To think a house price crash is definitely happening

[JudesBiggestFan]

I'm seeing house prices drop down and down before my eyes.
We
sold our house at 30,000 less than asking a couple of months ago but the chain has now fallen through. Three months ago our buyers sold, it fell through, they relisted two weeks ago at 20 grand less - so 275000 instead of 295000 and one viewing, no offers so far.
So we're all on hold, but I know they now won't sell at that price as first time buyers in this area just can't afford that. Every day I am seeing houses on Right Move that are hanging around for months or being reduced again and again.
I feel like the market hasn't caught up with interest rates...people just don't have the cash needed for current house prices and high interest rates on top but sellers are reluctant to reduce. Feel really stuck - we need to move for work reasons but the market is the slowest and worst I've known. Is it the same everywhere?

Yep I think so.
Sellers aren't keen to accept that they need to drop prices so they are listing and getting little interest. My mortgage deal was under 3% 2 years ago. Now it would be closer to 5% and I wouldn't be able to afford it. That must be the case for so many people.

not sure about a crash but definitely some falls.

Thing is even if you can afford it it's quite hard to get your head around servicing so much more debt.

Not crashing no, going down slightly but in percentage terms not a huge amount. There’s a lack of property on the market so prices aren’t going to crash.
The only people slashing prices to
sell are the desperate. Everyone else is sitting still. You’d only sell now if you had no choice.

Houses here have dropped about 5% max and most less than that.

Not sure about a crash, but definitely a softening. Building work is so insanely expensive, and with interest rates remaining high, (and likely to be so for some time), sellers are going to have to start being more realistic, as buyers just don't have the lines of cheap credit that have existed up to now. That said, I saw a statistic that said something like a third of purchases are for cash - so there's still clearly money out there!

Yes I think so too. We are prospective buyers. Viewed many houses recently priced at 2020 fever prices. We’re sitting it out. There are some and will be more forced buyers selling at realistic prices soon. Lots of houses come on (Scotland) at offers over. Then they go fixedprice. Sometimes that is lowered. Then they sell. Couple of months later back on market when the original deal falls through. Some really lovely but unrealistically priced houses are stuck.

From a buyers perspective we can afford and seemingly get a mortgage but because of the interest rates the total amount paid versus the total amount borrowed is putting us off!
if you borrow 100k at 6% over 25 years you pay back 193k.
Say you borrow 500k then you are paying back the 500k but also almost the same in interest !

I don’t think they are falling much but if they are it’s great news for everyone except those who have purchased in the past 2-3 years. If you are so desperate to move and don’t believe they will sell at the price they want you’ll either have to offer to reduce what they are paying you so the overall impact on a lower selling price is negated or look for another buyer who may well offer less.

I have noticed in my area very little is coming on the market and a few very big houses have gone up for rent

Mortgage rates are coming down - 4.x was released today.

Not so sure.

I bought this house 6 years ago and also viewed another nearby at the same time. At the time that was going for £275k. It just sold, with no subsequent work to it (still using the same internal pictures as when I viewed it) for £380k.

If it's been up and come down in value inbetween, it hasn't stopped it being a £100k more than it was 6 years back - when my mortgage offer was 1.79%.

They are falling a bit in my area but seemed to be ridiculously inflated before that so maybe just evening out.

There are too many houses where I live in Portsmouth that have been sitting on the market at unrealistic prices for too long - as pp said, some since 2020.

And now we have quite a few BtL landlords divesting some of their portfolios.

Here we have flat-fronted two-up-two-downs (with crap extensions out the back) at asking prices of c. £240k even in the older (1880s) traditional working class areas of the island. How are they going to sell at that price? Two small bedrooms and one bathroom-with-loo tacked onto the galley kitchen are not places that two working adults are going to want to raise families in, on crippling mortgage payments. So those asking prices will have to fall - a lot.

The University expansion has skewed the market massively in this city, but that's a whole other thread (as is leasehold flats), although having said that some BtL landlords are linked to the Chinese and East Asian student market, who tend to want smart private Halls or larger houses.

So yes, I wouldn't be surprised to see a significant market correction around smaller houses. Whether that's a good thing or not for local young singles, couples and families, I can't tell yet.

Are you going to reduce the price for your house OP?

This is the natural way for markets to work. House prices should rise and fall according to what people can afford. They have been artificially inflated by the government for years which was inevitably going to lead to where we are now.

Bloody hope so!

We're in a category of buyers who should in theory benefit from a stall or lowering of prices.

Our local market is boosted by a new trainline and a few other useful "best place to live for xyz" plugs recently. So our house price should hold above the average for a while.

But we're moving to an area that overpeaked during Covid. Sellers there are stalling on prices for a long time.

I think they'll blink before our local market does.

@WallaceinAnderland yes we're happy to reduce, but can only do so if our seller reduces/there are other sellers who reduce. We can't drop and drop if others are just sticking at their price and sitting it out, as we won't be able to get what we need. And the interest rates are frightening. I'm on the brink of giving up and having a bitch of a commute for a few years. But if I'm thinking that, then surely so are loads of others.

No, I don't think it's quite a crash yet. Prices may not be rising/staying static/going down slightly, but that isn't a crash. While it's also horrible for those with big mortgages if prices start to fall, it might potentially allow some people to enter the market who previously couldn't, even with increased interest rates, because prices are not as ridiculously high as they were.

Property goes in cycles, hopefully not a crash. Been through a few of those over the years and it’s awful, if you are at the wrong end of it, as we were in the early 90’s. I wouldn’t wish that stress on anyone.

My friend just sold her house that was only on the market for a week for the asking price. Cash buyers but are in a chain. And it's not cheap for a bungalow so I thought it was as seen other houses on the market for ages but not sure

The market is definitely slower but it’s nowhere near a crash. We’ve just sold ours (subject to contract) for asking price, and have just had an offer accepted on another in the same area, also for asking price, where we were one of three interested parties.

It’s a perennially popular area, leafy suburb, good amenities, bars and restaurants, and four rated outstanding primary schools. There are always people who want to live here.

That said, there’s definitely less interest than when we were buying five years ago - I remember we viewed one house and were one of 40 viewing that day. We looked round with three other parties at the same time. That wasn’t unusual.

The agent told me the main drop off has been in the £500k to £1m bit of the market. Still buoyant under £500k and £1m plus are sold before hitting the market.

Won’t be a crash but maybe a small (relatively speaking) fall

Some of the froth is coming off - the market became over-excited after Covid.

But, a crash? No! The only thing that would cause that would be large numbers of forced sellers. There's no evidence to support that.

What tends to happen in these situations is many people postpone their planned move and sit on their hands. Some parts of the market become moribund. But that sometimes causes a squeeze on supply for good quality properties, so you get different effects depending on the area and property.

It wouldn't hurt to ask everyone in the chain to drop. If people are keen/desperate to sell then it might work for everyone.

It varies

One near me listed on the 13th now shows SSTC on Rightmove and I know that another listed on the 14th has an asking price offer.

A couple have reduced their price today as well.

I know a lot of people who are sold and looking- many in rentals.

My DF looked at one last week in a different part of the country as he says it is now sold- so less than a week. Ex holiday home and so he is confident that there will be more- lives on a national park where tourism seems to have slumped this summer

That's not really a crash.
We went on the market just before the 2008 fall. Our house price went down over 25% in the next year before we sold. That wasn't a crash either, simply a fluctuation.