There has been a turnaround in the fortunes of the housing market, Hometrack reports this morning.
It says that sales agreed have risen by 10.6% in June, compared with May. Average prices ticked down by just 0.1%.
However, the number of properties for sale grew by 3.5%, well ahead of demand.
Hometrack says that looking back over the first half of the year, the housing market has held up better than expected, albeit at low transaction levels. Average prices have slipped a total of 1%, it says, and are 3.9% lower than this time a year ago.
However, the market is highly polarised. In London, houses are selling within six weeks, but in Wales they are taking 14 weeks.
Richard Donnell, Hometrack’s head of research, said he expects house prices to fall another 2% this year in the face of subdued demand.
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Comments
Dan, you are quite clearly bothered! Don't rise to it or the wind up will continue.
Agree with PeeBee - that doesn't sound like 'watching' who posted those messages and your accusation was a little hasty.
Peebee "Having been 'cloned' several times, it is from personal experience I speak. EVERYONE knows you wouldn't say what was written about yourself"
8 people fell for it on this mornings thread.
I'm not really bothered, just a great swell of pity for the poor soul who somehow thinks they are being clever. I do hope your right that its not Watching, it would be very tragic for a grown man to behave that way.
If it is not, then Watching sir, I do apologise for implicating you, if it is you, dear God!
So - still at it, are you, "FTB Dan"?
Lame. Nothing more to say, really...
Give it a rest PeeBee!
FTB Dan: For what it's worth, I don't subscribe to your theory that 'Watching' is the perpetrator.
For a start, I don't think it's 'his' writing style; and let's face it - he's had plenty to say in your face so as to speak that he has little go gain by then pretending to be you to score points, does 'he'?
Having been 'cloned' several times, it is from personal experience I speak. EVERYONE knows you wouldn't say what was written about yourself - so in some respects you needn't get wound up about it. Only when 'you' are seen to be slagging off others or someone falsely using your 'name' to make or break a point do you need to get ratty - and simply reporting the post will usually get it removed within hours.
I don't care if Land Registry, Halifax and Nationwide keep showing falls in house prices. Its asking prices that count and they are going up.
Thanks for posting under my name Watching, very big of you.
I am a stupid pip squeek with nothing much to offer this forum. I like to get under peoples skin, stir up trouble and wreck decent threads, I think it is very entertaining. I am good at it, dont you think?
I have no real friends, that is why I go on the internet so much and do my dirty work. No real people will talk to me, I invite them to the pub after work, they say they will meet me for a drink, and when I get there, nobody turns up.
I’m not very good at my job either, I am always on the internet making a nuisance of myself instead of working. It’s ok because my boss is a fool, he has no idea what I am really doing. I intend to keep wrecking your forum until my boss finds out and stops me using the internet. Hope none of you mind.
I can’t wait for the next news story, so I can wreck that too.
Have a nice day.
@rantnrave
"Latest Land Reg Numbers, courtesy of Rantnrave Information Services:
MoM -0.4%
YoY -2.2%
Av UK house price now £161,823"
I wonder what those figures would look like with the separate nation of Londinium stripped out.
Much better I would think. Some parts of 't North have already seen sizeable drops - particularly in the new build 2 bed flat market so beloved of investment gurus like Inside Track (Went broke? Surely NOT!) Good number of repo'd flats in Liverpool, Leeds and Manchester - even as far south as Brum - that sold to mug punters for best part of 200k which now fetch 40k to 50k at auction.
@PbroAgent "I thought you weren't engaging with him any more ;o)"
I guess he got that wrong as well.....
We get married soon
Im not, I engaged with Brian, lol
@Watching
I thought you weren't engaging with him any more ;o)
Bravo Brian, well said.
What is all this @This Bloke, @That bloke rubbish from non EA's. Ah! ..yes, I know.. irrelevant.
What a lot of people trying to be clever. If you want to buy, buy, if not, just shut up and rent. Simples me thinks, bye bye!
They are not 'THE issues, they are YOUR issues.
I checked, no-one I know owes any money to any Chinese or Arabs. I am sorry you do?? Bad investment??
My business is fine, not as many transactions as I would like, but fine nonetheless. I may be smug because I am a good EA and part of that is spotting not so good buyers to advise my clients about.
Your 'Major' purchase is miniscule in respect of global economy, real estate worldwide, or EA business in the UK. You think it is highly important to you, as is reflected in all your posts.
Im bored with you,, back of the rollerdex you go. I wish you well with your 'Major' purchase. Hope you aren't buying a caravan after all this hype, and hope you engage well with the EA you try to buy through.
Good luck anyway.
@Watching: “I will no longer engage with you. Post at your leisure”
I am very glad. You can’t add up or admit when you made a glaring error. You have no appreciation of macro-economic risks, you think the west debt crises and imbalance of capital to china is the same thing as buying a chop suey from your highstreet. You make endless straw man arguments. You are excessively smug and condescending in the way that only someone who has no grasp of the issues can be. And just about every assumption you have made about me personally has been almost 100% wrong. So many heartfelt thanks for not engaging with me further.
The only point your absolutely correct on is it is called Estate Agent today, I came here to glean a better insight into market which I will shortly make a major purchase, and I really must stop getting drawn into these pointless bickering. Sorry again everyone for getting sucked into one.
You are so right FTB, I did do back of fag pack sums, quick and dirty, and in the round. I did not forgrt deposit or fees, it is all part of home ownership. Take a longer fiew of home ownership rather than your ‘quick quid’ syndrome.
I think you are so concerned about £1 notes that you should stop thinking about property altogether. Buying a property is about living somewhere, not making money, you have been sucked in by too many TV shows.
FYI: and as an aside, As an EA, if a terribly irritating and self opinionated individual came into my office spouting such irrelevance, I would look that person up and down, think to myself ‘I won’t be earning a fee from this one’ and politely yet obsternately offer no help whatsoever to that person. I am in business to earn fees, difficult buyers are more trouble than they are worth to bot EA’s and Vendors. Our service is free to buyers, hence we appreciate buyers who work with us, not against us..
