Houses wildly overpriced near me and NOTHING is shifting

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My parents are house-hunting at the moment in the area close to me, and it's so frustrating. They've sold, but literally every "downsizable" house in my area is on for genuinely I would reckon about 200,000 more than they're worth. I think 2022 was about the peak in my area, but these prices look as if prices had carried on tracking up for the last four years. We're in an area that boomed during WFH, but is not going to do so well as people are ordered back to the office - which is certainly not reflected in the pricing. Nothing is shifting at all, and it's only going to get worse with Iran. Houses are going off the market and coming back on for sometimes, insanely more. It feels like people got their houses valued in 2022 and are just never going to accept that the market isn't there any more. I'm irrationally annoyed with one local estate agent who tells everyone their house is worth X when it's just clearly not the case. My parents accepted less than they would probably have got in 2022, because they figure that is what their house is worth now - and they can rent for a bit and they'd rather not be in a chain. GRRRRR.

I agree with you. One of the neighbours at our old house sold in 2022. Their next door neighbour, in the exact same house, put theirs on the market in October for the same price. Goodness knows what the agent was advising. It was up for more, as a small three bed, than another neighbour’s much bigger four bed.

If people don’t wake up and start being realistic, their houses will stick.

Santander just hiked mortgage rates again, people who don"t see reality on their asking price will never sell, demand is down there are not enough buyers to go round anyway.

They'll have to shift eventually if you are correct. And your parents will be in a good position to buy as soon as something moves.

There must be something that has sold near you recently? Can you use that as a comparable even if a vague one?

I guess it'll reach the point where people have to sell for less. Shame your parents are losing money on rent though.

The market is tanking where I am in SE London. My house is on the market l, went with the local agent with the best reputation and I went below the valuation they gave, it was way overinflated. Had one viewing in two weeks, one next weekend. Houses I my road normally fly but nope.

I agree with you OP. There’s a semi near me which has 5 beds, nothing amazing two bedrooms are tiny. He has a very, very distance, almost minuscule view of our local river. He has it on for close to a million quid. We are no where near London. It is not worth that. He’s already changed estate agents twice so will be interesting to see what he actually sells it for.

The problem is the whole market though. Unless everyone drops their prices this issue will just continue on

This is what estate agents do. Years ago I was renting in a houseshare and our landlord had a valuation, was told he'd easily get a million. So he put it on the market, we had to move out, it sat empty for a year then he finally sold for £700k.

The 3 Ds (Divorce, Debt or Death) will keep dropping the price till they sell. Everyone else will likely stay put.

It’s not as simple as that and historically house prices haven’t dropped hugely (other than in respect of people who needed to sell) they have just stopped increasing. Sounds like your parents dropped too much so someone got a bargain and now they can’t afford what they want to buy. It’s very area dependent - where I am houses sub £300 are flying out because for those with a mortgage arranged it’s currently cheaper to buy than it has been in a really long time. Availability of borrowing is the biggest issue here and if interest rates go up significantly we will see a return of discount rates I think. Yes people are taking offers but that is always the case other than in a rapidly rising market.

If you don’t need to sell, and most people don’t need to, the whole transaction will need to stack up for you. But it’s the people at the top and bottom of the chain that allow the people who want to sell (rather than need) to do so. If I didn’t need to sell I might well be tempted to wait out my downsizing for a few years and hope the market recovers. I bought at the start of the 2008 collapse and probably paid over the odds then. There wasn’t much for sale as lots of people were waiting to see what happened. I don’t own that house any more but if I did it is worth more than double what I paid for it even today. It would have been a bad move on my part to not buy it because I wanted 30k off at the point (which was almost the route I took) I was buying it - given it subsequently appreciated to nearly £900k that 30k was small change against the growth that came later. That will continue to be the case in my view.

thags Not an accurate view op; I think your parents under sold. The markets have been stable, and increasing in areas but very few have tanked, houses unless there is a crash tend to be very stable.

people can put houses on for whay they wish, they don’t need to sell unless they don’t have to, and as we move into spring things will start to move again.

some houses do linger, but if you look at your area I’d hazard a guess it’s really jot the case nothing has sold for years.

it appears you are annoyed as your parents budget is below the type of house they wish,

Not really, prices are made on the margins, only the houses that actually sell make the "market", one house selling for 50k less on a street of similar houses devalues the whole street (as far as lenders are concerned anyway, no doubt someone will still say their house is worth more because of X Y Z ) The three D"s are traditionally what kept sales moving at market clearing prices, that hasn"t changed.

