Asking price are still very high and sellers are still thinking it is 2020

[BroglieBoy]

A 3 bed house was listed in Wokingham for £700K in June this year. It was then reduced to £650K then to £600K and then very recently reduced to £550K.

House is a Probate with 2 individuals.

The house looks fine and needs some modernisation. New carpets, new decoration new kitchen units.

The house next door which is a 4-bed house was sold in June 2023 for £492K.

I would expect the estate agent to be aware of the recent sold prices in the area( in fact recent sold price of the adjacent property ) and market it accordingly.

How come the estate agent thinks they can market a property that is smaller than the adjacent property, but market it for more than the recently sold prices, especially in a falling market?

To the OP. Perhaps the more expensive 3 bed is more superior that the 4 bed next door. Better kitchen, layout, quality of fittings and fixtures. Again, it's all so individual when pricing houses.

But make an offer you can afford. See where it lands.

Making an offer is the life blood of everything in the housing market, whether it is strong or weak.

There is nothing to loose, and everything to gain. Just ask.

Not all estates are subject to inheritance tax, only higher value ones. So an ordinary house in many parts of the country wouldn't be liable.

you should defo make a lower offer. The market has clearly changed! Good luck

Sellers should be running the numbers through a mortgage calculator for their target buyer income, see what the monthly payments look like and price to sell so that the monthly payment is doable for someone buying.

The house next door is 200 sq ft smaller than the one for sale. We’re really unusual in the UK in focusing so much on number of bedrooms rather than the size of properties but agents will often use square feet/metres as part of their pricing calculations, and it’s understandable that they do.

There’s no doubt that some sellers are totally unwilling to take advice and stick to unrealistic asking prices. But having recently sold, I have quite a lot of sympathy for people trying to sell in such a tricky market. Most of us have the experience of competing agents telling us what an eminently desirable house we have and how they have [insert number here] of willing buyers who just missed out on the house of their dreams and will snap up your home. Many of us then feel we’re being sensible by not necessarily picking the highest valuation but going for what seems a moderate price, and hoping for the best. When after all that our house isn’t under offer within days, we have to readjust our thinking and it can be quite hard to bite the bullet and reduce when the ‘experts’ have told us our house is definitely worth more. It’s a big psychological shift and anyone who’s done it has probably worried about then reducing ‘too much’ or missing out on the buyer that was about to come along and offer full original asking price.

Tl:dr it’s all really tricky and agents often really don’t help to drive sensible behaviours.

Yes, I agree - I don't think the OP has been completely accurate with her descriptions of the two houses at all!

Having looked at them both, it's patently obvious why this house was listed for more. The 4-bed one that sold in the summer is 200 sq ft smaller, and is in a bit of a state - the bathroom for example. It's just smaller all over; the kitchen in particular is teeny. The house that the OP is criticising is much nicer all round, considerably larger, and although they might want to redecorate, there's nothing that's absolutely awful.

Just as an example, here are the photos of the two bathrooms - you won't need me to tell you which of these is the 4-bed bathroom which sold for the lower price...... The 3-bed, larger house has a very decent shower bathroom which is waaaaay nicer. I really do think the higher price is warranted.

I also took a quick look at some other local houses which are on for £550-575k and I think this one is a bit of a bargain. I can't say that it's worth £700k as I didn't look that far, but compared to others in the current price bracket I think it's extremely reasonably priced!!

This just feels like a thread to bash sellers, tbh.

You actually ARE going to have to tell me which is which.

You say the cheaper house is more dated and cramped but those photos show one very cramped bathroom and one slightly dated bathroom so no idea which is which... both look perfectly serviceable but honestly I would rather have the larger 'dated' one with a bath.

I can change the bathroom fittings but I can't magic more space.

I live in Wokingham and have been astounded at some of the house prices recently - two within 50 metres of ours; one has been priced to sell and sold within a week; the other is a barn conversion (which is taking FOREVER) and has been priced at almost 900K for a 3 bed terrace (in effect). The "sold" sign has been up and down almost as many times as a yoyo.

Similarly two houses almost next to each other just down the road, same size, no real difference in square footage etc - 150K difference. Unsurprisingly the higher priced one has still not sold.

There are a huge number of developments going up around Wokingham atm, and new build premiums must be sky high.

