FT - (Auctions) Fears of fresh house price weakness

Generali

sabretoothtigger wrote: »

Is it not possible to buy at auction with a mortgage, just harder I guess

I guess there's a risk that the mortgage valuation will be less than your bid and you won't be able to afford to make up the difference. You could always get a valuation done before the auction (at a small cost) which would eliminate that risk.

Thrugelmir

sabretoothtigger wrote: »

Is it not possible to buy at auction with a mortgage, just harder I guess

Would you go to the cost of arranging a mortgage , having a house surveyed and not placing a winning bid?

10% is payable on the day of the auction. Lost if completion doesnt take place in 28 days.

Many didnt arrange mortgages before hand in the boom times. Bought first. Arranged finance afterwards. The lenders have gone. So no longer possible.

carolt

HAMISH_MCTAVISH wrote: »

Class 5. fool
Anyone deluded enough to believe 70% falls are remotely possible.

Actually, that's beyond a fool, that's the clinical definition of insane.

The best part of the recovery will be watching the slow, sickening, realisation that fools like this will endure as prices inevitably rise, crushing the last vestiges of hope for them slowly and surely, and guaranteeing a lifetime doomed to rent slavery as they miss the bottom by years. And all because they listened to some other fool on the internet who told them 70% falls were possible and this was just a "bulltrap".

Happy days are ahead for sure.....:D

Is that really the 'best part of the recovery'?

It's not, say, watching other people get jobs, watching one's own lifestyle improve, watching one's country become wealthier and one's fellow countrymen becoming wealthier and happier?

Are you really someone whose greatest happiness is derived from watching other people 'having the last vestiges of hope crushed for them slowly and surely' :eek: , and 'guaranteed a lifetime doomed to rent slavery'?

Is this REALLY what you have to look forward to??


Some people are just really, really strange.......

Harry_Powell

carolt wrote: »

Is that really the 'best part of the recovery'?

It's not, say, watching other people get jobs, watching one's own lifestyle improve, watching one's country become wealthier and one's fellow countrymen becoming wealthier and happier?

Are you really someone whose greatest happiness is derived from watching other people 'having the last vestiges of hope crushed for them slowly and surely' :eek: , and 'guaranteed a lifetime doomed to rent slavery'?

Is this REALLY what you have to look forward to??


Some people are just really, really strange.......

Well said carolt.

martin8_2

Another article by the FT but in its FTAdvisor section about auction sales analysis:

FTAdvisor - Recent house price rises may not be sustained - 26/08/09

.....................SNIP.....................

Now, figures from Allsop’s latest auction in July, suggest the average price of a residential property achieved that month fell 43 per cent compared with its peak in September 2007.

In June, around 30 per cent of properties sold at auction were 35 per cent below their level at September 2007 and in July that proportion rose to 44 per cent.

According to Capital Economics, which analysed the data, the deterioration between June and July may simply be a "summer lull", but it could also be a signal that a period of renewed weakness in the housing market is on its way.
Seema Shah, property economist, explained: "As the transaction process at auction is so much quicker than selling property using more conventional methods, prices of property sold at auction may give us a better insight than house price indices into the level of prices which is required to clear the market today."

According to Shah, auctions tend to attract properties that owners are finding difficult to sell, are in a poor state of repair or are possessed, and as such the prices tend to be lower than prices in the wider market.

As a result, Capital Economics factors in a average discount on the price of property sold at auction of around 10 to 20 per cent.

Shah added: "It is not difficult to explain why the improvement in housing market conditions may only be temporary.

"Not only is the economic backdrop still weak, with the rise in unemployment showing little sign of coming to an end, but lending criteria remain a significant obstacle to buyers.

"We suspect that the recent recovery in house prices may not be sustained for too much longer."