Are estate agents overvaluing homes in Wales and elsewhere?

[2longinthetooth]

When are estate agents going to get real. Seriously here in Wales their valuations are crazy. Can people be that deluded that they think they will achieve 350k for a semi in the valleys. These are not exceptional properties neither. I mean wth.
Ive been following the market for 1yr and this summer I can count on 1 hand the properties that have actually sold. Surely estate agents have to get a grip at some point because surely they are starting to lose a lot of money. People are not even reducing. Its gone full stalemate. I think they are hoping its their summer slump and September will improve but ive doubts. Properties have been sitting on the market for well over a yr, some are reaching their 2yr mark. Who are these people who sit for that long. Obviously not serious house movers.
How is it in the rest of the country.

An underwhelming 3 bedroom house on my street in Swansea was valued at £210,000. We are on one of the "better" council estates where because of Right to Buy a lot of houses have been bought. Absolutely ridiculous. I keep checking Zoopla to find out what it actually sold for but still nothing.

This over inflating prices has a knock on effect getting a house to complete. Lenders valuations dont match. Buyers are having to pay for this. Then finding out they cant raise the money.

it will take a good 6 months to get the actual sold price. This is what sellers should look at the actual sold prices not what the estate agent values it at.

Remember that agents also make money on referrals to mortgage advisers and conveyancers and they have an opportunity to make a referral every time someone contacts them about a house on their books even if that person goes on to buy a house with another agent. So it's in their interest to get houses on the books even if they can't actually sell them- more houses = more viewers = more referrals.

EA valuations being used to win seller business is a huge flaw in how the housing market works in England and Wales and a major cause of price inflation.

For so long many believed it was just supply & demand but affordability really does matter. Borrowing a lot of money on 0.5% interest rate & having the security that the property will keep going up in value is very different to today’s landscape

Affordable housing is selling in England. We got above asking price for our terraced. We are moving to Wales and probably paying over the odds but if they are holiday let’s there is no rush for them to sell so we did pay what they were asking for it in the end. Even though it had sat on the market for over a year. Having to get a mortgage though.

I think this post shows the situation and the problems in the UK housing market from a few angles.
It is a major problem if young people, traditional FTB can't afford to buy or decide that they won't buy because the one bedroom flats that they can just about afford are simply not good value for their hard earned money. When house prices are so far out of kilter with wages, this is what happens. At some point, prices must fall, as your 'annoying colleague' is discovering. My sympathies are with your DC here!

As @Dorothyperky says, the job market is poor and very likely to worsen. Logically, if less people can afford the houses in higher price brackets, these prices fall, which is exactly what is happening. As I've said on here before, I think prices will fall more, not start to rise in Spring or next year, as people keep hoping. This is happening at the same time in lots of Western countries; Canada and NZ have already seen big falls, the US has in some areas too and is going to fall more, Australia has started to fall this year. China have seen the biggest falls of all.

@rainingsnoringThat’s helpful. I think we’re going to just get ready to move - declutter etc (huge job!) - and sit tight to see how Spring shakes down.

We inherited a house in Cornwall which we have been trying to sell. We actually have a buyer but they can't sell their house.

We were discussing lowering the price the other day, but according to Rightmove it's very competitively priced for the area, and in fact new bill properties are coming on the market at the same price or even higher.

We came to the conclusion that if it was as simple as just prices being too high then people would still be looking at property and offering under the market price. But in our case no one seems to be looking at all, and other people we know in the area who are also trying to sell say the same

I think the government has sown so much uncertainty into the housing market, around the issue of stamp duty/property taxes/land value taxes etc etc, every week they throw another idea into the ring with no real substance behind it, people have no idea what the future holds and unless they have to move are just postponing any decision until things are clearer.

They are right to be wary, there are loads of media articles now about people trapped in leaseholds with big mortgages, just a total mess really. BTL is dangerous if you don"t know what you are doing, the idea that you could "just sell" if things got difficult was always going to be a daft idea, people can"t get the cheap debt anymore for their main home let alone some BTL"s on top, no one wants to be a landlord anymore.

https://londonlovesbusiness.com/uk-gilts-disproportionately-exposed-to-global-bond-sell-off/

Yes, demand is down for a number of reasons, people really can"t get the debt any more though, that is a biggie.

