So why is the sales market stalling
Friday, October 14, 2011 by Ed Mead
Most of them don’t give you any useable objective data, although there are plenty of pundits out there attempting to prove their efficacy. But CLG reporting a 0.6% rise in house prices last month is just what the housing market doesn’t need.
The issue is asking prices. They’re already almost back to previous peak asking prices despite actual prices being down over 15%. It seems that great swathes of the country are living in cloud cuckoo land when it comes to selling. Given we’re four years into this new paradigm there will soon be a new generation of budding property owners who will have only ever been aware of prices going down, but at the moment we’re stuck with the previous generation for whom downward prices are an affront. Its clear ego can get in the way of selling for less than you paid, and I’m not stupid enough to ignore those in negative equity for whom there’s no easy way out.
So why aren’t people selling at prices people are offering, because don’t get too negative here, people ARE offering, it’s just that sellers are not accepting.
It can’t be stated often enough but there are many more winners than losers in a falling market. If you’re looking to buy a bigger property you may lose £50k on your sale but save £100k on your onward purchase. So who wins there.
I’m afraid the blockage here is caused by the agents. Estate Agency has moved from downsizing three/four years ago to survival mode. Appalling transactional volumes have bought the industry in some parts of the country to its knees, and for an agent to survive they must have stock. Facing closure is it any wonder that agents are telling sellers what they want to hear.
Before you jump on the agents though, and with a seller’s hat on, why would you, if your house has failed to sell for three months, give it to another agent at the same price. Many do, and you don’t really need to look a lot further to see why the UK property market is stalling.