January 31, 2023

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As house prices start to decline in many ways, the real estate market is at an impasse.

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There is a growing number of sellers setting unrealistic asking prices, perhaps due to higher valuations received in recent months. Meanwhile, potential buyers stand and wait for the value of the house to fall.

Seven out of 10 real estate agents say home sellers are unrealistic about how much their property is worth, according to real estate agent membership body Propertymark.

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Agents say sellers are overpricing their homes either because they think they have the best house on the street or because they want to sell at a price that will allow them to take the next step.

This means that many are putting up for sale more than their property is actually worth.

High expectations: 71% of real estate agents believe that sellers are unrealistic in how they price their property, according to Propertymark.

Sellers can get away with it in a hot market, but for the time being, demand among homebuyers is waning.

According to Zoopla, homebuyer demand has fallen 50% in the last three months of last year. The number of matched sales was also down 28% year-over-year.

This is in line with what real estate agents tell Propertymark.

Its latest data shows that the number of potential homebuyers registered with agents has dropped from 2.5 per available property in December 2021 to 1.4 per property in December 2022. This is a 45% decrease from last year.

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Propertymark also reported that the average number of views per property fell by 71% between April and December 2022.

However, this does not prevent sellers from putting their property up for sale. Propertymark found that real estate agents have seen a fairly steady stream of available properties throughout 2022, with no year-on-year changes between December 2021 and December 2022.

2022 started as a seller’s market and ended the year as a buyer’s market.

Nathan Emerson, Propertymark

Nathan Emerson, chief executive of Propertymark, said: “The biggest change we’re seeing in the sales market is negotiated prices versus regular asking prices.

“2022 started as a seller’s market and ended the year as a buyer’s market.”

Emerson urged sellers not to pay too much attention to how much other homes in their area are listing for, as those homes may have been delayed on the market or may not have sold at the advertised price.

“The best price is usually reached in the first four to six weeks of marketing, so we encourage sellers not to compare their properties to other homes on the market that may not have sold yet, and to make sure they get an estimate from a qualified and accredited real estate agency. agent, he said.

When will salespeople accept the new reality?

Higher mortgage rates, combined with wider economic uncertainty, have forced many Britons to put on hold their plans to buy a home or move.

According to data from the Bank of England, demand for home mortgages fell sharply in the last three months of last year.

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It turned out that new mortgages for the purchase of real estate fell by 75% compared with the previous three months.

Hungry for buyers, sellers are forced to come to terms with the fact that the price of their home may no longer be worth what it was six months ago.

Mortgage shock: ONS and Bank of England data show rapid rise in mortgage rates over the past year

Mortgage shock: ONS and Bank of England data show rapid rise in mortgage rates over the past year

House price indices are beginning to indicate that prices are changing. Halifax and Nationwide recorded consecutive falls in the final months of last year. However, the data tends to lag behind what is actually happening in real time.

Consequently, it may take time for many sellers to accept the reality of how much their home is currently worth.

Henry Pryor, a professional buying agent, says: “Typically, about 1.2 million homes are sold each year, but I expect to be around 800,000 this year as sellers sit back waiting to see if they can keep the price on. which was calculated. would have received last year.

“The housing market is like a supertanker – it takes a long time to change direction or speed, and most of 2023 will be filled with sellers holding last year’s price before they realize that what they want to move to has just dropped in price. like theirs.

“So, I don’t see a Mexican confrontation yet, but I expect it. At the moment it’s still too early, but by the summer the penny will fall.

“As always, someone will get it earlier, and someone will last until Christmas. Others will hang on too long as some real estate agents try to buy a new business, staying optimistic for longer.”

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How to sell your house in 2023

According to experts, sellers should be careful when evaluating their properties.

It can be tempting to compare what other properties in the area are up for sale, but the advice is to talk to local real estate agents to make sure the home comes on the market at a price that will generate interest and not at a price that is purely speculative. .

“Sellers should listen to the advice of their agents and set prices accordingly,” says Henry Pryor. “The best ones still sell and sell well, but you are likely to be penalized if you are overly ambitious. The price is what you ask. Value is what you get.

He adds: “Sellers should remember that the asking price is not a statement of value. It’s part of marketing to grab the attention of potential buyers.

“Don’t judge an offer by the asking price. If you’re getting more than the asking price, then he’s done a good job.”

Rob Dix, co-founder of the property forum Property Hub, suggests that sellers can be wise to stand firm or delay…