Can someone explain the thoughts of current sellers?

[1dilemma]

OK I will try and explain myself, falling house prices, possibly a recession, banks just don't want to lend money, lots of info available pointing out the bubble in the market and how houses 'need' to fall by 30-50% to make them in any way affordable (and predictions of this over the next 3 years at least). Loads of properties here on the market for over 6 months with the odd 10K chipped off the price every few months not a buyer in sight. I could go on but you get the picture.

Lots of threads on here about people wanting to sell but want last Summers price in todays market so decide to stay or rent out their house.

I do not wish to imply criticism of anyone I realise we all make the choices that are right for us and I know nothing about peoples individual circs but I'm not sure what people are expecting.

Are people not really wanting to sell?
Do they believe that all this will be reversed in a few months?
Are estate agents not telling it like it is?
Am I the only one who knocks at least a further 15% off rented because it's been so poorly maintained?
DO people believe renting is trouble free?
Am I completely wrong?

(FWIW I'm in London, should be buying but not remotely interested at these prices/in this market)

[nancy75]

personally i dont think people really belive that prices are going to fall that much, we are potential 1st time buyers in a very good position and have seen a few houses, when we have hinted we might be interested but would offer below asking price we are still experienceing most vendors not being interested (not talking about silly offers either)on the other hand my parents have just sold their house for more the same as it was worth last year, so maybe i am just in an area that has not been that badly affected yet.

[chisigirl]

I think the following is at work at the moment:

1. there are very few 'forced' sellers. Unemployment levels are still very very low. Of course lots of people expect this to change.
   
2. Many/most sellers have an idea of how much their house is worth (ie what is worth summer '07) and don't want to sell for much less than that.
   
   The combined result of these two factors is that instead of dramatic house price falls, we've simply seen a steep decline in the number of transactions.
   
   If redudancies increase significantly (or interest rates go about by a lot), then the situation would change quickly.

[1dilemma]

Thanks agree with you both I suppose.

[LyraSilvertongue]

We're renting ours out and buying another to live in.
We're well aware that prices will probably continue to fall for a couple of years and that both will probably be worth less than they are now in a year's time. But we're looking at the long term. Prices are bound to have gone up again within the next decade. When that happens we'll sell the rental property and pay a huge chunk off the mortgages.

[fiodyl]

Lyra predictions Ive heard are that the market may not pickup again until 2015-17 and could be as much as 18 years before they return to last summer type prices again

[1dilemma]

fiodyl that's bleak even for me but entirely possible where I am it pushed 800k (asking price) for a 3 bed terrace with no garden. I know from various sources that the trad. 1960 ish occupants of these houses were shop assistants and bus conductors. (whose salaries I think we can all agree are somewhat short of being able to afford that!)

[gemmiegoatlegs]

Hi 1 dilemma, we are selling our house, finally, after more than 1 year on the market. We have dropped nearly 40% just to get rid of it. We are going to be moving to rented house in the next couple of weeks. It's not that we imagine renting is gioing to be easy, but this way we will be able to leave with the deposit for our next buy (post crash ) in a couple of years. if we hang on we might lose everything, admittedly the increase in house prices generally has benefitted us, but we have also spent a considerable amount of time and money on this house

[1dilemma]

Hi GGL

thank you all for your nice answers I was worried you were all going to shout at me.

renting is rubbish sometimes as I'm sure you know but at least we don't spend weekends doing anything to the house nor do we spend any money.
Nor does the landlord for that matter (hence my maintenamce comment!)

[gemmiegoatlegs]

i understand 1dilemma, we have looked at so many crappy rentals. now we are paying through the nose for a property that is immaculate, never been rented before

[nancy75]

a 40% drop, my god, i have not seen anything like that kind of reduction in the property we have been looking at - is it just that london is the last place to be really hit?
i think i might keep the money in the bank and stay renting for a while after reading this

[gemmiegoatlegs]

well i am in the N. east, about as far from london as you can get and still be in the same country!

[nancy75]

gemmiegoatlegs, i suppose the best way to look at it is you have your money in the bank now, and in a couple of years time might be able to buy a house twice the size of your current one for less money - if yours has gone down by that i suppose its the same for the whole area?
we are in se london and have made a couple of offers at about 5-10% under the asking price and been told flat no, i am definately going to hang on

[1dilemma]

Nancy I'm wondering whether Londoners are the last to accept reality? EA were saying London will be immune just a couple of months ago now Savills is loosing money, sacking staff and the over 1 million stuff is dropping too.
I've seen a thread on housepricecrash guessing which will be the first Foxtons branch to shut!

