Sellers have launched "their own sale" in response to the stagnating market by slashing asking prices according to Rightmove - but some sellers have not cut enough.
The portal says sellers of homes that are new to the market have trimmed asking prices over the past month by a modest 0.8 per cent; more dramatically, 37 per cent of properties already on the market have reduced their asking prices since first being listed.
The 37 per cent figure represents the highest proportion at this time of year for five years, the portal says in its latest monthly market snapshot.
"In the run-up to the festive season many sellers are trying to tempt distracted buyers to look at their property by dangling the bauble of more attractive pricing given the quieter time of year and more challenging market" says Miles Shipside, Rightmove director and housing market analyst.
"Many sellers who have been on the market for a while are curbing their initial pricing optimism and are hoping that reducing their property price will result in buyers selecting it as this year’s must-have Christmas gift. The effect is an impromptu Autumn Sale with the largest proportion of sellers on the market having reduced their initial asking prices at this time of year since 2012” he adds.
A drop in new seller asking prices is the norm at this time of year in the run-up to Christmas, and the 0.8 per cent fall (the equivalent of £2,392) is the smallest that Rightmove has recorded in November since 2007, in the early period of the credit crunch.
However, with the largest proportion since 2012 of existing sellers at this time of year who have reduced their initial asking prices, the portal says it seems that many of this month’s new sellers are being too optimistic by not discounting by a greater factor than 0.8 per cent.
For those who have had to reduce their asking price at least once, the average size of reduction between first marketing price and current asking price is 6.3 per cent.
Analysis of those properties that actually sold last month after having reduced their prices shows that their average reduction between initial and last advertised asking price was also 6.3 per cent. For these sellers, their price reductions tempted buyers to make an offer, and a sale has now been agreed.
Shipside advises: “Given that the market has been price-sensitive for a while and a five-year high proportion of sellers are slashing their prices, some sellers and their agents are over-pricing. These sellers may well be asking themselves if they could have saved some time and stress by pricing a lot more conservatively than an average of more than six percent ahead of what the market subsequently proved it could sustain."
Rightmove analysis of over 100,000 properties that successfully sold shows that those that sell typically generate over 40 per cent more online interest in the first three weeks than those that do not sell.
"The danger of going too high at the outset is that you jeopardise that vital initial three-week period, and may have to start on a series of price reductions while potential buyers watch and assume that no-one is buying your property because something is wrong with it other than the price. An average reduction of over six percent means that some properties will be considerably more over-priced than that, and such a big margin of error in the initial price of many properties that come to market can leave them stale and unsold” adds Shipside.