How far will house prices fall [volume 4]
Discussion
Pork said:
I'm not sure if it is psychological but it does seem that the EAs are being a little more attentive than earlier in the year.
My senses tell me lots of people are holding off....just won't be able to evidence that until 3 or 6 months down the line.
Agreed,My senses tell me lots of people are holding off....just won't be able to evidence that until 3 or 6 months down the line.
I don’t think anyone reasonably expected to see an immediate and startling reaction from the market with prices slashed by 20% across the board within a few weeks. 3-6+ months sounds right, particularly as data often follows quite slowly. Although I did just read that Zoopla is particularly pessimistic about house prices across the board.
There are some elements that have occurred more quickly than expected:
1) New Build Developers already talking about slashing prices p/sqft as reported by a couple of the papers (if they can be trusted of course)
2) Share prices for developers/agents falling the next working day (hence the big 30-40% drop we saw and has been maintained, and continued to drop ) e.g. today another 3-6% drop
3) The start of large banks in Asia refusing to lend against London property – I didn’t think Singapore banks would intervene, they must be feeling quite exposed/nervous.
4) The number of properties and reductions for my search areas are markedly up
5) Sentiment from friends with large property portfolios who were previously very bullish about property have now become quite concerned. I wasn’t really expecting this until a few months down the line. It seems they are overleveraged and rely on being able to flip properties quickly/profitably to pay the mortgages on the remaining portfolio.
6) The large amount of people pulling out of deals, I thought this would be to a lesser amount than we have seen. I guess my view taken from the fact that people were quite bullish about property, but I think it just highlights how anxious alot of people are about the stability of prices and whether the current pricing is reflective of true market valuation or a result of short term cheap money and a nagging fear that prices only go up.
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?Next door sale fell thru over the weekend. £1.2m bucks. Buyer blamed brexit but neighbour thinks he got cold feet on a 600k mortgage.
Mind you same buyer pulled out of a cheaper 900k house to pursue this one so too lost sales due to one dick.
Not sure what I'd do atm
Mike
Edit not bucks ie dollars Buckinghamshire - princes risborough.
Mind you same buyer pulled out of a cheaper 900k house to pursue this one so too lost sales due to one dick.
Not sure what I'd do atm
Mike
Edit not bucks ie dollars Buckinghamshire - princes risborough.
Edited by mikees on Monday 4th July 20:53
V6Alfisti said:
Agreed,
I don’t think anyone reasonably expected to see an immediate and startling reaction from the market with prices slashed by 20% across the board within a few weeks. 3-6+ months sounds right, particularly as data often follows quite slowly. Although I did just read that Zoopla is particularly pessimistic about house prices across the board.
There are some elements that have occurred more quickly than expected:
1) New Build Developers already talking about slashing prices p/sqft as reported by a couple of the papers (if they can be trusted of course)
2) Share prices for developers/agents falling the next working day (hence the big 30-40% drop we saw and has been maintained, and continued to drop ) e.g. today another 3-6% drop
3) The start of large banks in Asia refusing to lend against London property – I didn’t think Singapore banks would intervene, they must be feeling quite exposed/nervous.
4) The number of properties and reductions for my search areas are markedly up
5) Sentiment from friends with large property portfolios who were previously very bullish about property have now become quite concerned. I wasn’t really expecting this until a few months down the line. It seems they are overleveraged and rely on being able to flip properties quickly/profitably to pay the mortgages on the remaining portfolio.
6) The large amount of people pulling out of deals, I thought this would be to a lesser amount than we have seen. I guess my view taken from the fact that people were quite bullish about property, but I think it just highlights how anxious alot of people are about the stability of prices and whether the current pricing is reflective of true market valuation or a result of short term cheap money and a nagging fear that prices only go up.
It makes sense though. It's better to react quickly now and get rid of stuff rather than wait until the effects are obvious. Then you're likely to make bigger losses once the trends are obvious and create a falling market as people see price reductions, so offer less and thus create even more reductions. I don’t think anyone reasonably expected to see an immediate and startling reaction from the market with prices slashed by 20% across the board within a few weeks. 3-6+ months sounds right, particularly as data often follows quite slowly. Although I did just read that Zoopla is particularly pessimistic about house prices across the board.
There are some elements that have occurred more quickly than expected:
1) New Build Developers already talking about slashing prices p/sqft as reported by a couple of the papers (if they can be trusted of course)
2) Share prices for developers/agents falling the next working day (hence the big 30-40% drop we saw and has been maintained, and continued to drop ) e.g. today another 3-6% drop
3) The start of large banks in Asia refusing to lend against London property – I didn’t think Singapore banks would intervene, they must be feeling quite exposed/nervous.
4) The number of properties and reductions for my search areas are markedly up
5) Sentiment from friends with large property portfolios who were previously very bullish about property have now become quite concerned. I wasn’t really expecting this until a few months down the line. It seems they are overleveraged and rely on being able to flip properties quickly/profitably to pay the mortgages on the remaining portfolio.
6) The large amount of people pulling out of deals, I thought this would be to a lesser amount than we have seen. I guess my view taken from the fact that people were quite bullish about property, but I think it just highlights how anxious alot of people are about the stability of prices and whether the current pricing is reflective of true market valuation or a result of short term cheap money and a nagging fear that prices only go up.
NRS said:
It makes sense though. It's better to react quickly now and get rid of stuff rather than wait until the effects are obvious. Then you're likely to make bigger losses once the trends are obvious and create a falling market as people see price reductions, so offer less and thus create even more reductions.
Absolutely, I just thought they would be a little more bullish in the immediate days after.I certainly think the way you depicted, i.e dump now whilst some people may still bite and before the reality of the situation becomes too evident.
thelittleegg said:
Just had a blanket e-mail from an agent who I'm registered with, they're doing an 'open house' on a load of properties this Saturday. Desperately trying to whip up some enthusiasm I guess, it's not a sales technique I've experienced from an estate agent before.
"Very Motivated Vendors" - people baling out of the market on property that's clearly overvalued/over leveraged.....?South London Estate Agent said:
Good morning,
Please see below for a fantastic selection of properties available for sale with the times we are there on Saturday 09/07/2016.
These properties are priced to sell and we have the fortune of working with a number of very motivated vendors.
Availability for the available time slots is filling up so please contact me on 020 8 to arrange your viewing or alternatively simply reply to this email; I would be happy to provide you with any further information you require and the full address.
Due to the levels of interest if you do not confirm the viewing I cannot guarantee you will be able to view the property.
List of 12 properties followed...
Please see below for a fantastic selection of properties available for sale with the times we are there on Saturday 09/07/2016.
These properties are priced to sell and we have the fortune of working with a number of very motivated vendors.
Availability for the available time slots is filling up so please contact me on 020 8 to arrange your viewing or alternatively simply reply to this email; I would be happy to provide you with any further information you require and the full address.
Due to the levels of interest if you do not confirm the viewing I cannot guarantee you will be able to view the property.
List of 12 properties followed...
ks sometimes!Lots of "REDUCED!" type emails coming through to us from EAs, this week.
We're looking in the Cobham area, so a leafy part of Surrey that has seen big rises.
We're seeing 5-7% come off the asking prices of a few of the houses we've been tracking across the referendum.
Mrs9's best mates also had their buyer pull out of their flat sale in Earlsfield, SW London. In order to keep their chain alive, they have apparently accepted an offer £70k less than the original offer. My assumption is that it's well over 10% less than the original offer so presumably something circa 15% less than asking (pre-Brexit).
That's a fair drop. I've always been someone who'd feel a bit 'cheeky' asking for a 10-20% reduction on asking price but clearly people will consider it at the moment, especially if they want to keep a chain alive.
We're continuing to look and may offer on the right place but I suspect I'll be more aggressive with my offer than I would have been say 6 months ago.
Will follow this thread with interest.
We're looking in the Cobham area, so a leafy part of Surrey that has seen big rises.
We're seeing 5-7% come off the asking prices of a few of the houses we've been tracking across the referendum.
Mrs9's best mates also had their buyer pull out of their flat sale in Earlsfield, SW London. In order to keep their chain alive, they have apparently accepted an offer £70k less than the original offer. My assumption is that it's well over 10% less than the original offer so presumably something circa 15% less than asking (pre-Brexit).
