House price drop from 2007 to now

Oranjeboom

Hi all,

have my eye on a property that was purchased at the market high at the end of 2007 (south east). It's now on the market for exactly the same price at 125k. The place has seen very little work since that time apart from UPVC windows, some new carpets....nothing substantial.

I may be naive, but I'm a bit mystified why they are asking for the same price from the market high. Other properties in the area haven't sold in the area recently so I can't compare but there's nothing in the area to support higher local prices (e.g. influx of local high-paying companies, improved transport etc).

Obviously I understand that the owners are trying to get the best price they can but even if they have the expectation of getting 5% knocked off (6k) that still seems overpriced to me. IMHO, I would think that 110-115 is a fair price. They've had no offers so far and it's been on the market for over 5 months. It needs work doing (15k) and if the market has come down since (end of) 2007 then this should be reflected now also.

Am I being unrealistic? I've spoken to the agent who say they sellers are looking for 125k. A first offer of 105 seems the way to go, proceeding to go up to 115 tops.

Opinions please! Thanks

Typhoon2000

May be they don't need to move urgently, and can't get their equity back to buy something else unless they get close to their asking price.

lolavix

Where abouts in the south east? Still seems quite a low price. As said above, if they aren't desperate they may hold out, many people are now.

Oranjeboom

lolavix wrote: »

Where abouts in the south east? Still seems quite a low price. As said above, if they aren't desperate they may hold out, many people are now.

it;s in the sticks and they quite desperate to move due to life changing circumstances...so i would think that they don't want to hold out too long. i can't imagine many people offering them the asking price either. will have to wait and see.

TDPIX

oranjeboom wrote: »

it;s in the sticks and they quite desperate to move due to life changing circumstances...so i would think that they don't want to hold out too long. i can't imagine many people offering them the asking price either. will have to wait and see.

Sometimes people can just have unrealistic expectations - perhaps this is the case with the vendors. If you do put in an offer, I'd consider doing it in writing and explaining why you are offering xx% lower than their asking price - e.g. similar properties have sold for £nnnk [okay as you say, this might be tricky to do], house prices in the South East have fallen by xx% in real terms from the 2007 peak, etc.

Perhaps if the offer is rejected you can then ask the estate agent exactly why the vendors have priced their property as they have done, based on what you mentioned. Either they'll give a good reason which will help you to understand things from their perspective, or it'll be clear that the vendors are just being unrealistic and it may be time to find another property.

That's just my $0.02.

GDB2222

There's one I know in N Norfolk that sold Sep-07 for £272k. The owners live and work 10 miles away, and they never really moved in. They are asking £280k, although the Halifax house price estimator shows a drop of 17% for East Anglia, ie valuing this one at £225k. On the other hand, the house two doors up did sell in April-11 for £280,000 (brand new, larger, corner plot, so worth a bit more). So, it's difficult to know what the value really is.

This one has been on the market for 18 months, now.

addyboy1982

As someone once told me, "If your first offer doesn't offend the estate agent, then it's too high".

Worked for me when I bought my place, and should work now given the current financial climate.

Good luck!

Mickygg

You say upvc windows and carpets not a big job?

Could be worth £10k.


Also are you comparing asking prices or what the house was previously sold for?

brit1234

I don't think anything is selling 2007 prices other than central london and they are faltering.

Have you checked it with propert bee and what other houses have sold for in the street.

nollag2006

House prices in the South East recovered to levels similar to the late 2007 levels. In many areas, particularly in London, they are well above peak levels.

Have a look here to get an idea of prices today, compared to late 2007:
http://houseprices.landregistry.gov.uk/price-calculator

I popped in Surrey into the above, and it came back with a 1% drop over the period. On that basis, I can't see your vendors being in any rush to accept a low ball offer from you, particularly as we move into Spring bounce territory.

nollag2006

brit1234 wrote: »

I don't think anything is selling 2007 prices other than central london and they are faltering.

Have you checked it with propert bee and what other houses have sold for in the street.

Hi brit - are you still holding out for the 50% fall by Christmas 2009?

:rotfl: