Propery prices falling so why won't sellers budge?

[nkf]

If you want to move, it makes sense to sell. Right. And on paper, it can be a good thing because the gap between house 1 and house 2 might be less if prices are falling. But although people know that, they won't drop their asking price. I know at least two people who are desperate to sell. Need to leave London but they won't drop the prices significantly. What are waiting for?

[LazyLinePainterJane]

I love the idea that people offering low are considered "cheeky chancers". Next door to me sold for £85,000 5 years ago, now would go on the market for about £160,000. Now were someone with that knowledge to come along and offer £130,000 they would be considered cheeky and grasping by those selling, and yet, they have completely forgotten what was going on 5 years ago! Why is is cheeky to offer £30,000 below the "value" but not cheeky to try and get 100% more than you paid for it?

HAHAHAHAHAHAHA!!! It's things like this that make me hope the market goes down even further!

[zippitippitoes]

nothing wrong with being a cheeky chancer tho

buyers are happily projecting forward to thinking well prices will drop further so they are offering what they think the market will drop to

understandably sellers can either accept that guess or reject it

no one actually knows

it is unpredictable

the prediction that the market would fall began in 2001 and it took 6 years of rising prices before it turned

[noddyholder]

you are right zippi but it was the artificially low interest rates being fiddles every time falls looked likely and silly lending that let it continue not because the houses really were worth more.I think the banks etc do know.In order to lend again and maintain their businesses prices need to fall and they are doing their best to orchestrate that by restricting lending causing drops.The banks are in fact lending normally it is just that the abnormal lending practices of the last few years are seen as the norm now.In 2001 people talked but really developers etc knew what was coming.I developed houses 1996 until last summer and only last summer did any agent or IFA say they thought things had turned.It has been egged on by property shows etc and now the price is being paid.I decided to jump ship last summer and my family thought i was mad but thank god i did.I would be really in it now if i hadn't.

[zippitippitoes]

i also think that the vast majority of home owners do see their homes as financial investments

its a myth that it is considered as a home and not at all as an investment

[noddyholder]

I agree but an investment used to mean small gains not enough to live a different lifestyle in terms of cars holidays etc and def not a relacement for a pension or savings

[zippitippitoes]

noddy houses really were worth more post 2000 because that is what people were prepared to pay

as you say market forces

a house is worth what someone pays for it unarguably

[noddyholder]

Yes but if the banks hadn't lent iresponsibly prices couldn't have got out of control.The govt knew that price increaqses create a feel good factor amongst home owners they feel wealthier BUT at some point this has to stop.I don't know what the answer is but I am a erlatively small scale developer tbh but I know a lot of others who operate on a much bigger scale and have luckily advised me well and they are all saying 40% drops and they haven't been wrong so far.It will be better in the end if prices plummet although some will suffer because of this but gambling on your home is very unwise in any market.

[WideWebWitch]

Oh hello, how did I miss this! Savills are predicting 30% drops by end of next year, anyone who gets an offer anywhere near asking should take it imo

[ShePeeTeePee]

Anyone hazard a guess on what will happen with the rental market in the meantime? (If that's not too much of a distraction from the original thread).

[artichokes]

We live in West London and I don't see much evidence of property prices falling for nice family homes. In fact we have been gazumped on three houses this year! I would accept below asking on ours if there was ANY evidence that the sellers of the houses we want would do the same. They won't because they do not need to. I honestly wonder if the media are not hyping this property crash, unless our neighbourhood is unique.

[WideWebWitch]

have skimmed thread now and agree with Noddy (hi!)

We offered asking price less 14% on a house THAT HAD BEEN FLOODED last year and they said no (we were chain free too) but hey, guess what, it's still on the market a YEAR LATER. And almost certainly won't sell imo. I am thanking my lucky stars that he didn't accept tbh.

[WideWebWitch]

I reckon the rental market will stay about the same because:

a) There's a glut of properties around to rent due to people not being able to sell - the lettings section in our local paper has suddenly expanded

b)plenty of people sold to rent and are waiting for what they think is the bottom of the market before they buy

c) it's STILL cheaper in most cases to rent than buy as prices are still artificially v high. For eg a house that's on the market for £250k would cost c£1.3k to buy, but v likely only £800 odd to rent. That's madness.

[expatinscotland]

'noddy houses really were worth more post 2000 because that is what people were prepared to pay

as you say market forces

a house is worth what someone pays for it unarguably'

well, yes, but nowadays more and more are unwilling or unable to pay as much as many sellers would like to see happening.

hence, why homes are shifting very well.

[zippitippitoes]

my logic for waiting is that if i sodl mine now for the predicted where the market will end up amount

then unless i found a house i liked AND where the vendor also was prepared to take that view then i would have to rent and renting would be much more expensive than not selling abd living in my house and waiting till the market had equalised and bottomed out in different areas

rent much higher than mortgage

[zippitippitoes]

i agree expat but noddy said houses had been selling post 2000 for more thasn they were worth

i said no at the time that was their worth

i dont have a house for sale by the way

[WideWebWitch]

Yes if you have lots of equity or bought when prices were lower then it will be cheaper to stay put than to newly rent.

But there are no ftbs according to estate agents.

And I wonder if estate agents are used to houses selling themselves? DH went around those in our small town last week and asked would they please send FIL details of xyx asap as he wants to move and is a CASH BUYER. Not one of them could be arsed, despite having several houses on their books that would suit FIL. In the end I went in to one and asked for details, which I POSTED! And if FIL buys one of them they will get 2% (of £250k+!) for doing sod all.

[ShePeeTeePee]

Between "What colour's my Parachute" and the local jobs classified they probably haven't got time, WWW.

[zippitippitoes]

i think there are a considerable number of scenarios behing each potential hous epurchase and sale

if you are a ftb then you have a quite different view from someone like me who is er well in a rather weird position

[noddyholder]

It is cheaper to rent in most cases.i am in a flat atm which would be about 1400 on a 6% mortgage and i pay 950 a month for it.

[expatinscotland]

and the more the rental market is glutted, the more us private renters are in a position to negotiate the best deal for us.

[noddyholder]

that is right expat soon everyone buyers and renters will be able to put a roof over their heads AND eat and heat it too!Incredible

[zippitippitoes]

but like www says only if you had a mrtgage on the whole amount and a lot of sellers dont have mortgages that large

[zippitippitoes]

i can see all these different points of view they just reflect the diversity oif the housing market

[ShePeeTeePee]

A glutted rental market would be great. I may be able to at last find somewhere without wood-chip wallpaper!

Am finding rentals very expensive around these parts though. Probably because landlords are trying to cover costs on properties they paid too much for. If this is the case, they cannot afford to be beaten down too far on rent. Yet, while people may be persuaded to overstretch for home-ownership, surely no-one is willing to pay more than they can afford for rent. It's all going to get very ugly isn't it?

[Upwind]

zippi - if you have lots of equity, in theory, if you were to sell and rent you would invest that equity and be earning interest on it which might go some way towards paying your rent. So you have to factor that into the calculation too...