price drops #2

apuleius

The last thread seemed to go off topic. So can we keep to my original post please. Was dejected earlier this week when my daughter's projected purchase collapsed (she is ftb in London), however there is now real evidence that prices are falling. Many properties that I have seen marketted in the first quarter of the year are still unsold with up to 30k being slashed off the prices and new stuff is coming on at much more realistic prices. It is now possible to find one bedroom flats selling for c. 250k i.e stamp duty tax threshold. Before Christmas this was impossible. Even EAs are telling me this is so. Now we're delighted....looks like we will be the winners in all of this.
More anecdotal evidence please....

tomstickland

I've been monitoring right move in my local area using the Propertybee toolbar. Approximately one property per page was showing a price reduction within 7 days of me starting to monitor. Typically dropping £5K or £10K off properties in the £80-£150K area.

m00m00

well, I've been doing a little bit of property bee dabbling as a few people might know


I would say that on average 10-15% of all properties listed in an area I'm tracking is reduced in a month, with the median discount being around 5k, and around 3-4%

d900

property in my area hasnt budged much BUT nothing is selling.

a friend who started on 220 and went down to 209 after 4 weeks has just been told to go to 195.

The thing is while he is keen to sell its an iffy situation as no one else locally is lowering the price and for 195 u can get some very tatty houses (that are not selling as they are a mess inside) the estate agent just said he should be leading the way a 25k price drop in 5 weeks seems a bit much especially as no one else in the area is doing it.

My friend then called the EA back and asked if they had any jobs going the nice man informed him that they were actually letting people go as its so hard to sell these days.

seems to me the market is like this:

people are having issues borrowing money.
people can see prices coming down so they wait to buy
people selling dont lower prices as no one else is lowering them and are also in no rush to move as they are happy to see everyones price go down.
basically everyones waiting for something to happen =- no doubt a media led price crash will happen eventually and we can all get on with our lives

gussie

Two local (same street) properties ... West Berkshire

£344,950 (sold for £272,500 in 2006) 2 months on market 4 Bed Detached

£329,950 was £332,500 was £339,950 (sold for £225,000 in 2004) 4 months on market 4 Bed Link-Detached

Would not be surprised to see another easy £20k knocked off before long if they really want to sell.

SingleSue

Looking through our property special in our local paper last night was pretty eye opening. In days gone past you may have seen the odd one or two reduced property banners over the whole approx 15 page pull out, last night, it was virtually every house!

Also just looking around Right Move for property prices in this area and they seem a wee bit cheaper than they were a couple of months ago when you would have struggled to find a 3 bedroom house in a nice area for under 200k, now you can find loads.

I am in East Anglia.

WTF?_2

d900 wrote: »

property in my area hasnt budged much BUT nothing is selling.

a friend who started on 220 and went down to 209 after 4 weeks has just been told to go to 195.

The thing is while he is keen to sell its an iffy situation as no one else locally is lowering the price and for 195 u can get some very tatty houses (that are not selling as they are a mess inside) the estate agent just said he should be leading the way a 25k price drop in 5 weeks seems a bit much especially as no one else in the area is doing it.

My friend then called the EA back and asked if they had any jobs going the nice man informed him that they were actually letting people go as its so hard to sell these days.

seems to me the market is like this:

people are having issues borrowing money.
people can see prices coming down so they wait to buy
people selling dont lower prices as no one else is lowering them and are also in no rush to move as they are happy to see everyones price go down.
basically everyones waiting for something to happen =- no doubt a media led price crash will happen eventually and we can all get on with our lives

What's happening is a Mexican stand-off.

People don't want to 'sell for less than my house is worth' so prices are sticky.

Takes some time before the price drops start and then those that can hold on will try to grim it in there over the course of the next few years whilst many others will be forced to sell BTL 'investments' or heavily MEWed properties whilst there's still equity. Not to mention repossessions from people who simply bit off more mortgage debt than they could chew and of course builders flogging off new stock cheaply as the demand recedes.

andysstuff_2

!!!!!!? wrote: »

What's happening is a Mexican stand-off.

Exactly what happened in the late 80's - very little sales in 1989 while people waited to see what happened, followed by 3 years of falls of 10% pa, followed by a further period of no movement.

Would geuss something is similar is happening this time.

Locally not a lot of reduced asking prices, but stuff is just not selling. Flat above my parents bought last year by a speculator for about £210K, tarted it up and no interest whatsoever at £250K. Apparently he's got another 5 similar that he can't sell. That's a lot of money to be tied up doing nothing.

MUDGUTS

Two questions:

What are the strong and reliable indicators we have hit the bottom of the market?

What is the current predicted time to reach this point?

Generali

MUDGUTS wrote: »

Two questions:

What are the strong and reliable indicators we have hit the bottom of the market?

You can never tell. Annecdotally, I would say it's when you start getting articles in the paper saying that its never going to be worth buying again as prices just keep falling.

MUDGUTS wrote: »

What is the current predicted time to reach this point?

I have a (much derrided) theory that in the longer-term, house prices are destined to fall as baby boomers with inadequate pensions look to sell up and swap some of their equity for cash/income so falls could continue for a very long time IMO.

Goldman Sachs did a piece last week looking at previous house price crashes across the world and comparing them to what is happening in the US now and concluded that top-to-bottom is usually 3-4 years. That pretty much chimes with what happened in the UK in the early 90s although house prices didn't start to rise again for another couple of years after they stopped falling (ie stopped falling in about 1994, started rising in about 1996).

MUDGUTS

Many thanks Generali.

I was assuming about five years or so. At present I don't know where in the world I'll be by then, (highly doubt the UK) but if I did want to buy here then that would be about the time I'm thinking of.