Home sellers fear lower prices

Graham_Devon

A growing number of homeowners pulled their home sales in September amid fears that Britain's ailing economy will force them to drop their prices, according to a poll by the Royal Institution of Chartered Surveyors (Rics).

Estate agents reported a fall in new instructions during September, with 5% more surveyors reporting supply of property fell rather than rose.

The fall in buying activity was also blamed for muted high street sales, which haver come to rely on a buoyant property market to boost the sale of furniture and big ticket items like flat-screen TVs and home furnishings.

Rics, the chartered surveyors' body, said its members reported that fragile consumer confidence and continuing fears over the economy are causing many to think twice before putting their properties up for sale.

Retail sales rose only modestly in September on the previous month driven by food sales. Non-food sales improved a little but the British Retail Consortium said its monthly survey found the state of the high street remained challenging. "Homewares showed a modest uplift, though sales were still often deal-driven. Larger purchases in particular were hit by fragile consumer confidence and the weak housing market. Clothing sales dropped off sharply in the end-of-month heatwave," it said.

http://www.guardian.co.uk/business/2011/oct/11/rics-housing-market-slowdown-economy

Seems they can blame some of Septembers retail figures on the housing market too!

Anyway, not sure what pulling your house off the market is going to do. If prices fall, they fall regardless. Either these people now can't sell due to negative equity fears, or they, for some reason didn't really want to move in the first place, so just pull their houses off the market. I don't really get it in all honesty.

Can anyone explain the mindset that if house prices look to fall, it's better to pull your house off the market, and sit on it for longer, therefore possibly watching it fall further before you move?

Pimperne1

Quite frankly I am surprised that the RICS survey gets the attention that it does. They don't half spout a lot of rubbish. Can you imagine that being an option on their survey:

Why are you taking your house off the market:

a) I think prices will rise further
b) I think prices will fall further
c) Its September, it hasn't sold, I'll try again next year.

worldtraveller

Graham_Devon wrote: »

Can anyone explain the mindset that if house prices look to fall, it's better to pull your house off the market, and sit on it for longer, therefore possibly watching it fall further before you move?

Some people still believe that miracles can happen?

Mallotum_X

Pimp, Would you be surprised if they had said prices were rising

No doubt there would have been a big Express front page posted up as a result.

RICS is one of a number of surveys, all painting the same message at the moment, slowly falling house prices. Makes sense really given the state of the economy.

ruggedtoast

Graham_Devon wrote: »

http://www.guardian.co.uk/business/2011/oct/11/rics-housing-market-slowdown-economy

Seems they can blame some of Septembers retail figures on the housing market too!

Anyway, not sure what pulling your house off the market is going to do. If prices fall, they fall regardless. Either these people now can't sell due to negative equity fears, or they, for some reason didn't really want to move in the first place, so just pull their houses off the market. I don't really get it in all honesty.

Can anyone explain the mindset that if house prices look to fall, it's better to pull your house off the market, and sit on it for longer, therefore possibly watching it fall further before you move?

Because if you need x amount to move and you cant get that, and you're sick of baking bread and brewing coffee while people trample all over your axminster poking your particulars, it might make sense to try again in the Spring.

nearlynew

Graham_Devon wrote: »

Can anyone explain the mindset that if house prices look to fall, it's better to pull your house off the market, and sit on it for longer, therefore possibly watching it fall further before you move?

That's easy and can be summed up in 6 words...

"peak price is the right price"

chucknorris

If they are selling their main home (rather than an investment) why would they fear lower prices, surely the lower prices would also apply to the property that they would be buying (unless of course they are downsizing, but that can't represent many of them surely).

If they are selling an investment then yes of course it makes sense to wait until prices have recovered (if you can) and reap the benefit of lower interest rates in the meantime.

Linton

Graham_Devon wrote: »

http://www.guardian.co.uk/business/2011/oct/11/rics-housing-market-slowdown-economy

Seems they can blame some of Septembers retail figures on the housing market too!

Anyway, not sure what pulling your house off the market is going to do. If prices fall, they fall regardless. Either these people now can't sell due to negative equity fears, or they, for some reason didn't really want to move in the first place, so just pull their houses off the market. I don't really get it in all honesty.

Can anyone explain the mindset that if house prices look to fall, it's better to pull your house off the market, and sit on it for longer, therefore possibly watching it fall further before you move?

I dont believe that is what is happening, nor that house prices are set for a major fall.

But given your assumptions there is one simple explanation:

Most non-forced sellers are also buyers, often of more expensive houses. If houses were in general falling by a fixed % delaying would mean that the house being bought would decrease in value more than the house they were selling. So it is in their financial interest to delay.

So if non-forced sellers were acting completely rationally a general drop in prices would lead to stagnation. Oddly enough, that's what we would seem to have now.

abaxas

Translation.

People boasted about the value of their homes and are unable to take the ego hit of reality.

nearlynew

abaxas wrote: »

Translation.

People boasted about the value of their homes and are unable to take the ego hit of reality.

I managed to say the same in 6 words.

(coincidentally in post 6)

nembot

Pimperne1 wrote: »

Quite frankly I am surprised that the RICS survey gets the attention that it does. They don't half spout a lot of rubbish. Can you imagine that being an option on their survey:

Why are you taking your house off the market:

a) I think prices will rise further
b) I think prices will fall further
c) Its September, it hasn't sold, I'll try again next year.

RICS seems to be used by many on here when the figures go the other way