I disagree with posters saying if it’s just the price, then why aren’t there viewings with buyers just offering less.

Surely this is because these overpriced homes are not even appearing in buyers’ budget ranges.

IME buyers tend not to increase their budget ranges just out of curiosity, as seeing the next tier up can be a bit demoralising.

Well yes, people won"t bother looking at wildly overpriced houses, they know the seller is just going to be a nightmare.

Well the market here is topping out at £500k and picking up again at £1m+

Anything in between is sticking. Three bed semis are selling and cute cottages. Reasonably priced bungalows too. Family homes no.
I do think stamp duty stops people moving up. Brits feel wealthy if they have plenty of equity. When they don't kitchens, bathroom companies and car sales suffer.

Yep, just imagine if houses were cheap how much would be spent into the real economy?

We're relocating for retirement to a different county 200 miles away and are about to put our forever home on the market. But 4 bed dream houses are not selling fast locally because you need an income of £150k or a lot of equity before you could realistically buy. There are very few jobs paying that money locally. However, we are quite happy where we are, so it might take time. We don't need to move, we don't have a mortgage, and the house is lovely. We've been happy here for almost 30 years.

And there is the stalemate. I won't move from a lovely house where I know everyone to a new place, unless I really fall in love. But as I age, I really don't want to be driving up and down the M5 so often. I do love where we live now, but I also know I'd like to live closer to friends so it's a two hour drive or a train journey to visit them, rather than five hours flog on the motorway.

I can do compromise, and I know it will be necessary, but I haven't grasped the nettle yet.

But we don't want a cute cottage. I saw a lovely one last week; it was perfect-- except that DH would not have been able to stand up in the original part or upstairs. we also don't want to live on a new build housing estate. There's a very lovely house in the right place I liked, but it's across the road from a 24 hour filling station and linked to a huge HMO, with an asylum centre on the cards within 500 yards. Call me fussy but no way would I spend over £500k with such downsides.

I saw that!.
I like Cowbridge, but it was crazy

This is what we've seen on our trips to Yorkshire. Upto 450 sells, over the million sells, but in the middle quite often sits. I'm just now looking at one I dismissed as out of budget six months ago which has just dropped by 10%, and I'm seeing more of these each week.

Since our current area West of London is holding firm we're likely to sell and then rent in Yorkshire so that we can properly look at many potential properties and get a better feel of what the estate agents and sellers are doing.

@Papyrophile you might want to search for barn conversions. They obviously have higher ceilings and can be one level. Good if you're retiring.

@Dorothyperky sound reasoning but we don't want to live in the country, not even the suburbs. We would like to live within 10 - 15 minutes of the city centre, within walking distance even for geriatrics. I am not going to retire to a house/location that means I can't go anywhere without driving. My Beloved DM made 89.5 months without much ill health because she could walk everywhere except the supermarket. And she bought as much as she could outwith supermarkets.

But 4 bed dream houses are not selling fast locally because you need an income of £150k or a lot of equity before you could realistically buy. There are very few jobs paying that money locally

Thats a big part of the issue I think, so much of the market was driven by equity whereas people who have been on the ladder in the last decade don’t have so much because prices have softened & it takes a good few years to dent the repayments with current interest rates.

I do think the issue behind why so many properties is mainly price. If prices are a lot higher than buyers are prepared or able to pay, most of them won't waste their time viewing. They might also worry about offending the seller with offers of 25 or 30% below the asking price. There are certainly lots of sellers who seem to take offence judging by the comments on some other threads here.

If even a 'competitively priced' house isn't selling, it isn't competitively priced by definition.
If I were trying to sell an inherited property in Cornwall (a low income county), I would lower the price and get it sold personally.

Just to add, I don't think the political uncertainties help but, as I said in an earlier post, housing markets are falling in a lot of countries at present so I very much doubt this is a Labour thing!

So how much would you spend for the right property, and don't you think the sellers might know what they have?