Estate agent Haart shows drop of 14% in south-west London in November

Jason74

Bubble_and_Squeak wrote: »

oui, the fools that were saying it was a good time to buy in may

Not really. Now don't get me wrong, I actually agree with you that London prices on the ground have dropped off a little since May, but the key words here are "a little". Homebuyers of course broadly fit into one of two categories. They're either they're trading within the market , or first time buyers . For people trading within the market, price changes make remarkably little difference.

To take my situation as an example, I own a 2 bed Maisonette, and given the right circumstances, would like to trade up to a 3 bed house in the same area. At the trough of the market in 2010, my Maisonette was worth about £140k, and the kind of house I would like would have cost about £265k. A cost to change of £125k. Now, after by a huge distance the biggest increase in values over 5 years the area has ever seen, my place is worth about £250k, and the house I'd want is about £400k . A cost to achange of £150k. In other words, despite huge changes in house prices in my area, the difference in cost for me to move is about the price of a top of the range hatchback or (of far more interest to me) a top end upright piano. Frankly, in the greater scheme, that's of little consequence in the context of a long term home.

For first time buyers, the situation is different again. Lets again use my current home as the example, as it's a fairly typical ftb property. In may, it would have probably cost £260k, in November £250k. Yes, the ftb would have saved a headline £10k by waiting until November, but they'd probably have spent about half that in rent in the same period so the net saving is actually about £5k. There's little sign of prices falling much further in the short term, so that saving is probably about as good as it's going to get.

So at best, a 6 Month delay saves a typical FTB £5k ish net. At worst (say from August last year to Feb this) the same 6 Month delay could have cost the same FTB £50k. At at any time in the past 5 years (and all bar about 2 years in the past 20). A six Month delay by an FTB would result in higher prices. So broadly speaking, delay for an FTB would cause a cost rather than a benefit 90% of the time.

So, in summary, for people trading up, the impact iof price changes is limited enough that the right time to buy is essentially whenever it suits you (assuming you're buying and selling at the same time). For an FTB, someone buying in May would probably show a small paper loss now, but will almost certainly come out ahead sooner rather than later. Given that very few people can pick out the 10% of the time when prices will fall, the smart move for most is again to buy when their wider circumstances make it appropriate. Timing the market for a home is generaly a mugs game that most will lose, so no, suggesting that May was a good time to buy is nowhere near as daft as Crashy's comments. . . . . . .but then, very litle is

Crashy_Time

Jason74 wrote: »

Not really. Now don't get me wrong, I actually agree with you that London prices on the ground have dropped off a little since May, but the key words here are "a little". Homebuyers of course broadly fit into one of two categories. They're either they're trading within the market , or first time buyers . For people trading within the market, price changes make remarkably little difference.

To take my situation as an example, I own a 2 bed Maisonette, and given the right circumstances, would like to trade up to a 3 bed house in the same area. At the trough of the market in 2010, my Maisonette was worth about £140k, and the kind of house I would like would have cost about £265k. A cost to change of £125k. Now, after by a huge distance the biggest increase in values over 5 years the area has ever seen, my place is worth about £250k, and the house I'd want is about £400k . A cost to achange of £150k. In other words, despite huge changes in house prices in my area, the difference in cost for me to move is about the price of a top of the range hatchback or (of far more interest to me) a top end upright piano. Frankly, in the greater scheme, that's of little consequence in the context of a long term home.

For first time buyers, the situation is different again. Lets again use my current home as the example, as it's a fairly typical ftb property. In may, it would have probably cost £260k, in November £250k. Yes, the ftb would have saved a headline £10k by waiting until November, but they'd probably have spent about half that in rent in the same period so the net saving is actually about £5k. There's little sign of prices falling much further in the short term, so that saving is probably about as good as it's going to get.

So at best, a 6 Month delay saves a typical FTB £5k ish net. At worst (say from August last year to Feb this) the same 6 Month delay could have cost the same FTB £50k. At at any time in the past 5 years (and all bar about 2 years in the past 20). A six Month delay by an FTB would result in higher prices. So broadly speaking, delay for an FTB would cause a cost rather than a benefit 90% of the time.

So, in summary, for people trading up, the impact iof price changes is limited enough that the right time to buy is essentially whenever it suits you (assuming you're buying and selling at the same time). For an FTB, someone buying in May would probably show a small paper loss now, but will almost certainly come out ahead sooner rather than later. Given that very few people can pick out the 10% of the time when prices will fall, the smart move for most is again to buy when their wider circumstances make it appropriate. Timing the market for a home is generaly a mugs game that most will lose, so no, suggesting that May was a good time to buy is nowhere near as daft as Crashy's comments. . . . . . .but then, very litle is

So simple, and so affordable. Makes you wonder why the government had to step in to prop it all up. :rotfl:


Ever thought of doing BTL seminars?

Bubble_and_Squeak

Jason74 wrote: »

Not really. Now don't get me wrong, I actually agree with you that London prices on the ground have dropped off a little since May, but the key words here are "a little". Homebuyers of course broadly fit into one of two categories. They're either they're trading within the market , or first time buyers . For people trading within the market, price changes make remarkably little difference.

