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?

Also in London where there is a fairytale feeling about house prices at the moment.
I'm seeing top end houses on sale for 6-18 months with no sale agreed because the vendor has a price in his/her head they want to achieve. Equally some properties bounce in and out of the market while not being rented.

Right now we are all suspended in this weird time but once the reality of 6 million people on furlough hits the economy, I expect those sellers that need to sell will sell at a lower price as will those who are downsizing/exiting.

Also have we forgotten Brexit? It actually still hasn't happened!

I'm short I'm a bear in today's market at least at the top end. I would only buy at a well discounted price.

Make an offer. I'd generally offer 5% below asking depending on the local market conditions. Good properties will sell quicker and well. The properties I've seen drop would have dropped anyway because they don't compare well to others.

I think there is likely pent up demand but also the dust is a long way from settling. I've noticed that some properties have been around for a yr & some of the newer ones to list are priced more competitively.
If you filter on zoopla by most reduced it's not unusual to find properties already reduced by 10-20% before Covid.

@Bouledeneige Curious to know which part of London? It is promising, however, isn't an EA's job, in this somewhat difficult market for EAs, to talk up property?

I have put in a revised offer for a property we offered on in March. Vendor has declined and relisted 50k (10%) over February price. Good luck to him. I'm a cash buyer and in no rush so watching the market closely

It’s too soon to say, there is a lot play out yet. Tbh if I wanted to sell, I would get it on the market asap at the price point it was before the shit hit the fan and hope for a buyer that needs/wants to get on with moving and hasn’t been affected financially.

I’m no expert, but in the short term I wouldn’t expect a crash. Sadly, the demographic most badly affected are low earners who aren’t ever driving the housing market. Mortgage holidays will have helped and I can’t see a lot repossessions flooding the market for now. In 12-18 months the situation might be different, but I suspect trying to predict into the future right now is likely a futile exercise.

London properties is completely different game.
buying/selling frenzy after lockdown that''s what keeping the price up.
been outbid by higher buyer isn't pleasant.

It will be interesting to see if more working from home will have an impact.

Does your analysis of underlying economic factors such as employment figures, interest rate projections, new-build supply, post-Brexit predictions support a drop in house prices? Or is it wishful thinking that any market disruption inevitably means lower prices for buyers?

It’s too early for the economic impact of covid to be felt. They’d be wise to reduce in a sell quick attempt though.

@Bouledeneige
‘An estate agent I can trust’
I’ve got some rocking horse manure for you to buy, top quality stuff!

Lots of impatient posters on here. The reason why properties are still being listed at pre-COVID prices is because the deluded sellers still refuse to believe that their most prized asset could ever drop in value. They have to learn the hard way. Give it until the end of the year, you’ll see a different picture then.

Estate agents groom these fantasies, because they want the commission (they’ll be pressuring you to drop the price in six months time too).

Not anyone’s fault however, people have been bombarded in the media that property is one way game, ’bricks and mortar can only go up innit?’. Ask some areas up north that question that never recovered after 2008 and have actually lost value when inflation is taken into account.

Successive governments has a lot to answer for, from Maggie Thatcher selling off the council housing to where we stand with 2.5million BTL landlords in the country today.

Can’t particularly even blame them either as most were just seeking a return in the face of pathetically low interest rates that were needed to keep the ball rolling from bailing out the bankers from 2008.

The chickens have now come home to roost however. I just hope we can provide enough social housing for all that need it in the face of mass unemployment in the deepest recession that most have never seen in their lifetimes.

A friend of mine had someone pull out of sale completely during covid, and they’ve now reappeared and want to buy again. Friend said flat no to reduction and it’s proceeding at same price. There just isn’t much to buy out there.

I don't think people will drop their price based on pure speculation about how the market will go -and certainly not on advice from the give your house away anyway/abolish private property types-until they see how the market is actually going.

@romatheroamer
If you are selling a house for more than you bought it (inflation adjusted) it’s not giving it away is it?

What has happened with house prices through every recession? The BoE doesn’t throw around 16% price drop predictions for the fun of it, the same as the government doesn’t warn that we are entering the ’deepest recession this country has faced’ lightly.

Houses ceased becoming a home and have been viewed as an asset since going beyond x4 salaries. I’m all for private ownership, it’s the greed of the last decade that has put things out of sync.

I expect anything in greater london with garden of pleasant outside space will stay very popular/expensive.

I'm not convinced that only low earners will be affected by this. At least half of my peers (majority of which are high earners) are furloughed or have no money coming in atm. Many of them are company directors of small businesses which have seen revenues go to zero. There are plenty of high earners who simply can't get a mortgage right now which has to have an effect somewhere.

Round here demand seems to be growing not dropping. Perhaps people are even more keen to get the stability of ownership rather than rental? I don't know, if prices do drop I don't think it will be by a great deal or for very long. Houses with home offices might prove extra popular.

I just looked on zoopla for a valuation on my house and it only reckons the price may have dropped by 1.6% in last 3 months. I think anyone hoping for a price change will be disappointed.

The scale of unemployment/redundancies is looking quite scary so I'm not sure how the gov will prop up prices this time.

Even without covid I don't think my bog standard terrace will be worth 1.5m in 3 yrs (up from 1.1m). Who can afford to buy it?

As the OP posted - are sellers in cuckoo land?

Yes, totally. We are on the edge of a depression which is likely to be seen as historic in its scope and consequences. Why do people think property pries are immune from the consequences of this?

Things seem to be selling round me. A lot has gone on the market.
However, I would be worried selling that come 5 minutes before exchange the buyer goes “ooh covid, I want 20% off”

To an extent, the estate agents are the ones controlling the listing prices at this stage. They'll be advising the seller to keep it in on at that price until the market sees a change. EAs aren't going to be the ones to drive a drop in the market; the changes to listing prices will come eventually - driven by lower offers being made and accepted (unless a seller is desperate to sell, they may well drop the asking price now).
So while the asking price may be the same, the likelihood of the seller accepting a lower offer has probably increased.

If I was selling I wouldn't drop the price yet either. It can go both ways, recession can make the price lower, yes, but, and a BIG but is that if the interest starts to rise, the mortgages will be more expensive and some buyers might desperately want to get on the housing ladder with a cheaper interest. IIRC the median interest in the past 70 years was around 7%. It might be preferable to some buyers to buy now at a cheaper interest and put the interest price on hold (don't know the english term here) for as long as possible.

Some sellers will sell, we've been here yrs & have about 600k equity so can "afford" to sell for a lower price if what we are buying has reduced by a similar percentage plus less stamp duty.

Same for my parents who are looking to downsize next year. Why would they hold out for a bounce back when they are in their 70s & have lives to live?

@Raindancer Zoopla goes on sold prices and the last 6 months are largely outside of the Covid period.

That's really not a good metric to go by.

And, Zoopla for obvious reasons may not be the go to authority on the impact our wider economic situation will have on house prices.

Much like estate agents