Overall I think you are missing the point my a a wide mile. Buying a property is about buying somewhere to live as an alternative to renting, it is not about making money. It became a topic on interest for TV program producers because it was cheap TV, and they sucked people like you in.
How do I know this about you?........ You drink in ‘News’ and believe it applies to you. You say :
“Today the west and especially the UK and her citizens are massively indebted, to basically China and a few other Eastern and Arab countries who have funded our decade debt binge”
Personally, I pay for my petrol at the forecourt, I don’t owe one single Arab any money whatsoever, I doubt you do either. I also pay for my chop suey before I leave the take away and equally owe no Chinese any money whatsoever. Perhaps you do owe Chinese and Arabs money.
If this is the case it is doubtful you will get a mortgage, so you should forget buying a house or flat and get onto websites to help you with your debt.
The news is now delivered ‘magazine’ style for the Sun Reader market, the easily influenced. Listen carefully. News reader says “house prices falling” as a headline, then quietly add “according to Halifax Building Society”. Then you get a bevy of ‘experts’ wheeled in to make comment, everything they say starts with “I think”.. this is not news, it is media opinions, and some poor individuals suck it up and apply it to themselves, adopting opinions of others, not their own.
As for the market, I had a quick squint at the local housing stock on my way into work this morning, guess what? I saw not a single Iron Age Roundhouse or Roman Villa. This must mean markets move in time, if they didn’t I would have seen at least one, surely???
You seem terribly worried that you might win or lose a paupers fortune if you enter the market. I would strongly urge you to try to make or lose £10k to £20k elsewhere other than the house you may live in. Try investing in explosives, I hear it is a booming market,
Please look at the top of the page, It is ESTATE AGENT TODAY, not BUYER TODAY, you are not on my page in many, many respects.
I will no longer engage with you. Post at your leisure.
What's that RnR? The most reliable HP index is still recording YoY falls?
That's some 'turnaround'.
Latest Land Reg Numbers, courtesy of Rantnrave Information Services:
MoM -0.4%
YoY -2.2%
Av UK house price now £161,823
@Paula S
"Why would this recession/economic climate put me out of business? I've been an agent since 1989, I think I know what I'm doing thank you very much."
Because, instead of trying to manage the transition from an absurdly overvalued market to one that has some relationship with affordability - the whole industry seems hell bent on trying to talk prices up - as if reporting that agents had 10% more phone calls last month MEANS ANYTHING.
A lot of you will go out of business because transaction levels will be low for a generation and may not support the traditional high street / high rent / high business rates business model. A move away from this model into something more virtual, will be much better managed and implemented by the corporates who have the IT infrastructure and resources to make this happen.
The housing market in the UK is not "turning around". Heavens folks this is the calm before the storm. The banking regulator is now seriously worried about the quality of Lloyds' loan book given how little equity is in it. And this morning R Banks (who should be ramping the market like the comedy Daily Express) is saying we need to prepare for a SERIOUS wave of repossessions.
they always pump up the headlines just before the land registry publish the latest actule SOLD figures !
Wow, Brit, if you think you have that much foresight, fancy telling us the lotto numbers for this week?
I will (kinda) agree with you with regards to some BTL investors, although many of them are currently providing a home for you and yours as we speak.
The investors I truly TRULY dislike however, are those frm what I term the Channel 4 School Of Estate Agency. You know the ones, knock a few £k's off a place, bit of cheap magnolia (ick) paint and a crappy Ikea kitchen and remarket for £30k more. The ones who are convinced that they know best, even when it is their first one.
@ RnR, true he could get that off his onward purchase, but given his apparently strict guidelines I doubt he would find one in his price range.
RE Country Las "Let's take good old Brit1234 for an example, he's looking for a house. (don't want to use FTB dan as I think he talks sense and is willing to dicuss the argument rather than the person). So, Brit eventually buys a house, lives in it for a few years then the wife tells him she is pregnant. Calls the EAs then ensue, appraisals are given, and damn it that Crash he wanted sooo much has happened, and Casa de Brit is worth £40k less than he paid for it. But he needs to sell, and OF COURSE those poor ftbs are still around, desperately seeking a home. So. In this situation, what wins out? Brit1234's supreme altruism and Messiah-like desire to help his fellow man? Or the shadowy little corner in his soul that doesn't want to 'lose' his money?"
See Country I wouldn't get into that situation. I have enough fore sight to see which way the market is going, to prepare in advance ready to buy and have a property type in mind with room for expansion. A 3 bed terrace, with a large deposit buying just short of the bottom should do me fine with most of the risk mitigated.
I want prices affordable for all future generations who are prudent enough to save a decent deposit like my parents before me.
Yes people are going to suffer in the price crash but I would rather it be one generation now than all future generation being priced out. In addition our present generation is full of greedy buy to let investors who have acquired huge amounts of property in gearing from the bubble. I have no love for them and see why savers should be punished to keep these buy to let parasites above the water with low interest rates.
@Watching “Unless you live with Mummy and Daddy.”
Thank you for another condescending and not terribly bright comment. Also, thank you for putting your argument mathematically so we have a chance to follow your thinking. Unfortunately, adding up sort of swept the feet out from under you.
So first off 10% of £150,000 is £15,000 not £14,000, but hey ho. Using all the figures you gave, i.e. 5% repayment, 2 years, £136,000 mortgage and £14,000 deposit, assuming 10% loss.
