House Price Crash Discussion Thread

LisbonLaura

The sooner we return to sustainable loans of 3.5x joint income for your only home, the better.
Also a heavy taxation of second homes.
Perhaps then we will see if there is a 'housing shortage'?

This madness will take years to shake out & has hurt many good folk, as well as enriching many reprobates

carolt

Not daft at all, skap7309, that may well be what's happening. Whilst estate agents want to get a sale over no sale, they also know that future instructions require them to be seen as the agent that delivers the highest prices for their vendors. Also, estate agents can be as pig-headed and stupid as some ordinary mortals, and may not want to accept which way the wind is blowing...!

Anyway, on a similar theme, here's what the FT thinks is happening in the markets, with some choice quotes from the second link:


http://www.ft.com/cms/s/0/f49b4ad4-8e25-11dc-8591-0000779fd2ac.html

http://www.ft.com/cms/s/0/20d093be-915c-11dc-9590-0000779fd2ac.html


"New buyer enquiries have been withering for almost a year, the Royal Institution of Chartered Surveyors reported on Tuesday, and now the first signs are emerging that home owners are rushing to try to sell before the market tumbles. New stock on estate agents books leapt 8.8 per cent in October at the same time as newly agreed sales were lower that at any time since April 1999 when Rics members were first asked how their businesses were faring.

........

By contrast, estate agents have become extremely gloomy about the outlook for property prices as they experience falling demand and an increasing supply of property. Some 34 per cent more surveyors now expect prices to fall than think they will rise over the next three months.

The large negative balance on house price expectations is worse than that recorded in the 2005 slowdown and represents a huge shift in sentiment on a year ago.

In recent years, the Rics survey has proved a reliable early guide to the housing market and its monthly surveys are closely watched by both economists and the Bank of England.

So far, the falls reported by surveyors and estate agents are yet to be seen in national house price inflation measures, which still include the big price rises of last winter and spring. But the Rics survey is corroborated in the October FT house price index, which also found that prices had declined in half England’s regions since June.

.........

Arwel Griffith of WJ Meade Chartered Surveyors in Walthamstow, east London, said: “All poor news on the ‘eastern’ front. Poor enquiries, poor stocks, poor prospects.”

Most agents have so far reported that prices have fallen modestly by between 0 and 2 per cent in their areas over the past three months as weak demand was balanced by tight supply.

But Rics economists said on Monday that the jump in the stock of properties on estate agents’ books would represent a new negative turn in the prospects for house prices if it persisted."

Nenen

skap7309 wrote: »

This may sound daft but does anyone think they have been asked by the E/A not to drop the price in order to attempt to stop prices falling?

Nothing would surprise me wiith Estate Agents!

We've been trying to make an appointment to view a house that came onto the market last week. It is advertised as needing complete modernisation. When we rang the EA we were told they couldn't possibly show us round last Saturday as they had finished viewings for the day (this was 12.20). They told us they would put our name on 'the list' and ring us when they were going to do the next batch of viewings. EA rang and spoke to dh yesterday and said we could probably view next Saturday at 10.00 but they might have to ring and cancel if it was sold before then... who was supposed to buy it if they couldn't see it I wonder???
The EA then rang back this morning to say that Saturday was cancelled as they were 'having some trouble with the elderly vendors'. My guess is that the elderly vendors are not playing ball with the property developer who is lining the EA's pocket! Either that or the property developer is too frightened to go forward in the uncertain market...

The only thing I'm sure of is that I don't trust the EA! I certainly think the EA's are desparately trying to talk the market up.

ManAtHome

skap7309 wrote: »

This may sound daft but does anyone think they have been asked by the E/A not to drop the price in order to attempt to stop prices falling?

Didn't work that way last time round - EAs need turnover to survive, so when sales started drying up, they were actively encouraging people to drop prices. Unfortunately there were regular "green shoots of recovery" from mortgage lenders - when people selling read the "prices up over 1% last month" (recently Nationwide I think), they adjust their expectations and refuse offers.

merlinthehappypig

I think that in this particular instance the agent was actually friendly with the seller and was talking the house up to be 'nice'. The seller has spent a lot of money on the house, but on things personal to her that wouldn't necessarily persuade a buyer to pay more, so might be looking to recoup the money spent.

Interestingly the agent was quite bullish about both houses when we were looking around them and still potential buyers. When she rang for feedback today (another sign of the times - they didn't bother a couple of months back) I told her that both houses were overpriced, in our opinion, and that we weren't interested in either of them at those prices, she ventured that a sizeable reduction might be achieved if we put in an offer! We still declined. I'll give it a week or two and see if we get another phone call.

It does depend a lot on the agent. I rang one today having viewed the house about 4 weeks ago and decided it was too expensive. The agents said they would get close to the asking price no problem at that stage. I asked if it was still for sale and whether the seller would now consider offers. Broadly speaking the reply was 'God yes, in this market. No-one has viewed the house since you came....' I was advised against a 'silly offer'........that's me told then.

Very, very fed up with this now. Ironically it was easier when prices were rising as we didn't have to factor in possible price falls........

carpetbelly

LisbonLaura wrote: »

The sooner we return to sustainable loans of 3.5x joint income for your only home, the better.

Would be nice, but it isn't going to happen... Banks have moved onto affordability which is actually better risk wise and makes it a bit more flexible for people on lower salaries who have proven that they can curb their spending to afford something above 3.5x their price range. And I've seen a few friends able to do that well.

WTF?_2

ManAtHome wrote: »

Didn't work that way last time round - EAs need turnover to survive, so when sales started drying up, they were actively encouraging people to drop prices. Unfortunately there were regular "green shoots of recovery" from mortgage lenders - when people selling read the "prices up over 1% last month" (recently Nationwide I think), they adjust their expectations and refuse offers.

Yep, they'll figure that out eventually. More experienced agents already know it.

However, I suspect that there are a lot of 'Johnny come laterly' types in the EA biz who jumped on the bandwagon in the last decade. All they've known are rising (often rocketing) house prices and they probably believe that all they need to do is keep talking the market up so it gets back to 'normal'.

LisbonLaura

carpetbelly wrote: »

"Banks have moved onto affordability which is actually better risk wise"
= quote]
.....................................................................

Ah yes

& some of those banks are close to 'moving on' terminally.
.............................................................................
But I mustn't say these things, so;

Everything is fine

It's just a blip

The great leader will overcome.

EdInvestor

Interest rates to be cut 3 times next year.


http://www.thisismoney.co.uk/news/article.html?in_article_id=426320&in_page_id=2&ct=5

mystic_trev

EdInvestor wrote: »

Interest rates to be cut 3 times next year.


http://www.thisismoney.co.uk/news/article.html?in_article_id=426320&in_page_id=2&ct=5

Good news for a few.

Unfortunately due to the 'Credit crunch' lendings going to be a lot tighter for the forseeable future!