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It was easy to make a mistake last year and many people did when it came to quoting a sensible and realistic guide price. I'm not saying it was easy - there is always the concern that you could ask too little but there's a knack to pricing a property in a falling market.
So many people either ignored the advice they were given or followed what they wanted to hear and appointed an estate agent who was out of touch with the market. As I have said before, your agent has to be over 35 to have worked in a property recession before.
We know that the number of properties being rented out has grown by nearly 56% in the past three months and with less than half the number of houses selling compared to 2007, values are falling like a stone. Over 6,000 people every week having to reduce the asking price of their property.
The market has officially fallen by around 16% in 2008 although agents would say that in many places, for those who have actually sold, the fall has been nearer 25%! With fewer than one in seven homes selling, many have had to reduce the optimistic price they originally quoted.
75,000 repossessions this year
I expect repossessions to rise to around 75,000 this year which will make up around 10% of all homes sold and whilst these sales are not included in the Land Registry figures, if they were, I would expect the Land Registry index itself to fall by another 20% in 2009.
An extreme example that illustrates that even the rich can get it wrong is Ancaster Lodge in Richmond being sold by Foxtons and which has just had a cool £6m trimmed from the original guide price of £20m quoted last year.
The price reduction may be extreme but even those at the top of the market have found that it's easy to get your asking price wrong.
Ancaster Lodge has five bedroom, four bath rooms, an indoor pool and separate studio. Off-street parking is a big plus in London of course but hasn¢t been enough of a draw to pull in a punter willing to spend £20 long ones!
Don't be greedy
The moral of the story is 'price ahead of the curve'. Buyers won't take an optimist seriously so set your guide price with care. It may be painful to realise that your home is no longer worth what you had hoped but if you are buying and selling in the same market it makes little difference since what you buy will be similarly effected.
As long as there are people who refuse to accept that the world has changed, the housing market will remain choked, with few sales and those that are made, being sold at fire-sale prices
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