After 2 years you would have repaid £5,752 capital and your outstanding loan would be £130,248. You would have paid £13,329 as interest. You then sell at £135,000, so the bank gives you £4,752. BUT during that two years you paid that interest so the cost you are looking for is only £8,577. But you entirely forgot that you spent your £14,000 deposit. So actually you are £22,577 down on the deal, before solicitors fees and estate agent fees which I am pretty confident will take you over the £24,000 you gave as a comparable. Plus you would have been earning interest on that £14,000, let’s say another £850, based on a conservative 3% yield. Although due to all the bailouts if you stock market invested would have been more like 15%.
And all that is based on a fall of only 10% while the Halifax is quoting an awful lot more than that. I can do the figures at the actual 20% if you like.
And here endthuus another lesson....... In adding up.
I agree with everything there CL, although I wished you'd taken it further. If the place has gone down 20% in value, then so have all the others. Brit, in this example, would need to borrow less to move to a bigger place. He can thus pay off his mortgage quicker and have more money to spend elsewhere in the economy. It's win-win.
The only problem here is if Brit ends up in negative equity. Then he is stuck. That's why, as yourself and Pee Bee know, I believe the govt should stop throwing taxpayers money at keeping people in houses they can't afford, let the market correct and then help those affected by n'equity.
Oh Dear!, My last comments...
You cant live in a banana or gold bar, no matter how much you look at the technical and fundamentals of both markets and take a view about which of those two markets you may prefer to invest in.
Oh! A home you want?
Rent? Rents are going UP, UP, UP..
Look at the value of a property, Let's say £150,000 to you my man for a nice little flat. You can rent it for 12 months, That's a cool £1,000 pcm (if not today, it will be soon the way things are going). Or you can buy it.
Lets say 10% down, £14,000 borrow £136,000 at say 5%, repayments monthly £800
£200 PCM less. £2,400 per year less.
OK, gotta sell in 2 years time. Gosh, its worth less than you paid...
How much less? Gosh 10% Oh dear!
So where are you on this deal?
You paid £150,000 2 years ago, now sells for £135,000
Owe the bank £1,000
Paid £19,200 interest to bank. Total Financial cost £20k or so,
Rent £24,000... Doh!
Thats if rents keep going up and prices drop 10%
If you want to buy, you get to chose your location, make improvements if you wish, have pride of ownership...
In other words... Live in it.
Its not an investmet, it's a home. If you stay longer than 2 years you will doubtless be safe from rises and falls in the market. If not, the alternative was renting.
Unless you live with Mummy and Daddy.
RnR, I do think that we have certain things in common with HPCers, breathing oxygen for one!
Seriously though, both parties have expressed a desire to have lower prices, from my side partly to increase transactions on properties still clinging to outdated prices, but also so that some of the people I see who desperately need a home can have one. Case in point, my bro and his fiancée are currently living with their young son in the same two up two down as her parents, where they have been for approaching three years. Would I like to see them own a home of their own? H£ll yes. Do I want them to get a good price so if they decide to beget another sprog they can have more space? Again. H£ll yes. Am I willing to put considerable financial distress on many people and potentially ruin their future? I'll get back to you on that...
Whereas I get the feeling some HPCers ( not all, before the lynch mob descends) want a quick buck at the expense of others, and that I disagree with. A while ago someone made a comment, I cannot even imagine who made it as it was some time ago on a different thread. It was something along the lines of 'why should I pay more, just because they ( the seller) paid too much for it x amount of years ago.' my immediate thought to that was, if the comment-maker was on te other side of the story, they would expect their buyer to pay somewhere close to the asking price, to recoup what they could.
Let's take good old Brit1234 for an example, he's looking for a house. (don't want to use FTB dan as I think he talks sense and is willing to dicuss the argument rather than the person). So, Brit eventually buys a house, lives in it for a few years then the wife tells him she is pregnant. Calls the EAs then ensue, appraisals are given, and damn it that Crash he wanted sooo much has happened, and Casa de Brit is worth £40k less than he paid for it. But he needs to sell, and OF COURSE those poor ftbs are still around, desperately seeking a home. So. In this situation, what wins out? Brit1234's supreme altruism and Messiah-like desire to help his fellow man? Or the shadowy little corner in his soul that doesn't want to 'lose' his money?
RE Paula "1. if by low volumes you mean sales, a good start would be to curtail the bad press the housing market receives day in day out - it's enough to scare off the most hardy buyer."
So you want censorship of economic matters to keep potential buyers in the dark?
I see regularly on the RICs survey, where estate agents comments are constantly blaming the bad press.
However I constantly see vested interest groups throughout the media trying to talk the market up. Air time is rarely given to economists to counter their arguments.
We also hear a constantly distorted view in the press that it is deposits and lack of lending which is the problem when the truth is it is higher prices.
I can't see why anyone in the housing industry is optimistic on housing when even at 0.5% interest rates things are getting worse.
The problem at the moment is estate agents evaluations of asking prices are too high. Before you estate agents blame the seller and say you don't give valuations just watch Homes under the Hammer or come on MSE forums where MSE members are constantly talking about EA valuations they got.
Watching sir, I agree that a market cannot be accurately predicted, but actually taking a view on relative values is something that financiers do every day. I can’t tell you the price of Gold or Bananas in 6 months times. What I CAN do is look at the technical and fundamentals of both markets and take a view about which of those two markets I prefer to invest in. Likewise someone can compare the fundamentals of buying or not buying and that also applies to housing. In each case no one is making a precise prediction, but they are gauging relative strength.
Briefly, fundamentals include ability to yield, ability to service debt and any other factors that determine price. So the current housing market will be judged significantly on deposable incomes.
Technical analysis includes the level of sales, their frequency and their moving averages. I am very grateful to Peebee who in a recent post showed me a way to measure the illiquidity and moving averages of a housing market in a certain area recently.
For me all indicators suggest to delay a purchase, as the technical’s point to a stagnant market which is trending bearish, and the fundamentals in my view are awful.
