I’ve just woken from a nightmare. Last week I explained how some houses were actually worth around 20% less than they were 12 months ago – if you really wanted to sell.
In the nightmare I had last night houses were no longer a one way bet with buyers queuing round the block. Estate agents had to work for their fee and 2000+ who hadn’t were loosing their jobs. There were record numbers of new homes for sale – nearly 1.8 million and the number of homes actually selling had fallen to a 16 year low. In my dream prices for the April-June quarter were officially confirmed to be down 15.4% compared with the same quarter last year!
Officially – down fifteen point four percent!
But it turns out that this is no dream. These are the numbers released this week on the US housing market where the S&P/Case-Shiller survey has been published and if you look at the detail there are some real horror stories. The biggest falls of prices from the 2nd quarter of last year were Las Vegas (down 28.6%), Miami (-28.3%) and Phoenix (-27.9%). People in Charlotte in North Carolina had the best results – they only saw a 1% fall!
The US housing market differs from ours in a number of ways but many of the fundamentals are linked – the Brits are still the largest group of buyers in Miami which just goes to show quite how stupid some people are. With prices ‘officially’ only 8% lower over here is it reassuring to know that there are places where the market has already fallen twice as far? That would be like average house prices here being about £30k lower than 12 months ago!
Back home there is one piece of ‘good’ news for us to cling to. Mortgages for Buy-to-Let back here in the UK is only 18% down for the first half of 2008 compared with the previous six months. I say good news but what this shows is that there are still a bunch of lunatics who think that now is the perfect time to buy. 144,600 buy-to-let mortgages were completed according to the Council of Mortgage Lenders. While the number of more general mortgages was down about 50% and the number of repossessions is up a fall in B-2-L of under 20% is astounding. These people don’t need help and advice, they need sectioning!
Scrap Home Information Packs?
Finally, the shrinking membership club that is the National Association of Estate Agents has called (again) for the controversial Packs to be overhauled. They would like them stripped down to include just an Energy Certificate, a sellers questionnaire and the Land Registry title with plan.
To this I would add the facts of the property including the number of bedrooms and measurements, a list of fittings available and information concerning works done to the property. I wouldn’t keep the local searches which I don’t think can be relied upon, whatever others say.
It has been suggested that estate agents Connells have produced a survey saying that HiPs have cut the time taken to sell a property (presumably the time taken to exchange contracts) by 12 days. To be honest, I’m not sure this is the year to come out with this kind of stat. What most agents, buyers and sellers want is something that will help more than one in six homes sell! Each spent £300 on a Pack. Only one sold. Five others should have a glossy pack that will remind them how much their heating bill will be this year but have no buyer. Thats over £200m spent on Packs so far that no buyer needed. There must be a better solution. Ideas please…..