New Builds are a slippery slope now that HTB is gone, only buy them at really deep discounts IMO.

The house has now been reduced by another 25K to 525K. I believe it is now inching closer to £500K which is what I believe is a reasonable price in the current market.

What link are you looking at?

Clearly other potential buyers agreed with you that the price was too high.
I think either reality will set in eventually or potential sellers will just remove their houses from the market, assuming that they will be able to make more in a few years.

Would you say that most new-builds are bought with mortgages or that cash buyers know they can wait for a bargain?

@CrashyTime there isn't a simple answer to this. In my area, a lot of smaller new builds are bought by landlords. In London/Manchester, I believe that a lot are sold to overseas investors. Other areas and larger new builds may go first or second time buyers.

As I said before, I think that the pyramid only collapses if sellers are forced to sell. A recession and high unemployment could cause a collapse.

When interest rates went up in the 90s, there were a lot of repossessions which shifted the balance between supply and demand. Similarly, interest rates went up in the 50s, but this was at a time of massive house building, which again, helped tip the balance between supply and demand.

At the moment, we are missing that extra factor which increases the supply of housing, so we are seeing a stand-off between buyers and sellers, and a slow gentle decline, rather than a crash. Unless there's a big recession, it's more likely that prices will fall in real terms as wages increases.

If FTB stop injecting cash, it doesn't automatically mean that prices fall, it just means that the market stagnates.

The market can stagnate on sales because as we see from the 30%+ drop in mortgage approvals the demand isnt there like it used to be, IMO the "demand" was for cheap debt not actual housing units, people liked moving a lot and showing off how much they could "pay" (borrow) for property The market cant "stagnate" on price in the same way because the market price is made on the margins, just one house selling for cheaper on a street of similar houses lowers the price for the whole street, people`s house price goes down whether they are part of the market or not.

'As I said before, I think that the pyramid only collapses if sellers are forced to sell. A recession and high unemployment could cause a collapse.'

Indeed and this is exactly what will happen over the next few years as I have been saying for some time!

When mortgage applications are down 30-40% a lot of that "equity" doesnt get released (a house isnt like a bank account, you need a buyer) or there is a lot less equity than previously thought, or even no equity if you are a recent buyer, also inflation is here to stay (did you see the sugar price yesterday?) and mortgage rates are going higher.

Yes, presumably, if you have less equity than you thought, and interest rates are high, then most homeowners would simply stay put. Again, what happens is that the market stagnates and FTB are stuck in rentals

The central banks don`t have "years" to wait for a recession though, they need a recession now before inflation becomes firmly entrenched and a much bigger problem, U.S data today is "hotter than expected" so expect more rate rises IMO.

Anything half decent near me is still going up. The houses are nice so if sellers can't sell they don't seem in a rush. And buyers don't typically need much mortgage to buy, so it's all business as usual.

Totally different story in the first time buyer market though

That will change as base rate approaches 6% IMO, most buyers are using "equity" and in many chains there is a FTB at the bottom with a deposit and mortgage that is required for the chain to complete, it takes time for interest rate changes to feed through to the day to day market.

Yeah 6% would change things for sure. However so would 4%! I think 5% is more likely for the time being.

There are no FTBs anywhere near any of the chains. They might as well live in a different country, sorry to say

"There are no FTBs anywhere near any of the chains. They might as well live in a different country, sorry to say"

Fair enough, some areas are like that.

Inflation seems pretty entrenched already. I expect more rate rises and they could end up a lot higher than people expect. We may see stagflation or a terrible deflationary wave even though inflation in some things isn't back at 2% level. Either way, it isn't looking good.

This is a Barkham Ride isn't it!

I agree, they are already higher than a lot of people expected, plenty of people in the workforce now have never seen 5% base rates, and that includes the types you see on Bloomberg etc. working for the big banks, there is a definite Deer in The Headlights look to some of the younger ones lately, quite funny in a way if it wasnt so serious........

It's a possibility, but hardly a forgone conclusion.

Thousands of people losing homes and houses falling in value is a political nightmare, especially ahead of a general election. I don't think that we will see lots of repossessions as we have done in the past. Where on earth would the government put all these newly homeless families?

I think what is happening at the moment is actually the best possible scenario. A gentle decline in prices and wages catching up, but without recent FTB being left in negative equity.