Has the market crashed?

MobileSaver

fackers_2 said:

MobileSaver said:

fackers_2 said:

jimbog said:

fackers_2 said:

In my experience, I believe so.  I have been aggressively looking at houses, noting down listing prices then their reduced price etc. Our large search area is within the SW stretching as West as Bristol and East as Swindon. Almost all houses we are interested in are on for minimum 2 weeks before any change, in that there is almost always a price drop of around £20k-£30k

Is a ‘crash’ in asking prices is the same as a crash in house prices?

Overall from what I’m seeing, there’s already a drop of at least 5% happening - Off of the original listing price. 

So just to be clear - if I put my house on the market today with an asking price 10% above what I think it's really worth and then drop the price by 5% in two weeks time then in your view that's a "crash"?!?! Er, yeah, ok, keep taking those meds!

A crash can be defined as a common significant drop in prices across the board. If the demand isn't there of course prices are going to drop, ... all I can go off is what the data is showing me on my screen from my specific search terms.

You are completely missing the point raised by myself and @jimbog. The data you are looking at is "asking prices" which are not the same as sold prices.

If someone is kite-flying and then drops their asking price by 5% that does not mean house prices in that area have dropped by 5%!

A case in point is a friend of mine who recently dropped his asking price by £300k (a 30% reduction), the thing is that he put the house on the market a few months ago at £300k above what everyone thought the house was worth so your "data on your screen" would show a huge price drop but it is utterly meaningless.

fackers_2 said:

If the demand isn't there of course prices are going to drop,

You do not seem to understand how a market economy works. Prices are dependant on two things, supply and demand, so there is no "of course" if only one of those things reduces. If both supply and demand fall at the same rate then prices stay the same; for house prices to drop you need demand to fall quicker than supply. The bit the HPC crowd always gloss over is where is all this supply of cheap housing going to come from?

GDB2222

MobileSaver said:

fackers_2 said:

MobileSaver said:

fackers_2 said:

jimbog said:

fackers_2 said:

In my experience, I believe so.  I have been aggressively looking at houses, noting down listing prices then their reduced price etc. Our large search area is within the SW stretching as West as Bristol and East as Swindon. Almost all houses we are interested in are on for minimum 2 weeks before any change, in that there is almost always a price drop of around £20k-£30k

Is a ‘crash’ in asking prices is the same as a crash in house prices?

Overall from what I’m seeing, there’s already a drop of at least 5% happening - Off of the original listing price. 

So just to be clear - if I put my house on the market today with an asking price 10% above what I think it's really worth and then drop the price by 5% in two weeks time then in your view that's a "crash"?!?! Er, yeah, ok, keep taking those meds!

A crash can be defined as a common significant drop in prices across the board. If the demand isn't there of course prices are going to drop, ... all I can go off is what the data is showing me on my screen from my specific search terms.

You are completely missing the point raised by myself and @jimbog. The data you are looking at is "asking prices" which are not the same as sold prices.

If someone is kite-flying and then drops their asking price by 5% that does not mean house prices in that area have dropped by 5%!

A case in point is a friend of mine who recently dropped his asking price by £300k (a 30% reduction), the thing is that he put the house on the market a few months ago at £300k above what everyone thought the house was worth so your "data on your screen" would show a huge price drop but it is utterly meaningless.

fackers_2 said:

If the demand isn't there of course prices are going to drop,

You do not seem to understand how a market economy works. Prices are dependant on two things, supply and demand, so there is no "of course" if only one of those things reduces. If both supply and demand fall at the same rate then prices stay the same; for house prices to drop you need demand to fall quicker than supply. The bit the HPC crowd always gloss over is where is all this supply of cheap housing going to come from?

I think one of the lenders reported a drop of 0.9% month to month. This was on actual transactions. However, currently people are completing based on mortgage offers made months ago. 

New mortgage offers are not just at higher interest rates, but also for significantly lower advances. That’s bound to have a huge impact. People renting will not be looking at lower outgo compared to rent. BTL landlords won’t be looking at the rent easily covering their mortgage. People looking to trade up simply may not be able to.  So, transactions will dry up. 

There’s going to be lots of people who will simply refuse to sell if prices drop, or simply cannot sell. There are others for whom it might not matter much. 

As an example, My wife and I are rattling around in the house we brought the family up in, and we ought to downsize. Any money generated will go to the kids to help them buy. So, if the market drops, it will be broadly neutral for us as a family. I hope!

MobileSaver

GDB2222 said:

I think one of the lenders reported a drop of 0.9% month to month. This was on actual transactions.

That wouldn't surprise me and pretty much proves the point that fackers seeing 5% drops in asking prices doesn't correspond to a 5% "crash" in house prices.

GDB2222 said:

There’s going to be lots of people who will simply refuse to sell if prices drop, or simply cannot sell. There are others for whom it might not matter much.

