Any trend for overpricing properties in your area?

GirlWonder

Hi Everyone,

In the area you're in, or house hunting in, has anyone noticed a trend for houses which are being marketed WELL above market value?

We've noticed a lot of houses in our search area that are asking 20% above area ceiling price AND need serious updating...

Also Houses which were bought only 2-3 years ago and are asking for £100,000 more than they paid... Clearly no major work done to justify the profit they want. They're not budging off the market, though, it's stagnant. One example is a house bought in 2010 for £375k now asking for £540k!!! No modern kitchens or bathrooms and old decor.

Those houses that come asking reasonable prices go quickly.

I wondered if the recent rise in house prices might be in 'asking' prices and not in 'sale' prices.

Is this trend a 'thing' or am I imagining it? Is it reasonable to put in realistic bids to these people, or would you just disregard them for being unrealistic?

[Deleted User]

Possibly a result of the supposed rising house prices so people are chancing it, they don't want to sell but if they can make a bunch of money they may as well, so they're putting their houses on the market at above the realistic prices just in case. They don't stand to lose anything: only gain.

Alternatively, as this forum sometimes sees, people are delusional?

moneyistooshorttomention

The only ones I've been closely monitoring in my own area are in the same (low) price bracket as my own house - ie starter 2/3 bedroom houses. Hence, that's the only ones I can comment on.

Out of these - there is one specific area where darn nearly all the houses are overpriced (as they are still set at similar price levels to those prevailing before it became obvious what a high risk of flooding they are at/we got to 2013 when the agreement between insurance companies and the Government re their insurance cover will terminate in July this year and they are already finding that their insurance cover rates are shooting skyhigh when they go to renew this year).

Regarding the rest of this area - there are very few examples of overpriced houses in this price range at least. This price range of houses basically goes from £150,000 to £220,000 (dependant on area they are in and their size). I see the occasional house that is priced at £10,000-£20,000 more than the "going rate" price. It is unusual though (apart from that flood risk area). I would say its probably around 1 in 20 houses (if that) in the area as a whole that is priced too highly and they stick out like a sore thumb (eg a house that should obviously be priced at £170,000 being priced at £180,000 when similar neighbouring houses are asking around £170k and the house looks to be a similar size to them). Condition of houses doesn't make that much difference in this area - bar the house being a wreck - as far as I can see. Size and location are basically what decide our respective house prices here.

Better_Days

Yes, there is definitely some over-valuing going on around here, I suspect partly as a result of the shortage of properties (about a third less than this time last year)

The worst offenders are two EA's who I feel over value anyway. One does it because they base their fee on the original AP and not the selling price. The other does it because they have the market sewn up (they think) in a large village close to the main town in the area and so is popular. They have really managed to push up prices in this village.

OP you are right to comment on the difference between AP's and sold prices. RM and property bee in our area indicates that somewhere between a quarter and a third of properties are reduced. It would be interesting to know what the proportion was this time last year.

Whether or not you bid on the over valued properties depends I think on how much you like them. If a number of buyers make offers around the same amount then it may encourage the vendor (or EA) to be more realistic. But it can be disheartening too. Sometimes it is due to EA's managing expectations badly, others it is unrealistic vendors. When I discuss the property with the EA after the viewing I ask who set the AP, the EA or the vendor. The reply to this question will often give you a good idea of how the land lies.

I must admit I do sometimes dismiss outright some properties because the AP is so inflated. It seems to me that psychologically the vendor is going to struggle to accept a realistic offer. OTH if the property has been on the market for ages and the vendor really wants to sell, well you never know.

Dan-Dan

Where we are , people are trying it on , the asking prices matched with sold prices etc are really ambitious considering the current climate , for example , a house we liked , was bought in 2006 , right in the good times , 3 bed end of terrace for £155 , not a repo or anything , owners have made it nice , but now , i think coupled with an eager EA plus the `news` that things are looking up , they are marketing at OIEO 220K !

at the market they are looking at , and the budgets of likely buyers , they will i think be on the market at that price for some time

bretts

In london an area that i was seeing had house prices about 220k for a 3 bed semi and now you get a 2 bed terraced for 250k that is how much prices have increased in last 1 year as i have been looking at properties in same area for one year and find this increase ridiculous.

lessonlearned

I agree - there does seem to be evidence of some "optimistic" valuations. I have viewed a few fixer uppers recently - grossly overpriced for the amount of work required.

