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Nervous Sellers Fold Quickly In The Fear Of Flopping At Auctions, And Agents Grab Whatever They Can Get

A report from ABC News in Australia. “There has been a dramatic increase in how long it is taking to sell properties over the past year. Pat and Shirley Tucker have put their four-bedroom home in Melbourne’s eastern suburbs on the market. They want to sell so they can downsize for their retirement. ‘We’ve had to temper our prices,’ Ms Tucker told 7.30. ‘ We genuinely want to sell the place but we don’t want to give it away.'”

“Their real estate agent David Fileccia said the Tuckers’ home would have sold quickly for a premium in previous years. ‘There’s a lot of negativity. So buyers will buy into that, and sentiment and confidence is everything in real estate,’ he said.”

“Haig Abraham also knows the frustration of selling in a falling market. The house in Sydney’s western suburbs has been on the market for six months and Mr Abraham has lowered the price significantly, but is still trying to find a buyer.”

“‘We’ve actually recently bought a property elsewhere. And we need to offload this one to just take a bit of the pressure off,’ he said. He is still upbeat about finding a buyer soon, but does not want to get trapped if the market continues to fall.”

“‘I guess everyone’s worried, especially people who are selling,’ he said. ‘We don’t want to be caught up in that where, you’re going to have the house for sale for another year or six months and then lose more.'”

The Australian Financial Review. “Sydney clocked up its highest number of scheduled weekend auctions so far this year at 795 but at the Saturday morning auction of a Lane Cove apartment in Sydney’s north, the mood was flat. The owners of the 25/482 Pacific Highway apartment planned to sell for $700,000 when the property went on the market 33 days ago.”

“But on Saturday morning their expectations had dropped. They were hoping for anything around $610,000. The auctioneer mustered a final ‘hard sell’ pitch before opening the bids. He asked for an opening bid, but no one took the bait. Pointing to a man on the balcony, he asked if he wanted to start at $600,000 who said he had to speak to his wife.”

“Unlike the days of frenzied auctions a few years ago, this auction of a home – in this case just right for a first-home buyer – ended with a whimper even after the auctioneer gave buyers an upper hand with a vendor bid of $580,000.”

“Private treaty sales are on the rise as nervous sellers fold quickly in the fear of flopping at auctions – a common occurrence in today’s downturn market – and agents grab whatever they can get.”

The Herald Sun. “Melbourne suburbs where house prices have plunged as much as $480,000 have been tipped to look like bargains in five years, making them prime targets for buyers now. The median house prices in St Kilda, Clayton and Mordialloc have already fallen between $162,750 and $479,500 over the past year, according to CoreLogic records — and they could slide further.”

“Suburbanite director Anna Porter said a five-year timeline would suit many Melbourne families who shouldn’t be looking to get rich quick right now. ‘These are suburbs I would just plain avoid if you are looking for a short-term gain,’ Ms Porter said. ‘It’s a short-term hit for long-term gain.'”

From Nine Finance. “As property prices rocketed toward the heady peak of Sydney’s real-estate boom in 2017, the bulldozers came to Epping. Many units were sold off-the-plan to Chinese investors drawn by the location’s reputation as a Chinese community hub and its highly-regarded schools.”

“But prices are now in freefall, and the suburb is being refashioned once more, this time into the epicentre of a bust. As buyers disappear and miss settlement payments, some projects are sinking under their debts.”

“Once the sales rates and pricing dropped, it just couldn’t service all of its commitments,’ said Philip Campbell-Wilson, who is liquidating one such new development, Gondon’s Elysee Epping.”

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This Post Has 35 Comments

  1. ‘I guess everyone’s worried, especially people who are selling’

    Strangely, I’m not worried at all Haig. Maybe there’s something I’m missing.

    ‘We don’t want to be caught up in that where, you’re going to have the house for sale for another year or six months and then lose more’

    Now I see.

      1. In other words, If she’s not gonna see six figures or a substantial profit, she would be “giving it away”… have fun chasing the market down Shirley especially with that 2nd property you decided you “needed” to add to your portfolio. Hope you got in on some of this only goes up forever stawk market too, that will be your fall back in case your RE investments don’t pan out.

  2. ‘As property prices rocketed toward the heady peak of Sydney’s real-estate boom in 2017…Many units were sold off-the-plan to Chinese investors…But prices are now in freefall, and the suburb is being refashioned once more, this time into the epicentre of a bust’

    Huh, I said this Chinese investor thing would be a disaster. Guess I was right.

  3. The years biggest thriller “Downward Spiral” dominating the ratings in Australia will be coming to a theaters in the US soon.

