Properties relisted at pre-COVID prices - are sellers in cuckoo land?

[househunter2020]

Started property search in February (London) and saw various properties quickly sold, obviously riding on post election bounce. We did not put in offer for any. Now we are seeing from this week properties that were sold get relisted at previous asking price (Jan/ Feb time). Are sellers in cuckoo land?

Just spoke to one agent about one relisting and asked if seller is reducing the price and was told oh that one was priced very well already and sold straight away last time it was listed, only now the buyer pulled out due to work problems... Of course it was February or a century ago...

I would expect about 5% reduction from previous listing. What do you think?

I knew someone would say they were overvalued, regardless they are still reduced

So if you live in a road of 3 bed semis and they usually go for around £250,000 and then your neighbour puts there house up for £500,000 then finding they can’t sell it reduce it and reduce it until they get £250,000 for it does that mean the property market has gone down 50% or the neighbour was being greedy.

I saw something like this a few years ago in the Evening Standard. An article about the falling house prices and how much people were knocking off their asking price. It featured a sad faced couple who had reduced their property by £1million
From £2.2million to £1.2million and it still wouldn’t go.

I knew the road. The houses went for maximum of £750,000

@oliversmumsarmy- presumably you are all SE but not eligible for the SE grant except for your daughter if you are all claiming UC? Or perhaps you were inelgible for furlough. Either way, it would seem that there is sadly no work in your sector at present.
I agree with the other poster who said that if their whole household was in this position, they would be petrified. I certainly wouldn't be looking to purchase a property or I would be put off any property purchase that I had been considering.

A significant percentage of those who are currently furloughed are likely to be made redundant later in the year when the furlough scheme ends. Some have been made redundant already.

Taking all of this into account, buyers will tend to have significantly less money and also be much more cautious about taking out large loans in order to buy houses.

@Oliversmumsarmy but who decides what the right price is? Prices fluctuate.

If in 2019 3 houses in a road sell for 500k each. In 2020 someone sells for 450k does that mean that all houses should now be 450k on that road?

that's my experience @fizzydrinks123

@serenada
*www.zoopla.co.uk/for-sale/details/51593087?search_identifier=66eee8fd8bd46345bf6e678d4931436c

1999 = £45,000

2019 = £425,000

Phenomenal. Imagine making that much profit on a one bed flat in Peckham*

It's listed at at 310k...?

Depends on the state of the property. If all exactly the same then £500k or maybe a little less. Depends what the next house goes for.

What if the £450k house had been put up for £900,000 to begin with.

@Smallgoon

So it is, you're right. I don't know how I made that mistake. Still a nice profit if it sells at £310,000.

@serenada So it is, you're right. I don't know how I made that mistake. Still a nice profit if it sells at £310,000.

Hmmm, I don't think it's anything out of the ordinary for London, and it's all relative in any case. You can't get many flats in Peckham today for £310k.

@bubblev I'd have to say I'm with @Oliversmumsarmy - I feel that particularly in London, 'asking price' has often been inflated by 10-15%, sometimes even as much as 20-25%. I certainly found this when I was in the market. Essentially, a property is worth what somebody is willing to pay for it, and I would rely on recent sold prices in the area to determine this. Some sellers are a little too optimistic/greedy and inevitably the price has to be lowered in order to sell, but it was never a realistic price in the first place. Price reductions in London are quite skewed imo as a result of this.

Just to be clear, that was a genuine mistake on my part - I'm not trying to prove something by misrepresenting the price.

Other than my incompetence at reading, that is.

@serenada Also, you think that's a tidy profit?

Try this one for size; purchasing a 2 bed council flat in London, in 1997, for £17k and then selling 5 years later for £250k...

Now that's profit.

www.you.co.uk/patricia-bright/

@serenada Just to be clear, that was a genuine mistake on my part - I'm not trying to prove something by misrepresenting the price.

Don't worry, I got that it was an error rather that anything more sinister!

Oh, that is some return in 5 years. They must have renovated the estate or area.

I feel such a fool. I grew up in London and like most people was acutely aware of the housing markets ups and downs and the need to get on quickly. I graduated in 1995 and tried to clear my student loans/debts as quick as possible but got ill in 1997 and missed all the chances to get a decent job and get on the housing ladder. I was fixated on getting the right job first, rather than doing it bit by bit. By 2003, I was disillusioned and went abroad and hit the crisis in 2008, came back here in 2014 and have been renting since.

I could weep at those prices in 1997. Weep.

@serenada you and me both!

@Smallgoon I'm not denying that sellers have unrealistic expectations but plenty of overpriced property does sell, doesn't it?
Going by @oliversmumarmy logic anything reduced is because it was over valued so what then counts as a reduction? My point was simply that lots of property has been reduced in April & May.

It takes a fair while for sold data to come through so that doesn't always give you an up to date read.

Properties are worth what someone will pay. The buyer is one of many with "work problems" and may not be successful this time. Like you I would have suspected a dip in the market and I'm still waiting for it. We won't be alone. Not saying the property won't get snapped up, but I wouldn't be surprised if it isn't either.

