better to buy now (or soonish), than at the bottom of the market

hethmar

I dont believe this is the bottom dope? I reckon another year of drops.

macaque_2

kai666 wrote: »

I think, surely it is better to buy now (or soonish) than at bottom of the market The reasons for this are:

1.There will be lots of demand at or near the bottom, reducing choice and increasing prices as people fight for the bargain they want

2.Currently it is a buyers market. Once the bottom is reached, and more people are out looking, this will swap back to a sellers market, as they realise plenty of other people are also looking around

3.you are more likely to get the house you want now, with fewer people wanting to buy. As the numbers looking increases, the choice will decrease unless you are quick (thus less room to haggle and neogiate)

4. You won't know it's the bottom of the market until it's too late!

anyway thats just my thoughts on why you shouldn't wait till the bottom!

I suspect you are an estate agent so, for the sake of balance I will respond to your points in the same order:

1. The shortage of property to buy in recent years has been linked to people buying multiple properties. There is now an excess of property on the market and the same people are trying to dump their 'portfolios' as fast as possible. The market is now saturated with unwanted property. Given the damage the recent bubble has done we never see buying frenzies again, ever.

2. When hoards of people queue up to sell you £5 notes for £10 each, that does not qualify as a buyers market. Asking prices have remained blissfully detached from reality. Sellers are despately trying to get £400K for properties that may only be worth £150K in 10 years time.

3. On the subject of choice, the lower house prices go, the more (and better) properties there will be in your price range. This is common sense.

4. Too late for what? Too late to cut your hands by trying to catch a falling knife?

kai666

macaque wrote: »

I suspect you are an estate

I'm not, I just thought I would play devils advocate, and post an alternative point of view.

I have absolutely vested interest in whether prices go up, down, or stay the same

Lotus-eater

I think the point is, that you will tend to get a better price on a home when the market is at maximum panic. The question is, do your think the market will panic more or less in the future?
I think more, but if you think less, then yes, its a good time to buy.
We all have to make our own choices about big decisions, we can disagree about what we think, but we can't argue about it, because nobody can be right until it happens.

Really2

Lotus-eater wrote: »

I think the point is, that you will tend to get a better price on a home when the market is at maximum panic. The question is, do your think the market will panic more or less in the future?
I think more, but if you think less, then yes, its a good time to buy.
We all have to make our own choices about big decisions, we can disagree about what we think, but we can't argue about it, because nobody can be right until it happens.

See I disagree on that one I think now you have to rely on forced sellers.

The first 0-12 months was the panic stages (people wanting to STR etc. builders pooping them selves)

I think now most people accept prices are droping and if are looking to move will do so when the market trading better.(obviously not the case if forced)
But that is just my view from selling and buying again in that period.

chewmylegoff

yes, the point is that the best time to buy probably is the time of maximum panic, but it's impossible to tell when the time of maximum panic is until afterwards.

thus if you wait for prices to stop falling and stagnate, you are taking much less of a risk than if you attempt to pick when the best time to buy is and get it wrong. of course there is also the risk that prices will not stagnate for a few years as they have done in previous crashes, but will immediately start shooting up again (rather difficult to believe it might happen at the moment though).

if you decide that now is the best time to buy, but in 12 months time you could have got the same house for 20% less, then clearly now was not the best time to buy.

my view is that it's better to be risk adverse with these things, unless you can really afford to lose a lot of money without even noticing it, in which case you won't really care that the price is dropping anyway so it will be a non factor for you.

Really2

chewmylegoff wrote: »

my view is that it's better to be risk adverse with these things, unless you can really afford to lose a lot of money without even noticing it, in which case you won't really care that the price is dropping anyway so it will be a non factor for you.

I agree with everything you say accept that bit. It depends on the type of person you are (I am impatient but took a calculated risk I think).
I took the risk of 30% drops but if it goes below i am happy with what i did and the low IR will almost certainly give me possibly an extra 10%ish breathing space than buying at the bottom (providing the bottom is not another XX%;) )

Lotus-eater

Really2 wrote: »

See I disagree on that one I think now you have to rely on forced sellers.

Yes that's one thing I didn't think of, as with most things, you do your research, then end up being in the right place at the right time.

Personally I've always done what CMLO advocates, waiting until the market has settled and turned, you lose a little, but you risk not a lot.

Really2

Lotus-eater wrote: »

Yes that's one thing I didn't think of, as with most things, you do your research, then end up being in the right place at the right time.

Personally I've always done what CMLO advocates, waiting until the market has settled and turned, you lose a little, but you risk not a lot.

I go on my situation, reaserch then gut. (lucky my gut is big enough to take a wrong decision)
But so far in life it as done me well. But my gut is now telling me i do to much posting on MSE so think I may have to limit my use to a couple of days each month.;)

JayScottGreenspan

purch wrote: »

Personally I'd rather buy (anything) 10% above the bottom in the way up, rather than 10% above the bottom on the way down !!!

A very good point, IMO.