Exactly. If/when prices drop it's pretty much a certainty that supply will drop too - the unknown is by how much but the last time this happened transactions dropped by 50% so literally half as many people were able to buy and sell property; it's another of those inconvenient truths the HPC crowd like to gloss over while celebrating falls in house prices.

badger09

Exodi said:

lookstraightahead said:

GAMBITv5 said:

All depends on the market you’re positioned in.

We sold in the aftermath of the mini budget, was on Rightmove less than 24hrs. Sold to FTBs for the £375k ask.

estate agents here are not reporting the shock and awe elsewhere on the country

I don't think any estate agent will acknowledge it as it affects their business. And sold prices won't have come through as data yet. Also some still have low interest rates in place, meaning time is of the essence for them still.

What I don't understand is sellers who have a buyer now expecting buyers to wait.

Indeed, there is a bit of a stampede to complete transactions to lock in the old mortgage offers - buyers are understandably desperate not to reapply.

My sisters partners brother has just 'completed' on a new build property - but the property isn't even ready yet and he can't move in. He reached an agreement to complete on the house on this basis so he didn't lose his original mortgage rate.

I'd usually heavily advise against doing something this reckless, but he has said that this is about a £400 p/m saving... can't blame him to be honest.

BIB I’d be interested to know which lender has agreed to release mortgage funds to buy a property which isn’t ready for occupation. 

badger09

[Deleted User] said:

Noneforit999 said:

Exodi said:

[Deleted User] said:

As someone who would like to buy I'm holding off for now.

I think many will be doing the same.

You have many sellers, who have seen there houses absolutely balloon in value over the past couple of years (using my house as example I bought for £300k in mid 2019, and have seen similar houses for sale during this summer up for sale between £400k - £500k)... absolutely madness.

You have to wait for these sellers to come back to Earth which is not going to be quick. Take the OP - "it doesnt feel over priced compared to recent sales in the summer". This will be a common theme amongst current sellers, and if they're not willing to come back to Earth, they'll see demand disappear.

People just can not afford high energy bills, soaring food prices, increased fuel prices, with pay-rises that in most cases are real terms pay cuts, on top of ~£500 extra on a mortgage to buy someones now overpriced house.

I wouldn't dream of buying in the next few months.

What is going to be different in six months time though? Even if house prices drop say 10% in that time, unless you are a FTB then your existing house will have likely dropped a similar amount so you have less equity to roll onto a new house and unless mortgage rates drop substantially, its going to make little difference.

If you put moving off for several years then things may change (perhaps) but I don't see how 6-12 months is going to look much different from now.

More like six years time. Get the recession over with, election at the end of 2024, then time for the new government to make a little progress towards stabilising things.

The UK won't be right for at least a decade, probably much longer. Brexit isn't going away soon and the last 12 years have really racked up the debt - government, household, and social. We also have 2 million with long COVID, massive loss of productivity and massive increase in healthcare and benefits costs.

So are you going to wait 6 years? Or decade until you buy? In the meantime, you are presumably happy to pay your landlord’s mortgage, rather than your own. 

You sound remarkably like another long term poster who has done something similar. 

Good luck with your plan, I hope it works out for you. 

badger09

Bookowl said:

babyblade41 said:

From a seasoned buyer & occasional seller.. this is no different than a lot of times, peaks & troughs  over a 5 year period.

Really depends on what you want out of a property, if it's your long term home then general markets shouldn't really come into the equation, they go , they go down but usually rise over a certain period of time

If you are looking to invest and expect a short term high return then you will be sadly disappointed , 

If you want a home & love the house you are looking to buy & as long as any valuations are pretty much spot on then all is fine 

Thanks for this information as a FTB is the valuation done by a mortgage company does is it the same as the one that the surveyor does?

As  a FTB I’m all new to this - very daunting. 

The mortgage company will do their own valuation. Basically, what they need to know is that they could recoup their money if you didn’t pay your mortgage & they had to repossess & sell it. Some will allow you to use their surveyor for your own valuation, for a fee of course. 

If you instruct your own surveyor, which is generally a very good idea, you have to tell them you want them to value the property as well as conduct a survey. 

IMO spending several £000s without your own survey & valuation is madness. Unless you know a lot more than most people do😉

GDB2222

MobileSaver said:

GDB2222 said:

I think one of the lenders reported a drop of 0.9% month to month. This was on actual transactions.

That wouldn't surprise me and pretty much proves the point that fackers seeing 5% drops in asking prices doesn't correspond to a 5% "crash" in house prices.

GDB2222 said:

There’s going to be lots of people who will simply refuse to sell if prices drop, or simply cannot sell. There are others for whom it might not matter much.

Exactly. If/when prices drop it's pretty much a certainty that supply will drop too - the unknown is by how much but the last time this happened transactions dropped by 50% so literally half as many people were able to buy and sell property; it's another of those inconvenient truths the HPC crowd like to gloss over while celebrating falls in house prices.

I don’t know why a 50% drop in transactions matters to most people?  It must worry estate agents, ofc. 