I'm also in an area that boomed during Covid. Nothing is selling here anymore, because it's overpriced and there are thousands of new builds going up all over the place. Every week the new builds are being reduced and yet they are still building more. It seems to be completely ruining the house buying/selling system.

Just offer what you think it's worth.

Some people bought at the top and need to sell at least at that price or fall into negative equity. If you can't afford a loss of £100k or more you are stuck with your selling price.

Have your parents tried making lower offers?

Sometimes the agents need an actual buyer to say we don’t think it’s worth X we think it’s worth Y. This helps get them and/or the seller out of la la land.

Yep exactly. I imagine OPs parents are in quite a privileged position to take a hit on the value they get for their property. Unfortunately not everyone is in that position. And also if they lower their house to sell to OPs parents, what if they can’t find another property at a reasonable price? The problem just goes on and on. I think we need another stamp duty holiday or something to get houses selling again

I live in Northern Ireland where there was a massive property bubble, house prices doubled between 2004 - 2007 when they peaked. House prices didn’t drop overnight the market just completely stagnated and barely any houses were sold for years, it took at least 5-6 years for the market to fully ‘correct’ at which point houses were selling for about half of 2007 prices.

my version of this is definitely anecdote but just to say house prices don’t fall anywhere near as fast as they rise, and a falling market will be characterised by overvalued houses sitting on the market for months, possibly years.

My parents have sold at what it's worth, and they're fine with the price. Most of the houses they've looked at have been on for a year and not moved. I know a couple of the owners in a roundabout way, and they're grumbling that their lives are on hold. It's absolute madness. My parents aren't worried about renting because the interest will be less than the house price falls are likely to be. Are you seriously trying to suggest that these people who haven't received an offer in over a year are suddenly going to get their 2022-based asking price out of nowhere as the mortgage market tightens? Because that is... an eccentric view. I've looked on houseprices.io and the only sales that have gone through have been significantly below the peak, which tallies with my understanding of the market and not yours.

I love it when people say "only people who need to sell" as if most people move house for the fun and games of it. My parents' house sale is just above where it should be, given what's actually selling according to houseprices.io There are just a lot of people who won't accept that the house market has dropped significantly. One of our neighbours has been convinced by this ludicrous estate agent that she'll get 100,000 (easily) more than its worth. She's a widow and the house is not getting the upkeep it needs. It's genuinely sad.

If you don’t need to sell, and most people don’t need to, the whole transaction will need to stack up for you

This is my neck of the woods in london.
Very few people need to move.

They are thinking about it if the price is right and they wont move on asking price.

Multiple houses we viewed easter 2019 were still on the market for years...one sold in q3 last year... most get asking or very close to it.

Totally agree. Our neighbour put his 3 bed house on for £750k at the end of last year (what a 5 bed on the street had gone for in 2022!) Ended up selling for £570k! He bought it 40 years ago too.

Lots of people are in a position to wait it out though.

The housing market in my area (South West Scotland) is terrible just now because there's hardly anything going up for sale and the ones that are, have so much interest they sell so quickly, go to a closing date and do sell for over the odds. We want to move but there's just so little available and I'm not paying an over inflated price in a bidding war.

Your neighbour I’m sure was guided by an estate agent. People aren’t just deciding prices for themselves

Wait it out for what though, things are only going to get worse so if they think property prices are going to go up, then they are going to be shit out of luck.