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I had an interesting visit from an estate agent yesterday. I'm tentatively wondering whether to, as the expression goes, "sell-up". The advice I seem to be getting from some is that this time is as good as any to do it given that if you can get a buyer (big if) then you then may be able to pick up a bargain for your next property. That's the theory anyhow. So in whizzs Daren last night for a valuation, and he stayed for nearly an hour. The fact that we could command his undivided attention for 50 minutes is probably as good an indication of the state of the market as any of the gloomy statistics doing the rounds at the minute.
Daren played a canny sell on us, describing the bizarre states of the current market while claiming that some fundamentals were still there to ensure that we're not going to hell in a handcart just yet (although a visit to one of my colleagues' - he rents rather than owns - favourite websites House Price Crash has a slightly different perspective). In amidst the agent talk he made some interesting points:
- The market was unsustainable. A bit of an obvious one but worth stressing. So here in London, and probably elsewhere, housebuilders have desperately tried to fix high prices they have sold at on the Land Registry when in reality they have offered a raft of reductions (stamp duty, cheap mortgages) to buyers to snap them up. Unsurprisingly that whole edifice is starting to collapse around their ears. My agent cited the example of a nearby development in east London where the developer sold a whole chunk of flats to foreign investors claiming they were in the City of London (a somewhat fanciful claim), and hence hiking up the prices. Now more nervous investors have wised up to this and are pulling out of deals and the prices are at more sustainable levels.
- Credit crunch and price crash? There undoubtedly is a credit crunch but is that really affecting us Joe Publics. You can get a mortgage, Daren stressed and I don't disbelieve him. As with much of economics it comes down to sentiment and buyers are running scared about media reports. And Daren added that current statistics on prices were dubious given the pitifully low volumes of transactions.
- The web and sentiment - One interesting point Daren added was related to the a major shift in consumer behaviour in recent years. Back when there was a property lull post September 11 we used the web for property but much more superficially. Now you can almost stare into toilet bowls of houses or flats such is the detail on offer. This means much less one on one contact between buyers and agents. Possibly a good thing you would argue but it restricts the Darens of the world from putting their particular spin on the property market. Hence I suppose he was sat in my flat giving it everything he had last night.
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