Why isn't my house selling - is this you?

[EarthSight]

There's yet another one that's trending at the moment - why isn't my house selling.

If you're wondering this, your house isn’t selling because -

a) Your estate agent is not replying to people when they should. No buyer should have to chase & chase just to ask a question or book a viewing.

b) You've entered into one of those 'modern methods of auction' contracts, which puts off a lot of buyers

c) Your house is too expensive for what people are willing to offer in your area's market.

It's usually the last one.

From tracking the market in my own area for a while now, people massively over estimate what their expensive kitchen or decor taste is worth to a buyer, when buyers might want to put their own stamp on somewhere or might want a hard floor instead carpets everywhere. A seller might love grey neutrals & modern style the house, but many buyers might think it looks clinical or prison-like. You might love your large kitchen and island, but a buyer might prefer a larger living room and think the island is a bit awkward where it is. One person's 'low maintenance garden' is another person's drab yard.

It also seems very common for sellers to underestimate how much renovation and fixing things is going to cost their buyer, so instead of reducing it by 30k compared to the general market, they reduce it only by 5k.

Don't just look at how much people are listing their houses for (they could be listed for a long time), and be aware that estate agents might inflate the realistic selling price in order to get your business. Go on GOV.UK and look at how much houses are actually completing for. There is often a few months' lag before sales prices are uploaded onto the site which is not as useful in a fast changing market, but it will give you an idea of longer term trends.

I've no skin in the game as I'm neirher buying nor selling. But I'm my area, those that sell within a fortnight are either VERY realistically priced, or top of the range, most expensive on the road type houses. Those in-between are sticking.

Eg a doer upper along the road from me went on at about 200k less then one that has been extensively done up in the last 5 years. It sold almost immediately. The latter one has stuck.

You also need to know the market in your area and who you are selling to. I live in a leafy suburb full of middle class families who came here for the excellent schools. Most houses in my street are well over £1m.

Mine, bought at the start of 2020, was less than half that. It is converted retail space, no proper garden, overlooking a roundabout, no right angles anywhere, the steepest stairs I have ever seen. I have redecorated throughout, put in new windows, new boiler and wooden flooring, improved the bathroom, dealt with the damp. It's now a charming (if quirky) home in a great location, but bottom line is that its still not suitable for families with young children. It will have to be very reasonably priced when I come to sell to have a hope of shifting.

IME many sellers lose sight of their market. My home might sell well to young professionals, but they are not the people who want to live round here.

There are definitely some buyers who feel that they can't afford to lower beyond a certain price. I think there are various sub groups within this group. Some might be held back because those in the tier above haven't reduced enough yet to make their onward move financially viable. Some might not be willing to accept the financial loss now, or decide to rent their home out rather than doing so, but might choose to sell at a loss in the future. Others are 100% tied for the foreseeable future. There's also another group who are in financial difficulty and are able to hold on for now but may be forced to move in the future. I wonder if more people will list their homes for sale if rates go down in the short term, as I expect them to.

"I wonder if more people will list their homes for sale if rates go down in the short term, as I expect them to"

That's an interesting viewpoint that could prove correct. I think on balance though that the cost of mortgage rates is probably now as low as it can get for the short term. I see it as more probable that borrowing rates may actually start to tick back up. In the past when the market has slumped banks became more risk averse and weighed rates accordingly.
More importantly is the upcoming budget though - and I dont just mean potential changes that affect the housing market. Global markets are making it very clear that the UK is on risk notice. If the current government doesn't present either very significant ways to increase tax income, or reduce spending massively, our borrowing costs as a nation are sure to spike again. That will be borrowing costs for everything - and most importantly increases in cost to service the huge debts we already have as a nation. This will fuel a new round of unpleasant cost of living inflation, with home prices one of the asset classes set to deflate as a result. What worries me is that this government has already tried to push through some of these cost cutting policies and has been forced to U turn. They appear to have not enough cohesion to actually implement which is pretty concerning.

The prediction on rates is to go up, isn't it? The drop already just about went though last time. Expectations are that it will now be either same or up for a bit from what I read.

I find it bizarre how property threads always attract people who are desperate for the housing market to crash and there is an almost constant barrage of negative posts. I remember selling house at the start of COVID and people on his forum were certain that a massive crash was imminent and sellers had to accept virtually any offer to avoid this. We know this was completely incorrect now but it all seemed very convincing at the time. The truth is nobody really knows what will happen in the future.

As for why houses aren't selling now. Well often it can be the three things listed by OP but there is also something around seller expectations and how long they are willing to wait. There are less buyers around so even if you have priced your house competitively then you may have to wait longer for your perfect buyer to come along. Obviously if you're desperate to move quickly then you can't afford to wait so will have to try and attract more potential buyers by cutting the price but this isn't always the right thing to do. The narrative around price seems pretty black and white on MN in that the house is only worth what a buyer is willing to pay. The reality is much more grey.

