House pricing rant

[Mt563]

Why does house pricing seem so random sometimes? I'm guessing sellers?

I'm getting a little frustrated with houses on the market overvalued but clearly seller is happy to wait ad infinitum for the price they have in mind. Like, over a year on market, clearly overpriced, but no price drop and not open to offers.

I'm looking at 2 houses, next to each other on the same road.
One fully renovated, new everything, modernised layout, about 15% smaller, on at 425. But went on last spring so likely overpriced and/or not accepting offers.
Second one, needs all new windows, boiler, kitchen, bathrooms etc. Layout would benefit from modernisation. On at 'offers in the region of' 500. Given how much work it needs (plus the optional stuff) this price seems well over to me.

Rant over.

having sold last year, i have noticed ridiculous pricing too. But all the agents i consulted gave me a sensible price for my house which wasn’t over inflated

So are you suggesting that the buyer sets the price, not the seller?
That would work if there was an infinite supply of the product for whether there is a limited supply of the product it’s the complete opposite
So either we need to build more houses to dilute the value of the existing stock.
Or people who want to buy a house will be dictated to by those who want to sell one

That doesn't make sense. Because even if I had say a one-off designer handbag and I decide it's worth £50k. I need someone with that money who also wants to buy it in preference to anything else. Same with houses. Unless someone wants to buy your specific house and has that money, you won't sell it. You might sell it for less, so yes the buyer does set the price, unless there's lots of potential buyers (when the price could go up from asking price.)

You have missed my point.

If I will only part with my home for £10,000,000 and the market will only offer me £300,000 then that doesn't stop its value from being £10,000,000 to me. I don't want to sell it for £300,000 and I won't, and I don't have to. Value only exists when a willing buyer and a willing seller agree on a mutually satisfactory number. It's only been "overvalued" if I actually want to sell and then yes I would have to drop my price until it reaches an amount that someone is willing to pay but if given the choice between £8,000,000 vs keeping the home I love, I choose the house, then it is worth more than £8,000,000. If given the choice between £8,500,000 vs keeping the home I love, I choose the house, then it is worth more than £8,500,000. If given the choice between £9,000,000 vs keeping the home I love, I choose the house, then it is worth more than £9,000,000. It's only when the amount offered breaks my desire to keep my house that we establish its value. The same point that other PP have made in a different way is - not every property on Rightmove is owned by someone who actually wants to sell. The current owner has as much right as any prospective buyer to draw a red line beyond which the price will not shift.

Personally I think Tories have the best chance of winning the next election. It’s not going to be Labour or Greens. It could be Reform but I fucking hope not.

Removal of stamp duty might encourage older people to downsize, which would be a good thing imo. Would also encourage those on the first rung to upsize, making more smaller properties available for FTB. Smaller properties are in the highest demand, which puts upward pressure on prices and makes things harder for FTB.

House prices are bonkers where we live. We think about moving sometimes, to somewhere bigger (to a 5-bed + extra reception room), but most other houses we look at that are either the size we want and/or the price we can afford, are either in awful locations compared to ours, and/ or they're massively overpriced.
The new builds and recent new builds are the worst. So we live in a 4-bed, on a fairly large plot, with big drive, fits about 6 cars, and good-sized garden. The new(-ish) builds are priced 125k higher than ours, and, yes, they have a 5th bedroom shoved into the loft, but the plot as a whole is actually smaller than ours, can barely fit 2 cars, gardens are tiny, no storage space, overlooked by about 6 other houses (we have woodland behind ours). Unfortunately, these are 90% of houses on the market.

I can understand actual new-builds being a bit higher-priced, because of the convenience - no chain etc (although I wouldn't want the snagging issues) but the difference is ridiculous, and then when these people want to sell, they're clearly trying to sell them for a bit more than they originally paid, but the convenience of it being a new-build, off-the-shelf buy has gone, so they are actually worth less.
I think it's the sellers rather than the agents - I think they priced ours fairly, and they all said that their main job these days is managing people's expectations as to the value of their property. They were very relieved when we agreed with their value for our property.

@CoverLikelyZebra that's not really what your house is worth if you needed to sell it, just what it's worth to you in your own mind. Fair enough but if you did want to sell it you couldn't get more than what somebody would want to pay.

If people dropped their asking price they could sell now in most areas?

They will have to do a deal with Reform, Boris only got his massive vote for the stance on Brexit, there are large numbers of voters obviously moving to the less EU/ stronger borders and less immigration stance, the main parties will have to accommodate this or die.

Last time stamp duty was removed, seller just put their asking prices up to £previous price+stamp duty and then rounded up.

So a house they would have sold for £950k went up to £1m, and one previously on at £1.25m went up to £1.35m. It did absolutely nothing to help people buy.

I would really recommend the MHWC podcast, OP. Lots of discussion of this. I think it's a combination of:

• Agents overvaluing in order to get the contract (and not really minding if the house never sells because they also make money on referrals so just want a lot on the books)
• Buyers thinking that house prices only ever go up and that they are going up even now. The truth is that in large parts of the country Prices (actual sold prices, not asking prices) have gone down in real terms, and in some areas they are down in nominal terms as well.

All you can do is offer what you would like to pay and be prepared to walk away. Buyers are free to set whatever price they like, including a higher price than anyone is realistically going to pay if they wish. That may be the value to them, even if it's not the objective market value. It's a waste of everyone's time but not much you can do about it.

Thanks, will give the podcast a listen.
I've enjoyed the discussion.

I'll be stepping away from this particular house. Windows and roof haven't been replaced since 50s-70s. They don't know how old boiler is. And so on. I think it's going to be a money pit for someone if they ever manage to sell. Gorgeous potential but I don't have deep enough pockets!

No, I haven't missed your point. You saying it's worth 10,000,000 is utterly meaningless if no one agrees with you. If you actually intend to sell your house, then you have to establish the value by finding someone else who is prepared to pay it's actual value. Until that point, you're just wasting everyone's time and enjoying pretending the house is worth more than it is. It's like saying my cat is worth 10,000,000 quid. Until someone agrees with me and pays that amount, it's total nonsense. Me saying the cat is worth 10,000,000 doesn't mean the cat is worth 10,000,000. It just means I haven't bothered to market the cat at a plausible value for the cat.

Yeah but that was a very specific set of circumstances. The market was already crazy market due to Covid related pent up demand, and then everyone was desperately trying to move in a short space of time before the stamp duty holiday ended, hence being willing to pay over the odds.

It would be totally different if it was permanently removed and there was no rush. People would be able to move up the ladder, freeing up smaller properties for first time buyers (who usually don’t pay stamp duty anyway).

Just to understand your logic, if you say your house is worth 10,000,000 and then five minutes later, you say it's worth 11,000,000 (and at all times, no one will pay more than 300,000), what do you think the value is?

Just had to say I am only on page two and why are people blaming Labour . We are at the mercy of Trump and market forces. It doesn’t really matter who is in power here we are at the mercy of what else is going on in the world. Same with the global crash.