Now I agree with your view that access to debt (mortgagees) is a significant driver, indeed liquidity flows in my view are the key driver to all asset prices. But I do not think that these will simply be turned back on again, as for a wide range of difficult reasons extending debt is no longer possible on the scale we have had, and as the absence of that illiquidity permeates perceptions, values with have to retreat.
Today the west and especially the UK and her citizens are massively indebted, to basically China and a few other Eastern and Arab countries who have funded our decade debt binge, as indeed so many of the western countries in a similar position. And you have to ask why in the US and about 20 other comparable countries the housing market is off some 50%+ and we are not.
To abuse Churchill’s quote: “Never have so many owed so much to so few”.
@Watching
95% mortgages may help kick start the market but I shall continue to advise my daughter to hold on to her deposit until the bubble bursts.
Thanks CL - always appreciate your thoughts and insights. In this case they suggest that EAs and HPCers should have much in common re a desire for lower prices. That doesn't seem to be the case on many threads though. Why?
I fully take on board the view that EAs cannot be responsible for vendors' delusional asking prices. However, comments on this site suggest there are a good number of EAs who, given a chance to discuss an initial high asking price with a vendor, wouldn't go to the same lengths that you do. I would really appreciate some feedback as to why that is. Is it younger EAs who have only experienced operating in a rising market? Is it EAs who think they themselves will personally benefit from a high price environment (which as has been discussed before is extremely unlikely unless they are downsizing).
As an aside, and to try and reduce the tension developing on this thread, I find it funny that both HPCers are EAs blame the media for what's happening in the housing market! Those who think the media's scaremongering is likely to spook buyers should check out the front page of today's Daily Express...
@ unhappy chappy - thank you.
Paula indeed they are - Have a wonderful evening with your daughter.
Country Lass - I think you did exactly the right thing, hopefully he will lower his price, if not he may chase the market down and regret it!
FtbDan - your words not mine, see what I say about borrowing. That is a major issue in today's market. Lot's of factors are affecting the housing market - I just don't have the time or inclination to list them all.
Unhappy Chappy - where do I start, you know what I can't be bothered.
I'm signing out now to go and collect my daughter from nursery, somethings are more important in life than house prices, interest rates, market conditions and the like.
@Watching - I do not need to buy a property or intend to however I believe we were making the same point from different points of view.... so as you say yourself say people can and do try to predict markets.
You seem to be saying that the only thing preventing higher prices and volumes is Mortagage availabilty....it has a bearing, i agree ,but there are other fundamentals that are causing this stagnantion and i predict that it will continue for at least another couple of years yet....if interest rates rise......well all ill say is good luck!
Rantnrave, personally I don't get upset when people start saying lower prices will sell more houses, that's pretty much basic common sense. Let's face it, if there was a new, pretty Porche for sale for £100 I'd be fighting you with my bare hands for it!
I DO get upset when people start blamings EAs for the fact prices aren't lower. I suggested to someone who has been on the market since the start of the year and was told in no uncertain terms exactly what I could do with my (researched and planned) suggestion, which had various documentation to support it. Said 'gentleman' has now been sent a letter informing him we are removing his property from our books.
As others have said, many independent Agents try to give honest and fair appraisals, and if people don't want to listen, change your tune or talk to the wall.
@Paula
Thank you for that, certainly not looking for a crash and burn, after all when it comes to our expectations of the future one opinion is as good as another. And I know I sometimes get sidetracked, but getting a better understanding of the EA outlook is why I stopped by this site in the first place.
But in summary you feel that the current problems in the housing market are largely that of perception, and more or less confined to this particular market. You don’t really buy into the notion that the problems are fundamental and much wider spread. Have I got your about right?
Paula - I dont think he was telling you to suck eggs and you dont want to get into a battle because you dont want to be proved wrong! but lets leave it there shall we.
You are right he is a potential customer thats why perhaps you should be a little less self righteous, his views are as valid as yours. You may have been in the business for 20 years......many of which were on the upside when being an estate agent was as you call it fun, it may not be so much fun for the next 20 years!
Rant,
'on an anonymous site like this EAs would be keenly sharing ideas about how to talk down those expectations.'
Every single thread with the word 'price' in it gets hijacked these days. Agents don’t seem to get a chance to share views anymore with out it being torn to pieces by HPC.
p.s FTB Dan, You should change you name to just Dan.
The questions get worse...
Unhappy Chappy,
It is a market, that is why it is called the 'property market'
It will rise and fall itself.
If it could be accurately predicted it would no longer be a market.
Ask a friut merchant the price of bananas in 6 months time and you will be laughed out of court. Ask a banker to predict gold prices in 6 months for the same effect.
If we could predict prices with the accuracy you seek we would all be investing? If FTB is that good, he should invest now.
The first bank to offer 95% will sweep the mortgage market clean and start the rise. When will that be and who will do it? Maybe a Russian bank? Maybe Chinese. maybe one of our own. FTB and you can invest there too.
If FTB dont predict that stunning market development and misses it by a month in advance, his idea of buying cheap at the markets lowest point will have gone. That is the point in time you guys should be trying to predict, How would an EA know when that will be?
@Watching
Folly? You previously stated that "EA's are more interested in transactions done" (than price).
I think this was a legitimate question to ask Paula.
And, yes, we're all mortal - however, some of us are also concerned for the next generation and aren't as greedy as other.
@ Unhappy Chappy
I'm not getting in to some online battle for your amusement. Ftb Dan was trying to teach us to suck eggs, so I commented. Most of my clients are non estate agents, therefore your comment is ridiculous.
Paula..... Do all non Estate agents visiting this site irritate you? With your 20 years experience please can you advise me when you think either house prices and/or transactions will be at levels seen in 2006-7. Lets ask the novice Dan the same question and see who gets closest.......come on you must be more in the know than one of those irritating FTBuyers!!!
Oh dear me! the folly of some questions.
Most EA's own property too?
Why would we want prices ti rise, are we not mortal too?