Using examples of selling other commodities and this is more obvious. So for example, someone wants to sell a dress on eBay. It's an occasion dress so something that is a bit niche but you can see that people buy this dress on average around every 3 months and they will pay around £100 for it. If you want to sell within a week then you are going to have to cut the price significantly. If you want to sell in a month then a price cut is probably still needed. If you're happy to wait then there is less need to cut the price.

I know this isn't a perfect analogy because the market could be dropping as you wait so you could be losing more money by waiting etc but still, if your house is a bit niche which many houses are, sometimes you just have to wait longer to achieve a sensible price. Price and time period available to sell are not completely unrelated.

Anything will sell for the right price.

Of course. If I wanted to sell a diamond necklace down the pub tonight then I could get rid of it and get a few quid. This isn't necessarily the approach you should take with your most valuable asset though. It is more complex than that.

I know someone who sold a house in 2 days very recently so people are buying the right house at the right price still.

I don’t understand why everyone decided your home should be a cash cow. We’ve spent a reasonable amount of money on our home so it’s nicer for us to live in but if we went to sell, it’s not on the buyer to refund us the cost of our kitchen renovation. We bought a weird layout house which we had to see past as it was a good price but it’s taken years to get the funds together to make it less weird and it still is probably not ideal.

Definitely agree with A.

We were trying to view a house, estate agent was doing viewings but basically told me that they refuse to show in the evening or at weekends. They were so rude. I did contemplate dropping a note through the door to let the seller know.

Yes, of course you are right. However in my experience asking too much is the most common reason a house doesn’t sell.

I’m not suggesting you give it away for silly money, just find the right price to sell it for.

Thanks @DrySherry. I share all your concerns and have been saying so on here for a long time. Global markets seem to be slowly waking up to the majority issues in the UK economy. At some point, things could go wrong rapidly. As you say, the government is stuck in a situation where they need to increase taxes, reduce spending or a combination of both because the third option (borrowing) is looking as if it may be rather limited. The WFA fiasco showed both how entitled and complaining the electorate has become but also how so many of those in government failed to grasp the seriousness of the situation. Although, even Nigel Farage and Kemi Badenoch were against cutting this so the complaints were not confined to Labour! Whatever move Labour makes will clearly be met with fierce opposition when such small cuts produced these responses. I've also said on here before that I think a crisis will be the only thing that enables any party to make cuts.
With regard to rates, I suspect we will see a confirmed recession next year, which could temporarily reduce yields as people may think that the risk of inflation has receded. That could lead to a short period of lower rates. I completely agree with you that the medium-longer risks are higher inflation in essentials (with discretionary costs tailing down and businesses closing) and higher rates. I could be totally wrong and we could see just higher inflation overall but it doesn't make much difference in terms of the housing market imo!

The only properties going under offer/sold in the areas l am interested in are the ones that are realistically priced. So not many at all.

There are always different opinions on MN. I don't understand why you view gradual house price falls as all negative though. Over time, it could enable younger people to buy a home and would encourage £££ into the productive economy rather than simply increasing private debt levels. Those are positive things.
I've seen several people make comments like yours that there are less buyers or no buyers as the reason why their home isn't selling. I've never seen anyone who makes these comments try to explain why there are suddenly 'no buyers' when immigration has been at record highs since 2020. A house that is priced competitively attracts competition by definition, just as happened when prices were shooting up during the pandemic.

Your analogies make no sense. No one is trying to sell their house in a pub one evening. They are nearly all advertising on a website, which attracts everyone who is looking to buy, both in the UK, and abroad, not a handful of local people in a pub on one evening. Even auctioned properties are advertised in advance so as to deliberately attract potential buyer and held in auction houses.
Only a small minority of houses are 'niche'. Most are pretty standard and will sell without a long delay if the price is right. Of course, some sellers will be lucky and attract a buyer after, say 6 months without offers, but those will be the minority in a falling, rather than rising market.
I'm not looking to buy or sell so have no skin in the game but do feel how destructive the levels of unaffordability are in the UK and plenty of other countries and how unfair it is that policy has discriminated against the young.

It's always the price. The EA who sold my favourite house for a good price over estimated how much the next house would sell for and I kept questioning him about it. No viewings for weeks. Then another agent gave me a different price which generated viewings but no offers. So I reduced it to near what I paid (I had to move) and it sold in days. Admittedly it might have been under price.

Yeah. My sellers had me in and offer less than 24 hours after it went live. It was priced absolutely spot on.
There were 2 other (same year and style) houses for quite more in that area which just sat there for months. One gave up and tried to rent it out instead after 6 months. The second one hasn't sold either. They did not drop

I could do with more space and have the income to afford it but have decided it’s not worth the effort for what is let’s face it a hugely stressful and risky process. It feels less hassle and safer to stay put even if we are a bit squashed.

