Reply to: House prices 'fall to 2004 level'

[BrilloPad]

You are missing the point - all that "3 bedroom house" stuff is meant to be misleading as it lacks objective metrics that allow to make like-for-like comparison. You can't even do that easily if two houses sit next to each other in the same place - the pricing is (or was) essentially as much as they can get away with it disregarding objective factors.

Like for like (nice area) house in Brum is going to bigger than that in London for less money.

Well of course. In Brum there are no jobs. Same is true for London this year but next year it will be business as usual.

[AtW]

Only small if in a twatty area of London. There are some great places if you know where to look.

You are missing the point - all that "3 bedroom house" stuff is meant to be misleading as it lacks objective metrics that allow to make like-for-like comparison. You can't even do that easily if two houses sit next to each other in the same place - the pricing is (or was) essentially as much as they can get away with it disregarding objective factors.

Like for like (nice area) house in Brum is going to bigger than that in London for less money.

[BrilloPad]

What always amazed me is that in this country prices were quoted for houses without clearly stated actual sq ft (or meters) - don't know for other countries than former USSR but there price of place was calculated on the basis of price per sq meter and multiplied by number of sq meters available in property.

It's just one of those scammy things in this country designed to cover up the fact that London properties are not just more expensive but also smaller (on average).

Only small if in a twatty area of London. There are some great places if you know where to look.

[AtW]

I looked round one in Leeds a few months ago with a friend who was looking for a new place and they wanted >£200k for a flat smaller than some hotel rooms I've stayed in

What always amazed me is that in this country prices were quoted for houses without clearly stated actual sq ft (or meters) - don't know for other countries than former USSR but there price of place was calculated on the basis of price per sq meter and multiplied by number of sq meters available in property.

It's just one of those scammy things in this country designed to cover up the fact that London properties are not just more expensive but also smaller (on average).

[TykeMerc]

I agree that a 30% drop since early/mid 2008 is probably realistic for houses that were >£300k.

The "value" of properties had inflated way past what people could afford to pay without gigantic (in real terms) mortgages, a correction was inevitable. The total collapse of the mortgage market means that the correction may well end up at 50% rather than the 35% which I expected.

The city centre flats market was totally absurd, I looked round one in Leeds a few months ago with a friend who was looking for a new place and they wanted >£200k for a flat smaller than some hotel rooms I've stayed in, it certainly didn't represent value for money in any real sense, at £35k it would still have been a rip off.

[AtW]

I'm given to understand there's a new series of Relocation,relocation (I haven't seen it myself). Has the UK gone completely mad?

Shortly followed by: Repossession, Repossession, Repossession ...

[MrMark]

Same here. They are playing the game they can't win, but I think the issue is not so much agents but sellers who can't yet appreciate that fact that they got owned by the scammers.

While on the subject - I don't watch TV (apart from news), are those house improvement programs (like buy house, improve it and sell for profit) still shown or they got cut?

I'm given to understand there's a new series of Relocation,relocation (I haven't seen it myself). Has the UK gone completely mad?

[AtW]

I saw prices that I'd guess haven't shifted downwards at all and many properties on the market for I'd guess >12 months.

Same here. They are playing the game they can't win, but I think the issue is not so much agents but sellers who can't yet appreciate that fact that they got owned by the scammers.

While on the subject - I don't watch TV (apart from news), are those house improvement programs (like buy house, improve it and sell for profit) still shown or they got cut?

[Fred Bloggs]

I just had an independent open market valuation on my place today to get a figure for my solicitor of an actual achievable selling price. The property went on the market in June for £399k, I was told today it would achieve in current climate £280k-£300k so over 30% drop, scary.

Probably realistic though. Funnily enough I looked in an estate agents window this morning for the first time in probably 5 or 6 years. I saw prices that I'd guess haven't shifted downwards at all and many properties on the market for I'd guess >12 months. Well no wonder they aren't selling. Nobody can afford to buy at those prices. Until everyone bites the bullet and accepts a 35% cut in value the overall market is doomed to stay frozen solid I'd say.

[Bumfluff]

I just had an independent open market valuation on my place today to get a figure for my solicitor of an actual achievable selling price. The property went on the market in June for £399k, I was told today it would achieve in current climate £280k-£300k so over 30% drop, scary.

[AtW]

Not quite true. Just put it up for auction and see what the highest bid is.

When people talk about "liquidity" they mean converting asset into liquid form (usually cash) without losing much money in process - this is not possible right now (for many types of assets without losing big chunk of investment), which is why markets are not liquid - housing market usually hits people more than anything because purchase of a house is usually the largest transaction normal people do in their lifetime.

So, when you can't sell asset without losing big chunk of money (that you would not lose if you can sit it out) it stops being liquid.

[AtW]

Banks are now forcing valuations at 20% off peak prices.

It depends on deposit - they are forcing big enough to cover bank's arse (which it won't as prices will fall 50% off peak).

The point is that lieing biased barstewards are trying to make people believe that prices have fallen to level of 2004 where as it's not the case in my view - they are just trying (bordering on fraud in my view) to get buyers into the market.

[Iron Condor]

The housing market has no liquidity; it's very hard to convert a property into cash right now. You just cannot really say what any property is 'worth' in such circumstances.

Not quite true. Just put it up for auction and see what the highest bid is.

[swamp]

My local estate agent hasn't changed its shop front in a year. The same properties seem to be there at the same prices twelve months ago.

The housing market has no liquidity; it's very hard to convert a property into cash right now. You just cannot really say what any property is 'worth' in such circumstances.

If the price of flats really collapses, especially after forced selling this year, then big houses will follow suit. Without first-time buyers there is no property market.

[NickFitz]

WGAS.

HTH.