@ Dave S
I don't particulary mind about prices, I do know though that being an agent in a rising market is much more fun than in a falling market. In a rising market your stock is ever changing, your clients are all happy, it's a fun and frantic atmosphere.
So it is for my own selfish reasons, not financial gain.
@Paula S
Why would you like to see prices rise "sooner than later"?
I thought the price didn't matter to EAs?
The silly HPC children used to annoy, now they are just so funny, jealousy is so sad.
@ftbdan
It's hard to know whether you just want to see me crash and burn or you are generally interested in my views as an estate agent.
I'll give you the benefit of the doubt, after all you did ask nicely. So in my humble opinion
1. if by low volumes you mean sales, a good start would be to curtail the bad press the housing market receives day in day out - it's enough to scare off the most hardy buyer.
2. I believe the interest rates may increase a 1/4-1/5 over the next 6-9 months. But I don't think that is the major problem, borrowing is relatively cheap, with the right deposit in hand. Therein lie's one of the problems.
3. Alas I don't have a crystal ball, of course I would like to think it will be sooner rather than later, but either way I'm still very happy being an estate agent and don't think this economic climate is going to stop me. We've had fruitful times, we've had difficult times, it goes with the industry.
I understand all of that Watching (good summary though). I'm still confused why a significant number of EAs who frequent this site get defensive when the subject of lower prices comes up though? I'm not looking to provoke something by saying this, but I reckon most of the HPC brigade (myself included) would post far less if lower prices were presented here as the key to unlocking more sales rather than a hindrance.
@Paula
Very well, I have no interest in upsetting anyone. However, you clearly take a different view on things and given your experience I wondered if you would mind providing your take on a couple of things. I promise to take what you say ‘as is’ and won’t retort, but I am interested in hearing your thoughts.
1. What will lift the current low volume levels?
2. Will interest rates remain low over the medium term, and will debt be manageable?
3. In your estimation how long until house prices start rising again?
Genuinely interested in your perspective.
To those who don't understand EA concepts: You know who you are
We do not 'set' prices, we advise.
Asking prices can sometimes be keen, sometimes 'realistic' if you wish, more often than not optimistic or downright rude. In any case, an asking price seldom effects a selling price, which is a different matter altogether. A property is either FVM to buyers or it is not.
It goes like this:
Vendor tells us what he thinks his property is worth.
Buyer tells us what he thinks it's really worth.
We try to gain common agreement. Success = sale, fail = no sale.
Kerching.....
We supply our service for a fee.
We sell unit 1 @ fee £X,000 + vat Selling price aGREED is unimportant to us at the point of contract exchange in relation to our business bank balances.
At the end of any month EA,s talk to each other about exchange fees, not prices sold for, up, down or indifferent.
Prices and the direction of the market up down or same are very much an issue vor both buyers and sellers. EA's are more interested in transactions done.
another lesson endeth
Ray
As you defend FTBDan's right to be tedious do I tae it that you will also defend my right to have my glass half empty then - not that it ever is no matter how my views may come across!!
@ Ray Evans, thank you.
@ FtbDan - by your name tag I'm assuming you've never bought a house. Why would I take advice off you? I've helped hundreds of clients buy houses over the last 20 years as well as buying 4 of my own, all in very different market places. So forgive me but I shan't be taking any of your "advice/comments" on board, titanic or not.
@Paula “Why would this recession/economic climate put me out of business?”
Was that rhetorical, will you get annoyed if you actually get an answer?
I’m reminded of that bit in titanic where after they hit the iceberg, but before it’s dawned on most people that the ship will sink and the engineer bloke is running around warning people of the crises they face, but everyone is just annoyed he is interrupting their evening. After all, it’s only a slight knock, the boat will be underway any minute now.
Paula S - again, well said. More of your kind on this site would be a good thing!
@ Mike Wilson
Take 2 agents - one charges up front, the other works on a no sale no fee basis. Which will still be around in 2 years time...... you do the maths.
Unfortunately the public dictate how they pay us, and no sale no fee is what they want - we'd love to charge them from the day we start spending our money on them, but it's not going to happen.
Why would this recession/economic climate put me out of business? I've been an agent since 1989, I think I know what I'm doing thank you very much.
@rantnrave
FTB Dan has his views and a lot of 'facts' some of which are reasonable but my point was that he is becomng tedious. You yourself are not far behind? ;>).
Why not post more on some of the other subjects on EAT?
P.S. Well said Paula S
@Paula S
"Maybe the heat is getting to me, but please can all the non agents stop telling us how to do our jobs."
Fair enough. But, if you carry on 'doing your jobs' half of you won't have a job in a year or two's time and the UK economy - which needs a buoyant housing market - will suffer.
Collectively your industry has its head in the sand and your no sale no fee business model is going to put a lot of you out of business over the next 10 years (this is not going to be 'fixed' quickly).
FTB Dan: "And here is the crazy thing in this market. If a vendor accepts a lower price, they just pay less for what they buy, its no loss at all."
Okay, what you say is great - in an ideal world scenario. Unfortunately, we live in a FAR from ideal world. What you say works IF you are:
trading up;
without the need for medium to high LTV finance on either what you are selling and/or buying;
if the seller can see that particular wood through the trees;
and, most importantly,
IF you can find a seller who will play the same ball-game that you are prepared to play, and you actually hapen to like his/her house!
Without ALL of the above, you have a problem, Houston...
Maybe the heat is getting to me, but please can all the non agents stop telling us how to do our jobs. It's getting rather tedious. I wouldn't tell a dentist/doctor/shop worker (for example) how to do their job. Their response might not be as polite as mine.
Good summary Dan. I would imagine that given the present low transactions and high vendor expectations, on an anonymous site like this EAs would be keenly sharing ideas about how to talk down those expectations. I haven't seen anything like such a discussion. There was another thread a couple of weeks back where I tried to start one to see how much interest it would generate. Only Jonnie (to his credit) attempted to explain his strategy.
