advice needed,offers rejected, are we expecting too much?

Paul_N_4

EdInvestor wrote: »

Currently the market is rising by around 7%, not dropping.

No. Currently the market is dropping and has been for the past 3 months. Your information is completely false. The housing market is not currently rising by 7%. It is currently dropping.

If you're talking about the trend over the past year, then yes, the market has risen by just under 7%. That's based on the period of the past 12 months. That is not a current trend, and as we know, things have changed drastically in the last few months.

fimonkey

Ed, (and others) I'm interested to hear more of your opinion on the housing market (yes genuinely) as some of what you say makes sense (to a complete amaetuer like me). The housing market IS a large ship that takes along time to turn around/change course compared to some stocks and shares. However does this slowness mean it can also be 'saved' in the short and long term as the Government/BoE have chance to make new policies (invent new price indexes for measuring inflation) and watch their effect? I'm interested to read also (on another thread?) that the BoE reducing interest rates further may lead to another repeat of 2004/5 when ppl thought the market was going to stagnate then but it took off again. Of course the BTL's who are selling now, as well as FTB's are all waiting in the wings ready for the prices to drop so they can snap up again, and won't this alone be a rather big factor in stopping crash?

So out of interest, what's your opinion on where the housing market is now, and where it will be in 1, 2 and 3 years time? Based on this, would you say 'go for it' to an FTB, or 'hold your horses' a wee bit longer?

emmamc252

ok, i'm going to adda nother element to this now. i'm doing a seperate post too but thought i may as well get into it on here too. if you've read my earlier posts at the minute we are thinking that the offer we have made is fair. on the free property pricing sites that are recommended by this site, the house comes up wiht an average valuation of 190,000. the upper valuation is 220,000. the owners currently are marketing the property for 230,000. our offer is 210, so this would seem quite reasonable based on this info too. what i am wondering is where do estate agents get their prices from? i thionk really it is their responsibility to be realistic with clients and then this sirt of thing doesn't happen, after all i would doubt that anyone would buy a house of any value without first checking if they thought it was a fair price?
so as an added question, how reliable are these sorts of sites? and how shopud we ad potential buyers use them?

chriz1000

I’ve just put in an offer on 2 houses with the same estate agent today, both were very similar 3 bedroom detached houses in a desirable area. My offer was the same for both properties and was for 10% under what the properties were listed at.
The sales lady who showed me around was very reluctant to put in such a low offer for the houses, telling me there wasn’t any point as they won’t even consider an offer so low. I have insisted that she goes away and puts in my offers and to come back with some realistic negotiation, I have said I will go with the property that comes back at the right price.

Just looking on nethouseprices.com one of the houses was sold in summer 2004 for more than what my offer is. Theoretically if the house wasn’t overpriced in 2004 between summer 2004 and now how much should the property have increased in value by?

I’m not desperate to buy at the moment, but if I can snap up a bargain for my first home I’ll be more than happy.

Magentasue

Estate agents guess like the rest of us! They look at what houses have been selling at and make at educated guess at what people will pay for the property they value. We had four quotations and went for a middle one but weren't prepared to drop - well, we gave a couple of thousand because that seemed part of the game. If we'd gone for the higher valuation, we'd have been prepared to drop more.

In the past, we've had to take our house of the market because we didn't get us an offer that allowed us to buy what we wanted. We just waited until the market picked up - this time it's different, we're in a hurry and moving without mortgages.

Just as a house is only worth what someone will pay, sometimes you can only afford to reduce your price so far when you're selling before it isn't worth moving.

If you look at enough houses and make enough offers, one will go through. You're right not to pay more than you think a house is worth but this will also mean that many houses will not be available to you.

merlinthehappypig

boinging wrote: »

EdInvestor wrote: »

Talk about misleading LOL! The property market is not rising by 7%, it's falling at roughly 1% per month. You are looking at the YoY position, which is actually of no concern for someone looking to buy today (as the OP is).

If a house goes on the market today, at current trends it will be worth 1% less next month - how is that a 7% rise?

Are you the holder of a crystal ball? How can you say what % house will fall? If they are going down 1% per month at the start of a downward turn (with still plenty more credit crunching to come), it would only take 12 months at 2% decrease for over a 20% fall YoY (which as I've already said is not the best way to look at things...)

I don't think it's worth arguing this point with Edinvestor, boinging. He said the same before and several people answered him and asked him to back what he says and he hasn't. You are absolutely right and, frankly, despite his previously good reputation (and I have appreciated some of his investment posts) he is talking complete rubbish here.