That's a fair drop. I've always been someone who'd feel a bit 'cheeky' asking for a 10-20% reduction on asking price but clearly people will consider it at the moment, especially if they want to keep a chain alive.
We're continuing to look and may offer on the right place but I suspect I'll be more aggressive with my offer than I would have been say 6 months ago.
Will follow this thread with interest.
thelittleegg said:
Just had a blanket e-mail from an agent who I'm registered with, they're doing an 'open house' on a load of properties this Saturday. Desperately trying to whip up some enthusiasm I guess, it's not a sales technique I've experienced from an estate agent before.
Few years ago, and in the NW, but my daughter's house was sticking so the agent did an open house. Two women turned up and both wanted it, and then got into a bidding war. Bizarre really - the house had sat on the market with barely a viewing for several months.South London Estate Agent said:
Good morning,
Please see below for a fantastic selection of properties available for sale with the times we are there on Saturday 09/07/2016.
These properties are priced to sell and we have the fortune of working with a number of very motivated vendors.
Availability for the available time slots is filling up so please contact me on 020 8 to arrange your viewing or alternatively simply reply to this email; I would be happy to provide you with any further information you require and the full address.
Due to the levels of interest if you do not confirm the viewing I cannot guarantee you will be able to view the property.
List of 12 properties followed...
Please see below for a fantastic selection of properties available for sale with the times we are there on Saturday 09/07/2016.
These properties are priced to sell and we have the fortune of working with a number of very motivated vendors.
Availability for the available time slots is filling up so please contact me on 020 8 to arrange your viewing or alternatively simply reply to this email; I would be happy to provide you with any further information you require and the full address.
Due to the levels of interest if you do not confirm the viewing I cannot guarantee you will be able to view the property.
List of 12 properties followed...
"Open house" and "appointment" seem at odds with each other though.
Sheepshanks said:
Few years ago, and in the NW, but my daughter's house was sticking so the agent did an open house. Two women turned up and both wanted it, and then got into a bidding war. Bizarre really - the house had sat on the market with barely a viewing for several months.
"Open house" and "appointment" seem at odds with each other though.
An open house on a single property isn't entirely odd, typically where it needs to be sold quickly."Open house" and "appointment" seem at odds with each other though.
However very odd when the open house includes 12 properties !
Sheepshanks said:
What do you read into it - that there's a lot of sellers desperate to get out quickly?
That would be my guess, I can honestly say I have never heard or seen that kind of open house arrangement before.You could put it down to the estate agents unique approach, but it sounds like the original poster hasn't seen that from them before either.
Blue62 said:
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
V6Alfisti said:
Sheepshanks said:
Few years ago, and in the NW, but my daughter's house was sticking so the agent did an open house. Two women turned up and both wanted it, and then got into a bidding war. Bizarre really - the house had sat on the market with barely a viewing for several months.
"Open house" and "appointment" seem at odds with each other though.
An open house on a single property isn't entirely odd, typically where it needs to be sold quickly."Open house" and "appointment" seem at odds with each other though.
Mr Moley said:
Yes, commercial property will, and already has taken a hit.
London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
Out of interest, do you know why the BoE did a risk analysis on a drop of 30% for commercial but 35% for residential. I guess the question being if commercial is more volatile...sounds likely. Then why did they add another 5% for residential as part of their stress tests.London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
V6Alfisti said:
Mr Moley said:
Yes, commercial property will, and already has taken a hit.
London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
Out of interest, do you know why the BoE did a risk analysis on a drop of 30% for commercial but 35% for residential. I guess the question being if commercial is more volatile...sounds likely. Then why did they add another 5% for residential as part of their stress tests.London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
Open House is how they do it here in Norway. Makes a lot of sense in many ways. Means you don't have to keep cleaning the place for people visiting at different times. All the buyers come at the same time and can look around the place for an hour, then if you're interested sign a bid form. This can be the equivalent of £1 if you want. The bidding ends at 12 the next day normally, and once the initial bid is in (the reason you would put the small bid in) then you can bid by phone or text messages. Means you can sell quickly, and there's not loads of time for anyone to get cold feet, become a time waster, etc.
Mr Moley said:
Blue62 said:
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
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