@AceofSpades
Of course, and on that we agree. However, the market is clearly dysfunctional right now. Volumes are low, turnover is long and getting longer, (albeit less so in my area).
So given that is where we are, something has to give, that could be:
1. Buyers are convinced to indebt themselves to extent necessary to meet vendor’s expectations. However, in time even this group will exhaust themselves.
2. Stalemate continues, low volumes becomes the new norms, many EA’s go bust. The UK housing market starts to resemble the French where each town has one or 2 EA’s they charge 7% and sell a house a month.
3. EA’s work on lowering Vendors expectations. Volumes pick up, the EA business resumes profitability.
Now if you believe that the debt crisis is a temporary blip, you just wait it out. But if not, each EA needs to decide how to respond. And I am not sure what they should do, other than work on Vendor expectations in a depression era. Any know, please say.
Ray - in the space of a few weeks, Dan has put across a consistent point that has been backed up by analysis and facts. I get the impression you disagree with those, but alas I'm left wondering why and with what information to support the point of view. Please feel free me to enlighten me though.
@FTB Dan
Do you not think, as I do, that your 'sermons' are getting a little tedious? However, I do defend your right to be so.
RE AceofSpades “buyers to expect to purchase for dirt cheap and watch the value rocket? “
We don't want to buy cheap to get equity gains. We just want to be able to afford one which won't stretch us to the max and collapse in value making it impossible to remortgage or buy bigger.
I would be happy for prices to fall to normal levels and go up with inflation and wages, no more.
Most people aren't property speculators they just want a family life.
I think all these buy to let investors b going into agencies over the last decade may of slightly warped estate agents minds to human reality.
Not every one is motivated by greed.
Hhhm hostile? Come on!
Please quote me on the full text, don't be selective, you look like The Daily Star if you do that - They are going bust.
"If we are now stereotyping, perhaps it is "natural order" for buyers to expect to purchase for dirt cheap and watch the value rocket?"
I said that in the same context that you said perhaps buyers expect to always sell for a higher value - that's a myth my friend.
The reality is you are looking to buy for as cheap as possible for, let's say, 'damage limitation' reasons.
Don't forget that the seller has their interests to protect as well. Many have a cut off point where they can't physically sell beyond. It's not as straightforward as taking a loss, then getting that same % knocked off your purchase.
Remember, while the seller is in their house and can physcially pay the bills, they don't have to go anywhere just yet.
Let's not lose sight that the seller is a human being with needs, expectations and necessaties - just like yourself. To suggest the seller cuts the price to suit the buyer is not really an open minded view or a solution, especially as they also enter the very same "depression" as you.
Your 2007 analysis was incorrect I'm afraid. They were correct at the time, but were never going to be the foundation of pricing. Prices, however, will exceed that level again at some point in the future.
I see where you are coming from, but please understand the sellers are entitled to wish to protect themselves from yours and the many other 'forecasts' out there, just as you are.
@AceofSpades “buyers to expect to purchase for dirt cheap and watch the value rocket? “
Sorry to answer the same point twice. But no wonder you are so hostile to me if you think that is what I am doing. I really am not. I am trying to buy cheap, to avoid losing any more than I have to over the coming depression we are entering.
@AceofSpades
Do you show the buyers who walk through your door the same hostility?
I think the nub of the issue is this, you think the 2007 prices were about fair, that upwards trajectory of house prices is only on a temporary pause and within a year or so will resume climbing. And that any amount of debt for any property price will in the long term prove to be a great investment. Am I getting you wrong, if so please accept my apology and correct me.
Let me tell you where I am coming from so you can see why I say the things I do about house prices and why I act the way I do regarding my own house hunt:
I think that the western economy should have had a short and nasty recession in 2001.
Massive liquidity injections at the time, and relaxing of capital requirements to avert a recession lead to a change in perception towards debt.
Most GDP growth in the last ten years has been an illusion, it’s just been borrowing money and spending it. This applies to governments and people.
All real growth over the last ten years has been largely in the East.
Today our economy is 25% actually making stuff and 75% services of various kinds, that is no recipe for growth. We are geared to operate in a debt bubble.
The existing debt is so high we cannot afford new debt. The debt bubble is over.
We could have much nastier recession than 2001, perhaps a 3-4 year, but government will not allow that. Instead we must have a zombie economy and zombie house market for ten year possibly longer, with a slow and grinding correction. Without wage inflation the market will only stagnant further.
So in summary, I think that YOU think, I am looking for a bargain that I can make a quick turn on. But I think Even if I get a realistic price I still expect it to go nowhere for many years to comes, and wage inflation will do little if anything to erode the debt which will hang around like a millstone.
@James “You have to use your skills to indentify how motivated a seller is then tailor your pitch to try and win the job. The true value of the house sometimes has very little to do with it, nor does the prospect of a buyer getting a mortgage. “
Some very interesting points James and I enjoyed reading your contribution. I was wondering, why not pitch two prices to the vendor? Effectively say, “I know I could sell your house for £x in the current market, however, I know a lot of agents will pitch at you with £x valuation, which will be harder to achieve at the moment but we can certainly try that if it’s your wishes and see how we go.
Also, are you suggesting that the corporate are actively working to suppress volumes and kill the market assuming that the independents will be driven out first and then they dominate the market? Or is it simply that the corporate tend to employ the younger and cheaper agents who don’t really understand anything but rampant HPI?
If we are now stereotyping, perhaps it is "natural order" for buyers to expect to purchase for dirt cheap and watch the value rocket?
"If a vendor accepts a lower price, they just pay less for what they buy, its no loss at all.."
A lower price? By who's or what value? If you sell your house for 10% less than its listed price, you HAVE to knock 10% off the next one minimum. What if other sellers of suitable property are only prepared to take 4% off? You CANNOT dictate across the board values.
