously busy pubs are closing around me, especially as many are in beautiful buildings. People blame cheap supermarket alcohol and a change in drinking culture, but I'm not sure I buy this. Most of the locals near me haven't made any really effort to change with the market and offer anything different to any of the other pubs in the area. There is a resurgence for real ale and craft ales at the moment, but none of my locals are taking advantage of this, just the same old Carling, Stella, Strongbow and maybe one badly kept ale on tap. The pubs that innovate and make an effort seem to be doing okay.

I always feel sad when I see a massive pub up for sale somewhere, as I think "who on earth is going to rent or buy that place?". Not fit for purpose in the age we live in.