[1dilemma]

GGL can I ask was that about 40% of the highest ever price/the most realistic price? has anything else on your street gone for that amount?

[CristinaTheAstonishing]

We are trying to sell and have already dropped 12% off the first asking price after 3 months (SW London). Considering any seller will want to haggle at whatever price, we're allowing for some more, so I think we're being realistic. ATM anything more wouldn't be worth our while as where we want to buy we'd need all the extra money. So it looks like we'll stay put for a few more years. We aren't in a desperate need to sell, the current mortgage is minute, we are ready to take on a big mortgage but not a huge one as we like not having to worry about paying it off.

[CristinaTheAstonishing]

I can believe the 40% drop would be needed but just as price rises haven't been overnight, I don't think people are prepared to have their beloved home see a 40% price reduction overnight.

[noddyholder]

Last summers prices were already way over inflated so 10% off them won't do it.Sellers are still hanging on to last years fantasy and asking prices don't look hugely changed.I would take at least 25% off current to even consider buying.It seems the city are expecting a return to 3x salary mortgages and this could even half prices in some areas. Houses have been a money maker for years but it is over no matter how lovely your house is its irrelevant.30% off by the end of 2010 and a further 10% off the next year with no recovery before 2017.This info was given to me by the person who advised me to sell and rent in April 2007 when he said a big lender was about to collapde(NR)and then we would never get our£ out.I had some effort convincing dp but he is glad now.This friend works in the mortgage market and sold all his buy to lets at the same time.

[lalalonglegs]

There are people who geuinely do need to achieve their asking prices because they kept borrowing against the value of their home and would be in negative equity if they don't (although this isn't the buyers' fault but it will take a lot of persuasion to bring the price down).

Otherwise, I think it is a combination of believing that your home is soooo much nicer than anyone else's (PFB-syndrome transferred onto your property) and having had it rammed in for 10 years that property values never fall.

If they are trying to sell, they probably haven't explored getting a mortgage yet (if they have, then they will want every last pound of equity) and don't know how tough it is. We fixed our BTLs for five years last year and wondered if we were doing the right thing; since then I know people who really can't get a mortgage/remortgage. The world's changed.

[CristinaTheAstonishing]

From today's Times about why some ppl need all that money: "But there are many mothers and fathers whose apparently ample means have been a masquerade made possible by credit cards and serial remortgaging. The price of the average detached house rose 40.8 per cent between 2002 and 2007, which allowed families to use their homes as cash machines to finance [school] fees and other household expenditure. These were the parents who wore Marc Jacobs at sports day this term when Marks & Spencer should have been their outfitter. This summer the credit crunch will cruelly expose those families who have been keeping up appearances on incomes that are not in the hedge fund league."

[1dilemma]

Cristina historically the falls have been 'J' shaped ie lots off at the beginning then a trickle down over the next few years

[theabear]

We are desperately trying the sell our character cottage as we are trying to relocate to another part of the country to be closer to family etc. Our cottage has been on the market since February and we have had no viewings despite a signifcant cut in the asking price. Our cottage is immaculate and needs no work or rennovation so that is not the reason why!! Our estate agent has advised us against any further drop in price but we desperately need to sell and are prepared to take any offer we can at present (luckily we do not have a high morgage so do not risk negative equity) - our estate agent does not appear to be passing this on to potential buyers as obviously they want to get as high as fee as possible. So for all potential buyers out there who are looking to escape renting - there are sellers out there who NEED to sell as opposed to want to sell so you may get a bargain. And don't beleive everything the estate agents tell you, find out for yourself!!

[CristinaTheAstonishing]

Historically, when, though? There must have been house price falls previously but were they for similar reasons as now? Do the wider economical reasons matter?

[noddyholder]

historically meaning in previous crashes after the first huge fall prices do keep trickling downwards for years until they finda bottom.I think this time it will be faster.There are 5x as many houses on the market atm as there were last july but only half as many sales.There are so many factors to facillitate a huge crash it is not any one thing

[twinsetandpearls]

We only tried to sell in this was because i did not have fantastic job security and there is very little job security in teaching locally. I am also sick of living in a town i hate we dropped ours to the asking price for our house six years ago and about twenty to thirty per cent below the other houses on the street. To me being happy is worth more than money. We are moving to a more expensive area so if our house price drops by another twenty per cent and they do the same down here we will do ok.

[twinsetandpearls]

We have now given up trying to sell and my sister is renting my house and we are renting down here.