Sarah1Mitty2

MobileSaver said:

fackers_2 said:

MobileSaver said:

fackers_2 said:

jimbog said:

fackers_2 said:

In my experience, I believe so.  I have been aggressively looking at houses, noting down listing prices then their reduced price etc. Our large search area is within the SW stretching as West as Bristol and East as Swindon. Almost all houses we are interested in are on for minimum 2 weeks before any change, in that there is almost always a price drop of around £20k-£30k

Is a ‘crash’ in asking prices is the same as a crash in house prices?

Overall from what I’m seeing, there’s already a drop of at least 5% happening - Off of the original listing price. 

So just to be clear - if I put my house on the market today with an asking price 10% above what I think it's really worth and then drop the price by 5% in two weeks time then in your view that's a "crash"?!?! Er, yeah, ok, keep taking those meds!

A crash can be defined as a common significant drop in prices across the board. If the demand isn't there of course prices are going to drop, ... all I can go off is what the data is showing me on my screen from my specific search terms.

You are completely missing the point raised by myself and @jimbog. The data you are looking at is "asking prices" which are not the same as sold prices.

If someone is kite-flying and then drops their asking price by 5% that does not mean house prices in that area have dropped by 5%!

A case in point is a friend of mine who recently dropped his asking price by £300k (a 30% reduction), the thing is that he put the house on the market a few months ago at £300k above what everyone thought the house was worth so your "data on your screen" would show a huge price drop but it is utterly meaningless.

fackers_2 said:

If the demand isn't there of course prices are going to drop,

You do not seem to understand how a market economy works. Prices are dependant on two things, supply and demand, so there is no "of course" if only one of those things reduces. If both supply and demand fall at the same rate then prices stay the same; for house prices to drop you need demand to fall quicker than supply. The bit the HPC crowd always gloss over is where is all this supply of cheap housing going to come from?

Prices are dependant on three things, demand, sentiment, and cost of borrowing, you claim that sales fell by 50% in the past, well that was mainly due to poor sentiment and lack of funds preventing people making a move  and shows that true demand for shelter isn`t really a major part of housing costs.

BV88

MobileSaver said:

GDB2222 said:

I think one of the lenders reported a drop of 0.9% month to month. This was on actual transactions.

That wouldn't surprise me and pretty much proves the point that fackers seeing 5% drops in asking prices doesn't correspond to a 5% "crash" in house prices.

GDB2222 said:

There’s going to be lots of people who will simply refuse to sell if prices drop, or simply cannot sell. There are others for whom it might not matter much.

Exactly. If/when prices drop it's pretty much a certainty that supply will drop too - the unknown is by how much but the last time this happened transactions dropped by 50% so literally half as many people were able to buy and sell property; it's another of those inconvenient truths the HPC crowd like to gloss over while celebrating falls in house prices.

A drop in prices in no way means a certainty that supply will drop. There may be less speculative sellers, but housing supply can and should be measured in ‘months of supply’. This is the number of months it would take to sell all current available inventory at the current sales pace if no new properties came into the market. 

This data is very mature in the USA and quite revealing. Looking only at existing homes, not new builds, the months of supply has increased from 1.7 in December 2021 to 3.2 in October. This is an almost 100% increase in supply of existing homes for sale, during a period of falling prices. Even more revealing is that this is a country where selling your home now means giving up your 3% 30 year fix if you sell your home, so there is a huge disincentive not to sell in the existing home stock. Remember this data excludes new build supply.  Exactly the same dynamic is playing out in the UK. This may only be anecdotal evidence but within 0.5 miles of my search area, average available stock is around 120 compared to 35 during the covid boom. New listings seem slower but now basically everything just sits unsold. 

The point you are missing is you don’t need a rush of new sellers to increase supply when there is a dramatic drop in the pace of sales, which is exactly what is happening. Indeed you can have a dramatic fall in the pace of new listings coming onto the market, but if the pace of sales falls even more dramatically then supply increases. Again this is precisely what is happening as it takes longer for existing stock to sell. 

jimbog

[Deleted User] said:

More like six years time. Get the recession over with, election at the end of 2024, then time for the new government to make a little progress towards stabilising things.

The UK won't be right for at least a decade, probably much longer. Brexit isn't going away soon and the last 12 years have really racked up the debt - government, household, and social. We also have 2 million with long COVID, massive loss of productivity and massive increase in healthcare and benefits costs.

Are you suggesting the OP to take their property off the market and then wait for ten years? Trying to time the market is a mugs game.

A home should be a place to live rather than an investment. If you are in the financial position to do so, and want to, then why pay off a landlord's mortgage by renting - whether if it's a Meadowbank bedsit or a five bedroomed Kensington mansion?

OP: Look at your specific situation. You say you're in a desirable area and asking for £340K seems to have been a good decision judging by the renewed interest thus far. If you have no luck then wait until the spring until things settle down a bit.

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