Last week the Halifax reported that house prices had fallen 3.6% in September. Today Rightmove says that asking prices rose 3.1%. What is going on?
I have a dream. In it I find the unclaimed Euro-millions ticket, Stevenage Borough win the FA Cup, my pigs win prizes at the Herts show and Patsy Kensit agrees to one last roll of the dice! Sadly, like those optimistic home owners who put their houses up for sale last month there is a deal of difference between what one dreams of and what actually happens. In real life Pat Butcher is a more likely result!
Every October it’s the same thing. People have a good summer and come back to put their house up for sale – most years asking a hefty 3%+ more than those who listed over the summer. The 105,769 properties that Rightmove.co.uk listed last month each typically wanted £7,000 more than the average property had asked the previous month which is crackers.
Aspiration is a fine thing but sadly, as Ms Kensit is no doubt relieved to know, there’s a world of difference between dreams and reality. Of the 105,000 only 9,000 of these optimists will find a buyer in the next month leaving roughly 92% wondering what they should do next. Rightmove’s own numbers suggest that enquires for a property fall by over 50% after the first week so getting the price right in the first place is essential if you want to draw buyers to your property. Appearing cool and aloof may feel good but serious sellers appreciate that you can’t sell something without interested buyers and with fewer buyers around in the first place you need to do everything to attract them – most importantly appearing realistic about your asking price.
Estate agents are partly to blame. Not all are tough enough with their advice and some are prepared to win an over-priced property in the knowledge that eventually the price will come down and that it should then sell.The truth is that at current rates even if you left the property on the market for a year it has less than a 50% chance of selling.
Vendors in London were even greedier with average asking prices rising 5% in the Capital last month. Low levels of supply offer some justification for this but since volumes of new properties are up 34% this argument is now wearing thin.
What sellers and their agents will eventually come to appreciate is that buyers are now in the driving seat. Marketing a property with an over-ambitious guide price just makes you look foolish – particularly when you come to reduce it as 30% of sellers did over the summer. The internet has made the marketplace more transparent and buyers can see for themselves what is really happening. Values of any asset are based on what a they sell for and not what the owner is asking yet agents often hear that so-and-so is asking ‘X’ for his house so mine must be worth ‘Y’. “His isn’t so neither is yours!”
Like those who sit in the middle lane of a motorway, greedy sellers get in the way of others and are an annoyance. The only satisfaction I have is that most are punished in due course for their greed although most could have got more if they’d only been sensible at the start.