How dare anyone say what the chain is to do in terms of offer making and acceptance. By all means, make your own offers, you control that - but that is where is stops. Offering less on the next property you buy is not as easy and realistic as you think it may sounds.
"Of course I will try for the best sale. But until you actually have the cash deposited in your account a ‘price’ counts for nothing"
So basically, you WOULD approach selling in the exact same way as a current seller. The last bit about it meaning nothing till the cash is in your account is just filler on your post. We all know that is the case, but it doesn't deny the fact that YOU would aim to drive the price as high as it could possibly go when you come to sell.
Phil S - Not seen you on here before, so perhaps you have missed the influx of HPC'ers who have screamed for 40-60% price slashes in the past. Realistic? That is who my reference is to.
I've seen many FTBs who are looking to buy on their own but are looking at 3 bed properties. Now if the realistic card is to be played, it can be thrown back in so many cases.
"Sellers are not jumping in head first to expose themselves to buyers (and HPC's - 2 separate breeds) to give them the bargain of a lifetime. Can I blame them? No.
Very telling comments, AceofSpades. Prices falling to realistic levels are NOT bargains.
Until attitudes like this change the housing market will never recover!
"Sellers are not jumping in head first to expose themselves to buyers (and HPC's - 2 separate breeds) to give them the bargain of a lifetime. Can I blame them? No.
Very telling comments, AceofSpades. Prices falling to realistic levels are NOT bargains.
Until attitudes like this change the housing market will never recover!
Mike
Here's the real problem.
To be an effective estate agency lister, one needs to be a bit of an actor. (liar in some language).
Of course one needs to understand property values. The trouble is though at the moment, many of the corporates are on a charge to crush the little guys, and they think that by listing as many as they can, at whatever price, they will take most of the market share and put the independants out of business.
So, if you are honest about how the market is working, your chances of securing an instruction are much less because there will always be a corporate coming along later with a higher valuation.
You have to use your skills to indentify how motivated a seller is then tailor your pitch to try and win the job. The true value of the house sometimes has very little to do with it, nor does the prospect of a buyer getting a mortgage.
You then have to accept, that in this market, you will do well to sell half of your listings, therefore, you end up frustrating some sellers, who are not prepared to reduce to what they should have been told in the first place.
Now, I advocate being straight with people, and try to tell them an honest figure, but it often goes down like a lead balloon, you dont get the work, and whats worse is you don't get it when they change agents, because actually the sellers are so tightly locked in that they cannot leave the agent that over-priced the house in the first place.
Agents will not co-operate, never mind agree to be collectively honest. But I agree they should.
Strikes me you, the estate agency industry, need to start telling all the mouthpieces of your industry, and the mortgage industry, to stop talking nonsense and agree on a message like 'times are tough, mortgages are a lot harder to come by than they were and only realistically priced properties are selling.'
It seems your whole industry is infected with some sort of disconnect from reality. As if a headline like 'property portals see 15% increase in traffic' is actually going to turn the market around. Or one you see on here regularly 'estate agents took more phone calls in April than they did in March - or in April last year - or was it February? - anyway it was definitely more - or less - I can't remember which - but it has to be worth mentioning surely?
Meanwhile the Samaritans take record phone calls from people loaded down with suicidal levels of debt? Are their calls up or down I wonder?
@FTB Dan
Please give it a rest - maybe go write a book! ;>)
In my view this whole subject could do with a rest for a month or so except for LR figures? (But what would we all do in the meantime - sell?).
@AceofSpades “I cannot remember a single agent suggesting on this website that they are better off selling one "over-priced" house than 7 (what you feel are) "realistically priced" houses. Nobody has taken that attitude.“
Of course they don’t think of it in that those terms. They have just got so used to ever increasing house price inflation they think its the natural order of things for a house (or its neighbours) to sell for a higher number every time it comes on the market.
Now I do have sympathy, you’re dealing with vendors after all. But a realistic price is one where it gets sold reasonably quickly. NOT where it sits on the market for months.
@“I would be interested to see your approach when you finally sell a house in your life. Will you want the agent to get you the best market price for your home? I suspect you will... “
Of course I will try for the best sale. But until you actually have the cash deposited in your account a ‘price’ counts for nothing. I may not have sold a house, but I have bought and sold many businesses, and sometimes you have to accept a loss and move on. Alternatively, you can hold your position all the way down if want, or you can move onto where you actually want to be. I’ve seen plenty of investors get wiped out because they could not bring themselves to accept a loss. The type of people who would not step away from a falling lamppost because they think it’s going to go back up again.
And here is the crazy thing in this market. If a vendor accepts a lower price, they just pay less for what they buy, its no loss at all. Why is that so difficult to see. Why are some people on here dependant on volumes objecting to that so strenuously.
@” Houses are selling, albeit slower than, yes, you said it, 2007 and we are creeping out of a recession”
Goes to show how markedly different our expectations are. You think we are coming out of a recession. I think the refusal to actually have a recession is creeping us into a depression. Each to their own on that one.
@” I am starting to think you are actually quite bitter! “
Think that if you like, as long as you want to attack my arguments than me personally. I have no time for ad hominem attack.
Sorry "easily"
Has everyone lost their marbles? Who writes these reports?
April was rubbish due to too many bank holidays - only 18 working days
May was rubbish to start with because not enough chains were started/built in April
June has just got back on it's feet a little, but is still patchy. Good in some places, rough in others.
At least there is not a world cup or european championship to distract the nation in July - thank god
Activity in the market is very fragile and easilt distracted
@Ray Evans
Ray I just say it how I see it which at least 50% of the time is how it is or turns out to be. As it happens and as I have said beforte life is pretty good generally, has been especially kind to me and I am an eternal optimist.
But I am also a realist and above all abhor Emperor's New Clothes Syndromne (ENCS there we are I've introduced another acronym to sit alongside all the others that apear here and half the time I don't understand!!) no matter what it is being related to including opinion on the property market.
