House sellers need to be more realistic
Sellers seem oblivious to the fact that the housing market is in decline. It's time to start pricing property more realistically.
My husband and I have been looking for a house to buy in the South East for 12 months. We were lucky enough to sell our old home last year and, because we couldn’t find anything to purchase, we moved into rented accommodation.
So far, we’ve been here for nine months with half of our stuff in boxes because we thought we would find a property quickly. How wrong we were. Now I’m thinking that we might as well start unpacking because we’ll be renting for a lot longer than we thought.
There are very few houses on the market – most sellers are downsizers, couples getting divorced or families where the owner has died. They have to sell. Yet despite the weak housing market, selling prices still seem – to us at least – unrealistically high.
Half of people intending to buy believe that selling prices in their area are way above what they see as “fair and reasonable”.
And while sensibly priced properties go like hot cakes, overpriced homes can languish on the market for a year. The owner of one home we viewed which needs a lot of work gradually reduced the price by £30,000 but – still too expensive – it hasn’t sold.
Apparently we’re not alone. New research from property website Rightmove found that half of people intending to buy in the next 12 months believe that selling prices in their area are way above what they see as “fair and reasonable”, yet only a third of sellers agree.
Around 56% of sellers said that their biggest concern was receiving a “sensible” offer. Rightmove thinks that this mismatch between sellers and buyers is bad news because fewer properties will be sold and the housing market could stall even further.
The national average asking price hit another record high in the month to mid-June, rising by 1% to £246,235. According to Nationwide and the Office of National Statistics, the average house now costs five times the average salary, compared to an average of four seen between 1988 and 2003.
Either price your home realistically or take it off the market altogether.
Our homes are our biggest investments. Nobody wants to take a major hit on the price of their property, but in this market, if you want to sell you have to be reasonable. We’re in a double-dip recession. Mortgage lending is at an 18 month low, buyers have to come up with vast deposits to satisfy the banks, pricing many first time buyers out of the market, and many people still fear losing their jobs.
With the current Eurozone problems, things could get a lot worse. There are countless reasons why house prices should be falling – and in many areas, such as Northern Ireland and the North of England – unfortunately they have dramatically. It is the lack of available properties in the South East and some vendors’ determination to persist with unrealistically high pricing which is keeping house prices artificially high.
What we learned when we were selling is that, at the end of the day, a property is worth not what an estate agent tells you it is, but what a buyer is prepared to pay for it.
If you are serious about selling, then you either have to price your home realistically or take it off the market altogether and wait – what may be several years now – for our sickly economy to bounce back.
- Piper Terrett is a freelance financial journalist and author based in Hertfordshire specialising in saving money, greener living and investing
WHAT DO YOU THINK? ARE SELLERS BEING UNREALISTIC? LET US NOW IN THE COMMENTS SECTION BELOW OR USING #SOCIALVOICES ON TWITTER
Welcome to #socialvoices. This is the home of sharp writing, opinion and social debate on MSN. Jump into the comments, tweet us with the hashtag. Join in.
Which of these financial mistakes have you made most often?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- Accidentally giving wrong information on a credit application
- Forgetting to make a repayment on time
- Making multiple credit applications in a short space of time
- Not checking your credit report before applying for new credit
- Not staying within your agreed credit limits
- Taking on too much credit that you’ve then found hard to manage
- Forgetting to sever financial links with a previous partner
- Not having enough of a credit record