To take my situation as an example, I own a 2 bed Maisonette, and given the right circumstances, would like to trade up to a 3 bed house in the same area. At the trough of the market in 2010, my Maisonette was worth about £140k, and the kind of house I would like would have cost about £265k. A cost to change of £125k. Now, after by a huge distance the biggest increase in values over 5 years the area has ever seen, my place is worth about £250k, and the house I'd want is about £400k . A cost to achange of £150k. In other words, despite huge changes in house prices in my area, the difference in cost for me to move is about the price of a top of the range hatchback or (of far more interest to me) a top end upright piano. Frankly, in the greater scheme, that's of little consequence in the context of a long term home.

For first time buyers, the situation is different again. Lets again use my current home as the example, as it's a fairly typical ftb property. In may, it would have probably cost £260k, in November £250k. Yes, the ftb would have saved a headline £10k by waiting until November, but they'd probably have spent about half that in rent in the same period so the net saving is actually about £5k. There's little sign of prices falling much further in the short term, so that saving is probably about as good as it's going to get.

So at best, a 6 Month delay saves a typical FTB £5k ish net. At worst (say from August last year to Feb this) the same 6 Month delay could have cost the same FTB £50k. At at any time in the past 5 years (and all bar about 2 years in the past 20). A six Month delay by an FTB would result in higher prices. So broadly speaking, delay for an FTB would cause a cost rather than a benefit 90% of the time.

So, in summary, for people trading up, the impact iof price changes is limited enough that the right time to buy is essentially whenever it suits you (assuming you're buying and selling at the same time). For an FTB, someone buying in May would probably show a small paper loss now, but will almost certainly come out ahead sooner rather than later. Given that very few people can pick out the 10% of the time when prices will fall, the smart move for most is again to buy when their wider circumstances make it appropriate. Timing the market for a home is generaly a mugs game that most will lose, so no, suggesting that May was a good time to buy is nowhere near as daft as Crashy's comments. . . . . . .but then, very litle is

just seeing this now
yes, its good analysis
my point about not buying in may is that you would have to compete with 50+ interested parties on a property you have about 30 mins to view and make a decision on. some people on this board think this is an acceptable way to purchase property but personally i prefer to carry on renting until such a time when i can view a place and think about it over the course of several days, not several minutes.

Crashy_Time

That is the spirit:

http://www.rightmove...y-48156296.html

15/01/2015 Price changed: from '£775,000' to '£700,000'
04/12/2014 Price changed: from '£825,000' to '£775,000'
08/11/2014 Price changed: from '£885,000' to '£825,000'
16/10/2014 Price changed: from '£925,000' to '£885,000'
12/09/2014 Initial entry found.

danothy

Crashy_Time wrote: »

That is the spirit:

http://www.rightmove...y-48156296.html

15/01/2015 Price changed: from '£775,000' to '£700,000'
04/12/2014 Price changed: from '£825,000' to '£775,000'
08/11/2014 Price changed: from '£885,000' to '£825,000'
16/10/2014 Price changed: from '£925,000' to '£885,000'
12/09/2014 Initial entry found.

Let's put this in context. The blue points are the actual sale prices for semi-detached houses on Valley Road since 1995. The red points are the asking prices for the property you have detailed above. Massive reduction from the initial asking price indeed ...

Crashy_Time

danothy wrote: »

Let's put this in context. The blue points are the actual sale prices for semi-detached houses on Valley Road since 1995. The red points are the asking prices for the property you have detailed above. Massive reduction from the initial asking price indeed ...

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=45271868&sale=52153733&country=england


Now see if you can join the dots.

danothy

Crashy_Time wrote: »

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=45271868&sale=52153733&country=england


Now see if you can join the dots.

Your point is, unsurprisingly, unclear. The property you linked to is included on my chart, it is the blue point furthest to the right. It is the second highest recorded sale price of a semi-detached house on that street. The asking price of the property you linked to previously, even after the £225,000 asking price reduction it has had already, would still be the third highest recorded sale of a semi-detached house on that street if it had another £200,000 asking price reduction before it sold. Which points are you expecting me to join exactly?

Crashy_Time

danothy wrote: »

Your point is, unsurprisingly, unclear. The property you linked to is included on my chart, it is the blue point furthest to the right. It is the second highest recorded sale price of a semi-detached house on that street. The asking price of the property you linked to previously, even after the £225,000 asking price reduction it has had already, would still be the third highest recorded sale of a semi-detached house on that street if it had another £200,000 asking price reduction before it sold. Which points are you expecting me to join exactly?

The price swings are big, why are people thinking that they could ever achieve these ridiculous prices?

danothy

Crashy_Time wrote: »

The price swings are big, why are people thinking that they could ever achieve these ridiculous prices?

Greed? Incompetence? They were mislead? It's not like it matters anyway, as not achieving an unrealistic price and subsequently lowering it to a realistic one doesn't mean things are crashing if the lower and more realistic prices (the ones that actually sell) are still higher than they have been in the past.

As a completely unrelated point of logic, it should be noted that one can't assume they are right about a market by finding evidence that someone else was wrong about said market.

Bubble_and_Squeak

danothy wrote: »

Greed? Incompetence? They were mislead? It's not like it matters anyway, as not achieving an unrealistic price and subsequently lowering it to a realistic one doesn't mean things are crashing if the lower and more realistic prices (the ones that actually sell) are still higher than they have been in the past.

As a completely unrelated point of logic, it should be noted that one can't assume they are right about a market by finding evidence that someone else was wrong about said market.

lets see if it actually sells before we start saying its a realistic price