    Get your tickets and popcorn now!

  5. From the first URL: “One of the primary factors is access to credit is now much harder, particularly for investors,” Mr Lawless said.

    I always thought “investors” had money. Silly me! 🙂

  6. “Suburbanite director Anna Porter said a five-year timeline would suit many Melbourne families who shouldn’t be looking to get rich quick right now. ‘These are suburbs I would just plain avoid if you are looking for a short-term gain,’ Ms Porter said. ‘It’s a short-term hit for long-term gain.’”

    These people can’t even learn during the middle of a bust. Prices are dropping like crazy and she’s telling people to just wait and they can get rich quick later. Yeah or probably never.

    1. i cannot believe the fiduciary irresponsibility. Where are the accountants/auditors/lawyers

      Or is this a gigantic game ….

      No wonder people dont care and want socialism

    2. “The bubble burst tends to follow a symmetrical reversal of very similar time durations and magnitudes as the initial rise.”

      I’m inclined to think (perhaps just wishfully thinking?) that the SALT and MID caps will accelerate these. Doesn’t the symmetrical reversal assume that the variables during the rise remain the same through the reversal? The SALT and MID caps changed two of those variables.

      1. “I’m inclined to think (perhaps just wishfully thinking?) that the SALT and MID caps will accelerate these.”

        I agree these should speed up the decline UNLESS another factor or factors counteract such as more QE / lower IRs. Seems that those cards have already been played though so my take is this one will be more accelerated.

    4. Great article. He basically covers it in the first line:

      “Unless the Fed is going to start buying millions of homes outright…”

      We can all scoff. But that would fit perfectly with the choices they’ve made so far each time we could have taken our medicine in the past. Now I wouldn’t expect them to just put up a “we buy houses at the Federal Reserve store” ad, I would expect it to go through multiple layers of middle men. But if that’s what it takes to save People Who Matter from losing their fortunes then it’s exactly what I expect to happen somehow. I still hope somehow to be wrong.

      1. exactly what I expect to happen

        The Fed never bought houses last go round. They saved their bankers by buying the MBS paper.

        1. Last time that was enough. But if the paper stops working…something has to maintain the book value until the loss can be put onto the taxpayers.

    5. I agree wholeheartedly with this snippet from the article:

      “Buying up $1 trillion in sketchy mortgages worked in 2009 because it bailed out everyone who was at risk of absorbing huge losses as a percentage of those mortgages defaulted. The problem now isn’t one of liquidity or iffy mortgages: it’s the generation that would like to buy homes finds they don’t earn enough, and their incomes are not secure enough, to gamble everything on an overpriced house that chains them to a local economy they might want to leave if opportunities arise elsewhere.”

      1. Bailing out current owners of bubble-valued houses in 2009 bigly screwed over the next generation of potential homeowners.

  10. “But prices are now in freefall, and the suburb is being refashioned once more, this time into the epicentre of a bust. As buyers disappear and miss settlement payments, some projects are sinking under their debts.”

    Are the Chinese investors engaged in panic buying, or HODLing until prices come back? Enquiring minds want to know.

    1. Did you mean panic selling? So far I’m not seeing Chinese buyers selling in the Sacramento area so far. They seem to be mostly middle class people who bought for the schools and to get money out of China and I’m guessing they will ride it down. If all else fails most could go back to China if creditors here got too demanding.

  11. I ran across this …

    Seniors are to blame for housing shortage, study finds – MarketWatch
    https://www.marketwatch.com/story/seniors-are-to-blame-for-housing-shortage-study-finds-2019-02-06

    “Millions of senior citizens are staying in their homes longer than their predecessors in earlier generations, keeping homes off the market and making it more difficult for younger Americans to break into ownership.

    “According to an analysis from economists at Freddie Mac, 1.1 million homes have been ‘held off the market’ by owners born between 1931 and 1941, and another 300,000 by those born between 1942 and 1947.”

  12. “Unlike the days of frenzied auctions a few years ago, this auction of a home – in this case just right for a first-home buyer – ended with a whimper even after the auctioneer gave buyers an upper hand with a vendor bid of $580,000.”,/em>

    Leave it to the REIC media shills to say a massively overpriced shack – even selling at a discount to prior years’ bubble pricing – is “just right for a first-home buyer.” No overpriced shack is ever right for any prudent buyer, especially someone just starting their professional career or a family.

    1. If done right, congestion taxation could be very beneficial to society. Of course, governments aren’t exactly known for creating tax systems that optimize social benefits…

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