@serenada I always say if I'd sacked off uni & just got on the ladder at 18 I would be millionaire.

One of my parents neighbours paid 1m for a house in the early 00s & sold it in 2017 for 2.8m, ridiculous.

@bubblev

I think the frustrating thing is that the view of a lot of people I knew was that you just do a job and get on the housing ladder as soon as possible and hold on tight, but use the job to get on. This usually leaves people stuck in jobs they don't like/can't leave but at least they have a house/flat. I tried to do it the other way - university - get a good career I enjoyed, and then buy once on a secure wage. That plan, I discovered, only really works when you are on a very high wage in London, not a teacher's salary on your own esp once it started to ratchet up.

@Smallgoon I'm not denying that sellers have unrealistic expectations but plenty of overpriced property does sell, doesn't it?
Going by @oliversmumarmy logic anything reduced is because it was over valued so what then counts as a reduction? My point was simply that lots of property has been reduced in April & May.

Overpriced properties in 'in demand'/good catchment areas will sell regardless. Not all property in London fits that criteria. As I said (and I can only speak for my self), I was in the market for a 1 bed flat - and I know there are a lot of these in London, and I know London is expensive. However, of the properties I viewed/saved in my 'watch list', at least 80% were significantly overpriced, and I wasn't surprised to see that many stayed on the market until the price was lowered. The flat I purchased, for example, was listed at 35k more than what I paid for it. Would I have offered asking? Absolutely not, because it wasn't worth the asking price. I'm fairly certain the seller knew this also.

I'm not surprised prices have dropped in April/May. In this current market, I certainly wouldn't be trying to sell a property at an inflated price, unless you're happy for the property to stay on the market for a while. Sellers are perhaps aware that there may be an impending recession. If I were in their shoes, I'd be trying to sell now before September/October hits, by which point I believe we'll see the effects of covid.

Going by @oliversmumarmy logic anything reduced is because it was over valued so what then counts as a reduction

Things are over priced when they aren’t in line to a certain extent with what similar houses in the same road have sold for.

The list of properties that showed huge reductions earlier in the thread (I could only get onto 2 places)

One was a flat in Croydon that was up for £250k when the top price paid previously was £200,000 for a 2 bed flat as opposed to this place which was a 1 bed place
Maybe if they had put on a price tag of £170,000 in the first place they might have generated some realistic influence
£50,000 more for one less bedroom was never going to add up.

The other was a flat in a block that sone of the apartments over look the River
The place was up for sale for about £1,100,000
If you look at what had sold the ones with the view of the River were in excess of £1million. However the ones that didn’t have the view were mid £800,000

This place didn’t have the view so even at £895k it is still about £50k over priced

A proper reduction would be if flats without the view were put up and sold for £795,000 and the ones with views were just under a million

That atm isn’t happening. I am sure it will in the near future but atm the ones I could see are sticking to their full price

FTB here,

We had an offer accepted in january with 10k off asking price on a 1 bed flat that needs a lot of work (we're do-er uppers) in East London (zone 3). And now on the fence if we should go though with it (we've asked the solicitors to "pause" the negotiations for a bit so we could think). My partner has been furlough but he has another job sort of lined up (lower pay but more interesting job),
I'm sole trader and while I had almost no work in May, things seems to be picking up again (but my financial year ends in sept and I've already made almost the same as my last FT salary).
I've saved all the deposit from my own money, no cushion if things fall apart as my family doesn't have much money.

The thing is.. we're scared about negative equity or not being able to afford the mortgage. BUT if we go through with the flat, we'll be paying £400 less per month in the mortgage than we currently pay in rent.

The alternative to not buy is sad (i hate renting) but yes if we hold prices might go down and we might be able to afford something better for the same price?

BTW we want to have a baby so the plan is to do an extension and convert to a 2 bed in the same year we buy (the idea was to take a loan for that, and keep paying mortgage + loan the same amount as we currently pay in rent).

Last week we called the EA and asked if the vendor is willing to renegotiate the price because of corona and the vendor said she wouldn't budge. :|

sorry the EA said the vendor wouldn't budge.

I would say go ahead - assuming you like the flat and it is in a good area. However you need to future proof it so it can be a long term place and rise above any lowering of prices. If you cannot raise funds to extend, will it still be big enough for a growing family? Definitely better to buy not rent. You could also wait a few months and see if prices drop? But that is not a certainty for attractive and reasonably priced properties.

@Molip Can you give an indication on price? I've just purchased a 1 bed flat, not in East London (but I grew up in East London) - mine wasn't a doer upper but the immediate plans were to spend circa £30k renovating. It would be worth understanding whether your offer is a good one, even with the covid crisis, or whether the vendor is taking the piss, given others have successfully managed to renegotiate.

I don't think I'd deal with someone that wouldn't negotiate myself.

Someone with a straight "no" is not at all reasonable in the current climate. Of course, that's their prerogative but I must say I'm sure there would be plenty of others sellers open to negotiate over the short to medium term.