08 May When does wishful thinking become self-delusion?
Every homeowner in the country wants to get the best possible price when he or she sells, but when does wishful thinking become self-delusion?
We believe, here at The Bungalow Centre, that the signs are beginning to appear that would indicate that the property market is beginning to undergo a long overdue price correction.
The market is virtually coming to a standstill because buyers are no longer willing or able to pay the absurdly high prices being demanded by a significant proportion of sellers; aided and abetted by unscrupulous estate agents who told their property owner client what they think they want to hear and, in so doing, has attached an asking price which will deter any interested buyers.
Buyers are not fools… many may be willing to pay a little more for a home that ticks all their boxes but they are unwilling to pay the exorbitant prices being asked for some properties.
The UK property market is entering a dangerous phase in which some sellers are deluding themselves in to believing that their property is worth far more than it’s true value.
A friend of mine who lives in Christchurch asked my opinion why it is that there are a number of homes on the market, near where he lives, after many months are remaining unsold. He went on to say that many of these properties seemed dramatically over priced, and here lies the root of the problem.
Some people have fallen in to the trap of thinking that their home will achieve their asking price, however unrealistic. As a result, there is signs of a rebellion by prospective buyers who refuse to be taken for a ride.
I am not suggesting for one moment that property values are going to drop like a stone but we do feel confident that there will be a gradual reduction over the next few years.
Pre 2008 everyone ridiculed the notion of a fall in property prices… a fall that has subsequently amounted to as much as 50%. Whilst our property market is different to the US property market similar rules still apply. If property is no longer perceived as affordable then people won’t buy. They will either continue to rent or just stay where they are until prices become affordable again.
This impending correction is not necessarily anything to be feared. If we sell for 10% less, we should be able to buy for 10% less; the difference should be perfectly acceptable.
If sellers will not accept the truth of the situation then they could be faced with the prospect in the future of having to accept a very significant reduction in order to attract a buyer. Nobody wants that…
The truth of the matter is that now is an really good time to move and, provided you adopt a realistic ‘asking price’ your agent should be able to attract a buyer in a reasonable period of time.
We would be happy to tell any caller how to find out on the Internet the true value of their home.
This will then enable them to verify the valuation provided by local estate agents some of whom may be tempted to dramatically over-value their home, so as to be sure of gaining the instruction to sell their property.
So let’s agree to be optimistic in order to get the best possible price, but not delusional which will merely guarantee we fail to attract a buyer.
John Nixon Senior partner at The Bungalow Centre