I don't find house prices falling to be intrinsically bad or good. There will be winners and losers no matter what happens with house prices. You clearly want house prices to drop! Fair enough but it's important not to let this cloud your judgement about how bad the housing market actually is and it's prospect of recovery. House prices are more affordable now than they were 20 years ago if you look at the salary to house price ratio. This cost of borrowing is higher and is undoubtedly having an impact but the prices themselves aren't unprecedented in real terms.

The reason there are less buyers is obvious. Many of the prospective buyers can't sell their own houses so the whole process is stuck! Most house sales are in a chain. FTBs or people that don't have anything to sell and want to buy are often most likely to be at the bottom of the chain and are more likely to wait to buy as they think prices could drop or Reeves is going to announce something major in the budget that will impact them adversely if they buy now.

Houses are like any other investment. There is always an element of timing involved. You may say my analogies are bad but they're really not. Pricing something to sell quickly in a slow and poor market is a risky strategy. You are basically gambling that the market will get worse and you can capitalise on a quick sale with your onward purchase. If those elements don't happen then you have basically just lost a load of money by selling at a bad time. If you look at those people that sold their houses at the start of COVID at a massive discount because buyers were pulling out left, right and centre then you will understand that unless that unless they got an equivalent discount on what they bought that this would now represent a sizeable loss.

People saying 'anything sells at the right price' is lazy and misleading. There isn't one single correct price for anything, especially with something like a house where there will be a large element of subjectivity and preference associated with value and this fluctuates massively over time and depending on the buyers that happen to be in the market at any given time.

Were you in a position to proceed. Some owners will not do viewings unless the viewers have an MIP or proof of cash purchase.

Yes, I was. Had AIP, deposit, and all that. Very fexible in terms of moving dates too. Essentially, patting my own shoulder, perfect buyer. I did think there was another reason but seeing house sitting there told me it wasn't that and it was simply idiotic agent

Yes, as I said, I think it is preferable for house prices to fall gradually so that they become affordable again relative to incomes. I don't think it's negative when people express the view that they think house prices may fall further. They are expressing their opinion. Others frequently disagree on here and think that prices will rise. As you say, there are always winners and losers. I'm not sure if you meant to write that house prices are far more affordable relative to income now compared to 20 years ago. Even though you have chosen a date just before the pre GFC peak, the opposite is true so perhaps you just made a mistake. All the statistics confirm this. If you look at 25 or 15 years ago, the difference are huge, especially the former. The cost of borrowing is not higher than 20 years ago, a little lower if anything. The problem is the prices!

'Many of the prospective buyers can't sell their own houses so the whole process is stuck!' This may be the case, but why do you think this is? You have just repeated what you said initially. For some, it may be because FTB think that prices may fall or because they are anxious about the budget. The main reason though is because house prices to incomes are simply unaffordable, despite the government having loosened the lending regulations even more to encourage FTB to take on ever increasing levels of debt (very wrong imo).

Wrt your third paragraph, the opposite is true. If you price keenly, you are likely to attract a lot of interest and competition which can push the price up. By doing what you suggest and pricing above what the market will pay, you gamble that the market will get better and lose a lot more if that doesn't happen. That strategy has often worked well in the past but not so much more recently. I agree that there is a small element of luck involved in selling a house but it is still true that a house will sell within the first 3 months or so if correctly priced. This might exclude a genuinely niche house which only a tiny number of buyers who could afford it such as one being marketed for 25 million in Chelsea but not so for the huge majority of the market so for most of those sellers asking why their house hasn't sold, it is the price.

That is crazy @CoffeeCupOnBreak. Some agents seem to want to go out of business!

No, I haven't made a mistake. This article explains how affordability has changed over the past 20 years. www.thisismoney.co.uk/money/mortgageshome/article-14896623/House-prices-affordable-20-years-ago-9-times-salary-areas.html?ito=native_share_article-nativemenubutton

This is a crucial point as it slightly blows a hole in your argument about why FTBs aren't buying now when they were 20 years ago. It is also explains why the market isn't doomed and sellers don't necessarily need to contemplate a fire sale to sell in this current market. Obviously prices can go down as well as up. It's the gamble you take but your narrative that they must come down simply isn't true.

It’s pretty stagnant where we are mainly I think because no one can really afford to buy the house they want, so they ask more than their house is worth and so on so forth! Basically everything is overpriced. We were thinking of moving but we would then be in the same situation. So we are staying and improving instead of moving - as they say! And yes improvements are costing a hell of a lot more than they did pre pandemic, but it’s still better value than moving for us. We are looking at investing about £50k in our house, but will stay at least another 8 years.

Also just to add to my post. The article also runs through areas that may be unaffordable and factors that exist now that didn't exist in 2005. My point is though that the earning: house price ratio hasn't got worse since 2005 and house prices have risen since then significantly