PJD

seraphina wrote: »

Please be patient! :j I know a few people who have put in low offers on houses recently to be told by the EAs to get lost. A few weeks later the EA has phoned them and asked whether they were still interested in proceeding with their original offers!

^^^ I agree. Be patient. It's a buyers market

From Fool.com

"...the market is on your side - because it is a buyer's market. This occurs when there are fewer buyers for every seller. The average number of house hunters per estate agent has dropped by 21% since October 2006, from 360 to 282, while the average number of properties per agent has risen by 2% over the same period..."

carolt

EdInvestor wrote: »

...its a 9ish percent drop in a market thats suppose to drop by 10percent anyway...!!/quote]

This is the kind of nonsense that misleads FTBs.Housing markets take YEARS to drop by a double digit amount.Currently the market is rising by around 7%, not dropping.

During the last crash, the total fall from peak to trough was only 17% and that took more than three years.The property market is not like the stockmarket.It moves very slowly indeed - prices have still not gone into negative territory yet in the US for instance.As for people who talk about falls of 30 or 40% , this is complete and utter rubbish.

Wrong in so many ways.

Others have pointed out the errors in your first point. To correct the others:

Prices fell by far more than 17% in many parts of the UK in the last crash. Also, this was at a time of HIGH INFLATION compared to today. As people who delight in telling us that there can't be a crash this time love to point out - interest rates were at 15% then. So whilst NOMINAL house prices may have only fallen by 17% then on average (and I'm not even sure that is correct - source please?), REAL house prices fell by far more. That is, the price of your house compared to average earnings or what else you could have bought with your money. This time round, salaries are not shooting up and official inflation is only 2.1%, so MUCH GREATER NOMINAL FALLS ie the actual figure, are required to return house prices to long term averages compared to salaries.

Secondly, I don't know where you're getting your figures for the US from, but have a look here:

http://www.ft.com/cms/s/0/6f0168b8-8268-11dc-a5ae-0000779fd2ac.html (not the most recent figures - presumably it's worse since)

"The median value of an existing house fell 4.2 per cent to $211,700 in September compared with a year ago."

Or for an in-depth look at one particularly hard-hit area, see here:

http://news.bbc.co.uk/1/hi/business/7070935.stm - in particular look at the map - truly shocking, awful stuff.

So before you have the temerity to criticise others for misleading FTB's, I think it is essential that you bother to check - rather than just invent - your own facts.

My facts are all checked and referenced - unless you care to argue with the FT and the BBC as well? YOURS ARE NOT.

Do not post on here again unless you post proof of your random assertions and, by the way, we are still waiting for the proof of locations where prices actually rose during the last crash - don't think you got away with that load of bull, either)......

EdInvestor

Let's just have a look at how prices work courtesy of a graph from what I imagine is one of your favourite websites:

http://www.housepricecrash.co.uk/indices-halifax-national.php

Now if you scroll down the table you can see that on a month by month basis, house prices frequently go up and down, indeed they sometimes even stay the same.This m-o-m change will affect the yearly price change (next column) by increasing or decreasing the rate of growth.

Thus because there have been rfalls in the last couple of months, this has reduced the annual rate of growth this year from around 9% to around 7%. That is, instead of rising by 9% p.a, prices are currently rising by 7% pa..There has been a reduction in the rate of growth.

So we are not talking about price falls, we are talking about falls in the rate of growth of prices.Note that it is quite common for prices to fall in the winter months and then rise in the spring and summer.

Have a look at the graph on the right.It shows what appears to be a lareg price fall in 2004 - 05. There were month-on-month falls then, because interest rates were pushed up to take some steam out of the market - much like today. .

But annual prices did not fall.

We do not talk about the great house price crash of 2005, do we? That's because it didn't happen, even though the graph makes it appear there was a fall. This is the mistake people make by extrapolating from m-o-m price falls to anual figures.

IMHO something similar to 2004-05 will happen this time.That's what the Bank of England wants to achieve at any rate - a pause in the rate of growth.Not a price collapse.

lynzpower

The sales lady who showed me around was very reluctant to put in such a low offer for the houses, telling me there wasn’t any point as they won’t even consider an offer so low. I have insisted that she goes away and puts in my offers and to come back with some realistic negotiation, I have said I will go with the property that comes back at the right price.

Every EA will say this. I was told to. they are acting for the VENDOR and are obliged to try to get the best price.

DONT FORGET ALL OFFERS MUST BE GIVEN TO THE VENDOR IN WRITING, ask for proof of this if you dont believe its happened. if it hasnt report them under the EA act.