What on earth is the point in 'news' like this other than as publicity and name awareness for Hometrack?
Frankly if the figures had shown a further reduction on last month and even worse 12 months ago we'd all be going to financial hell in a handcart which might still happen. Or shouldn't I be saying that either?!! But no they show the most marginal increase possible when you deal with the actual figures (as opposed to %ages) but those wanting to talk the market up (vested interests?) then announce corners turned and Brave New world just around the next one.
I don't want lower prices, I don't particularly want an overheated market either. But what I would like is sensible and, above all, realistic comment on a market that is clearly in poor health, has been for knocking on for 4 years now and will be for some time to come.
If the patient is obviously and seriously ill you don't ignore the symptoms and above all fail to treat them - do you?
@Paul “looks like someone sold you a property and nobody wanted to take your silly offer. Your comments are typical of a disgruntled buyer who feels he should have got his property cheaper.”
Paul, no, I have put off actively looking until the winter at least. I feel I should get my property cheaper.
@ “Guess what our job as EA's is concerned? Sell property at the highest possible price because if we don't and get caught out underselling we get hauled over the coals and then have to pay compensation.”
I have no problem with EA’s mate, so relax on that front. But the key part of your comment above is ‘sell’. Failing to challenge unrealistic vendor price fantasies leads to restricted volumes.
@ “The problem with the market today is that everyone is talking it down and until it does get to lower prices you pay the going rate now.”
The problem with the market Paul is that buyers and sellers cannot agree ‘the going rate’ which leads directly to low volumes. We just have this standoff, were buyers with finance watch and wait, sellers wanting to move hold out because they think if they just hold out a few weeks longer normal service will resume and they can get as much as number 37 got in 2007.
@“ If prices were rising fast would you offer more on the basis that it will be worth more come completion?”
Maybe, but then again IF my uncle had ovaries he would be my aunty. It’s not happening so not a concern.
You can take issue with me sir, but it is in your interest to sell more for less. And letting a vendor think they can achieve a number they plainly cannot is in no one’s interest.
May of course had two bank holidays. By my quick reckoning, there were 20 working days (not incl Sat) in May and 22 working days in June (which we're still in admittedly).
So, we have a 10% increase in sales in a month with 10% more working days...
I don't get the 'turnaround' bit. So April is busier than March, and May is busier than April. Looks like business as usual to me. This happens every year. What's the comparitive data to 2009 and 2010, rather than on the previous month?
People whose houses are priced sensibly are selling. The fantasists, those who are not serious about selling, and those who know their price is too high but who bought fairly recently and can't afford to take a loss, are not selling.
The only turnaround I can see is that the penny is finally dropping that 2007 prices are a mountain peak far behind us now. If this trend continues, than a recovery - in volumes at least - can't be far away.
Erm,, Paul, you might want to forget the "highest possible figure" that's been drilled into you by your corporate agent upbringing.
If you get someone moved, and the cost to move is no more than they wanted to pay, then you have done your job and they will be delighted. If they got offered £30k less than their asking price, and you can get the house they want to buy to drop £35k, then you've just made them a £5k WIN on the deal. I know (before you all start shouting it) that some sellers don't have the equity to do this kind of thing, but a lot do, even if it is using smaller sums.
Encourage your sellers to stop digging their heels in for the price they want, and get them to start looking at the difference between what they buy for and what the sell for, and you may find things start to improve.
Please feel free to flame. I know it works, cos it's been working here for ages.
FTB Dan - I cannot remember a single agent suggesting on this website that they are better off selling one "over-priced" house than 7 (what you feel are) "realistically priced" houses. Nobody has taken that attitude. In fact, it's complete statistical rubbish.
I would be interested to see your approach when you finally sell a house in your life. Will you want the agent to get you the best market price for your home? I suspect you will...
Houses are selling, albeit slower than, yes, you said it, 2007 and we are creeping out of a recession, so it's not that bid given the circumstances. Sellers are not jumping in head first to expose themselves to buyers (and HPC's - 2 separate breeds) to give them the bargain of a lifetime. Can I blame them? No.
I am starting to think you are actually quite bitter!
Rant- completely agree - it's not a "turnaround" but certainly a positive turning point.
This doesn't read like much of a turnaround. However, if the focus is on the sales part, then it is a recovery of sorts. And, afterall, EAs require turnover for business above say high prices - a point that doesn't get much mention from some of the regular posters here!
FTB Dan - looks like someone sold you a property and nobody wanted to take your silly offer. Your comments are typical of a disgruntled buyer who feels he should have got his property cheaper.
Guess what our job as EA's is concerned? Sell property at the highest possible price because if we don't and get caught out underselling we get hauled over the coals and then have to pay compensation.
The problem with the market today is that everyone is talking it down and until it does get to lower prices you pay the going rate now. If prices were rising fast would you offer more on the basis that it will be worth more come completion?
Answer on a pinhead please.
So let me get this right. As prices go down, volumes go up disproportionally ahead of the falls. Perhaps there is a hidden message here for a profession that makes a living on volume rather than price.
It’s that EA’s need to work aggressively on lowering their vendor’s expectations. You’re not De Beers. You don’t win by keeping prices artificially high and volumes down.
Although having said that I would not be surprised to now be loftily lectured by an EA who wants to tell me they are far better off selling 1 or overprices house a week than 7 realistically priced houses.
In our experience, this month has been worse with vendors more reluctant to accept offers. The last 7 days has however been better that the first 2 weeks. Sadly, the stats are averages which fail to convey the extremes they represent.
@Industry Observer.
Will you ever have a glass that is half full instead of half empty.
When I was at school 10% of a very small figure was an even smaller figure.
Turn around indeed - what utter nonsense. Just when realism is what the industry needs most out comes another load of tripe.