The average house for sale on Rightmove, the UK's authoritative property website, stands at 237,000 according to their May House Price Index. That's 10,000 up on May 2010. In the same period Halifax, the country's largest mortgage lender, says that property prices have dropped 4.2% to a typical 160,519. Quite a disparity.
The number of unsold properties on estate agents' books numbers 71 per branch, up for the third month in a row to near record levels, again according to the latest Rightmove monthly index. So you don't have to be Adam Smith to work out that the numbers just don't add up. Especially with transactional volumes being half what they were in 2007. Asking prices are too high versus the reality of what properties are worth. And 'worth' are what buyers these days are willing to actually pay.
All across the UK, owners of homes for sale keep trying to justify why their property is worth more than anyone else's in the area. Perhaps it's the conservatory looking out over a south-facing garden, the imported granite worktops in the kitchen or even that double garage. Whatever the reasons, they all go towards upping the value of one's own des res. And it's understandable, but isn't the onus on our local estate agents - who really ought to know their business - to break it to us as gently as possible that when it comes to a valuation, in most cases we're being hopelessly optimistic ... and to give us a healthy jolt of property-price-related reality? After all, those looking to buy property online are very aware of prices and local comparisons, and very few suffer overvaluations gladly.
Unfortunately, though, it seems to be common in the estate agency business to give the type of private house sale valuation that gives potential clients enough hope to sign on the dotted line there and then. It's amazing, the effect of adding a few thousand unrealistic pounds to a house price. So it's no surprise so many houses have been unsold for so long ... and that number is growing daily.
Why does an industry that survives on sales volumes so hinder their own chances of success by pricing houses above the bar? It could be that they are locked in a mindset left over from the heady days of double digit house price growth where an over valuation would be caught up with by the rising market? Indeed many current young estate agents will only have known those good times which lasted so long and are blissfully unaware of the necessity for shifting attitudes when buyers reign instead of sellers.
It's got a lot to do with competition. Naturally every estate agent will do all they can to be awarded that precious instruction, and with it, equally naturally, those all-important estate agent fees. And the more appealing that valuation, the better the chance an agent has of getting that instruction - even though the property in question is going to be listed at a ridiculously high price and won't sell. It's also got a lot to do with fear. After all, would you like to tell a vendor that his pride and joy, which cost 200,000 at the top of the market, is worth 30,000 less today?
Even though the logic behind it all is somewhat dubious, I'm giving the property industry the benefit of the doubt here. If I didn't, you'd have to conclude that the reason so many Jeremys, Julians and Jameses are whizzing up and down suburban streets in their be-logo'ed Minis ruining the whole property business for everybody - including and perhaps especially for themselves - by inflating property valuations beyond the bounds of practicality, if not believability, is just a complete lack of professionalism. Now that makes sense, doesn't it?
The number of unsold properties on estate agents' books numbers 71 per branch, up for the third month in a row to near record levels, again according to the latest Rightmove monthly index. So you don't have to be Adam Smith to work out that the numbers just don't add up. Especially with transactional volumes being half what they were in 2007. Asking prices are too high versus the reality of what properties are worth. And 'worth' are what buyers these days are willing to actually pay.
All across the UK, owners of homes for sale keep trying to justify why their property is worth more than anyone else's in the area. Perhaps it's the conservatory looking out over a south-facing garden, the imported granite worktops in the kitchen or even that double garage. Whatever the reasons, they all go towards upping the value of one's own des res. And it's understandable, but isn't the onus on our local estate agents - who really ought to know their business - to break it to us as gently as possible that when it comes to a valuation, in most cases we're being hopelessly optimistic ... and to give us a healthy jolt of property-price-related reality? After all, those looking to buy property online are very aware of prices and local comparisons, and very few suffer overvaluations gladly.
Unfortunately, though, it seems to be common in the estate agency business to give the type of private house sale valuation that gives potential clients enough hope to sign on the dotted line there and then. It's amazing, the effect of adding a few thousand unrealistic pounds to a house price. So it's no surprise so many houses have been unsold for so long ... and that number is growing daily.
Why does an industry that survives on sales volumes so hinder their own chances of success by pricing houses above the bar? It could be that they are locked in a mindset left over from the heady days of double digit house price growth where an over valuation would be caught up with by the rising market? Indeed many current young estate agents will only have known those good times which lasted so long and are blissfully unaware of the necessity for shifting attitudes when buyers reign instead of sellers.
It's got a lot to do with competition. Naturally every estate agent will do all they can to be awarded that precious instruction, and with it, equally naturally, those all-important estate agent fees. And the more appealing that valuation, the better the chance an agent has of getting that instruction - even though the property in question is going to be listed at a ridiculously high price and won't sell. It's also got a lot to do with fear. After all, would you like to tell a vendor that his pride and joy, which cost 200,000 at the top of the market, is worth 30,000 less today?
Even though the logic behind it all is somewhat dubious, I'm giving the property industry the benefit of the doubt here. If I didn't, you'd have to conclude that the reason so many Jeremys, Julians and Jameses are whizzing up and down suburban streets in their be-logo'ed Minis ruining the whole property business for everybody - including and perhaps especially for themselves - by inflating property valuations beyond the bounds of practicality, if not believability, is just a complete lack of professionalism. Now that makes sense, doesn't it?
About the Author:
eMoov makes it easier for you to sell your house online. You can sell your home quickly and with the benefit of cheap estate agents fees. All our estates are added to UK's top 25 property websites including Rightmove and Prime Location, to be viewed by 170 million buyerss each month. Plus as Internet estate agents, their low cost service reaches millions of people 24/7.
No comments:
Post a Comment