The market here is quite brisk at the moment, the houses that are priced realistically are being snapped up. The overpriced ones are sticking.

What I do find depressing is how much "dross" there is around.

I don't mean fixer uppers - you expect them to be tatty....I have no problem with those provided they are priced accordingly

It's the so called "ready to go properties". Some of them are dire, dirty, neglected, hideous fixtures and fittings, over-grown weed invested gardens. Oddly enough it's usually these that are the ones that are grossly overpriced.

The Vendors just view their properties through rose tinted spectacles and either cannot or will not see just how unrealistic they are being.

Why on earth should we overpay for your filthy smelly overpriced hovels:rotfl::rotfl:

DaftyDuck

Prior to internet information being so prevalent, I often briefly floated my houses at ~£50k over e.a. valuation. They were listed "character" properties, so difficult for the agents to value anyway, and the valuations I got were quite a spread. It worked out for me twice, with those two houses selling at their inflated asking price.

Nowadays, even with individual character properties, it's much more difficult to do this, and the resulting 'non-sale' at the higher figure can often be seen when you market at a more sensible price, causing knock-on damage to the sale.

One trend that's causing this current inflation is the relative slowdown in house price compared with a few years back. Punters are disappointed to hear a realistic valuation from two agents... if a third offers a grossly inflated price they are more willing to believe he's the one who can see their wonderful treasure for what it is (in their eyes), and he's the one who gets to market it... only for it to languish for eighteen months as a no-sale.

There's a house in my street, blighted by a huge outdoor swimming pool (we are on the coast, with one of Britain's best beaches right there) that was on sale for well over 2 years before I bought this... I've been here nearly 3 years, will soon sell this one, and I'll guess that one will still be there once mine has sold. It's a lovely house, just always undercut by other equally good properties. It currently has 3 agents marketing it, and has been the rounds with all the agents now. Having been mis-priced at the outset, the owners refuse to market at a sensible price, even now they are with those agents who valued it lower to start with.

shortchanged_2

I am certainly seeing a lot of overpriced places where I am. Basically they are just sitting on the market for months and months or they just gradually reduce the price.

I think people are looking for good value now. Apart from the obvious hotspots which are just bonkers.

It's quite easy to spot an overpriced property that you know won't sell and then on the other hand houses that are keenly priced do sell pretty quickly.

Basically in a stagnant market the urgency isn't there. When house prices are rising rapidly people panic and often just buy places because they feel they will get left out (look at the numerous posts on the London market). In a slower market people want to feel they getting value for money.

lessonlearned

My parents have a cute tiny character property, not listed.

It needs a huge amount of work doing - bless them they are too old and decrepit now and can't keep up the maintenance.

I'm trying to find them a nice little manageable bungalow so got 3 EA's round to value. Now their property is unique - a total one off in a sought after area.

I tried to get the EA's to understand the level of work required and they just didn't get it. Two of them said to just ignore that and market at it £145 ish, because it is so unique. The other one was far more realistic and took note of the work required and pitched it at at £125K "because of the stamp duty".

I still think it should be nearer £110K and even then it would take a fair wind.

It is beyond the scope of a DIYer and a builder would want it at £100K. My parents, God love 'em, heard the £145K and now they think that is what it is "worth". :rotfl::rotfl:

Mrs_Z

Prices are certainly going crazy around here. I'm a Rightmove addict and monitor 3 postcodes on daily basis - sad i know....Recently went a view a house that had been bought for £318k in November last year. Roll on 6 months where they had turned it from a large 2 bed into an ordinary 3 bed, modernised the bathroom and knocked down a dining room wall to make it into a kitchen diner. Work was very well and sympathetically done and the house is in a desirable area - on the market for £450k!!! (and it sold).On our road, a house needing some updating came onto a market very reasonably priced and sold on the 1st day to the 1st viewer.All new listings seem to have another £5k added to the asking price.