House Prices

tara747

Congrats Darcy, good luck xo

bingobangobongo

Folks I am looking at a detached house which is a new build (1400 sq ft) - since this is a new build how can I best determine a suitable price for it? I would look at the rateable value for the house but since it is new there is no records as you know they are from 2005.
Its about 6 miles from Belfast and the are looking £230,000 for it - I know location is a big factor but this seems too dear to me..

x12yhp

Are there no other properties in the area upon which you could judge? Without knowing quite a bit more, it would be very hard to comment....

bingobangobongo

I guess this would be a similar house - how much do you reckon would be a reasonable price for this kind of house in this area:

http://www.propertynews.com/brochure.php?p=PNC503944&d=1817

x12yhp

Please realise that anything I say on this is tainted with my own bias!

The first thing is that the location is OK but it certainly would not warrant any premium. The property itself looks really quite nice and good and spacious. It would thus be a family type property and would presumably be priced accordingly. I would have guessed in the region of 200k with that considered but I would always push on the low side so I would probably be offering 180k and working from there. Now what I would further guess is that the property will actually be somewhat above this... I would not be surprised if this could have been a 300k+ property when the world went mad.

Another way to look at it might be affordability. Assuming it a starter family home, you have a couple, presumably with small kids and presumably having had a previous property. Assuming they made money on their previous (which is far from certain!) then maybe they might have £50k for deposit. Assuming we have a male working FT and on a decent wage, perhaps 30k and a wife who does PT with kiddy duties earning 15k then we have 45k annual. Taking a 3.5x multiple on combined (which I think to still be generous, given the times we live in), that gives £157.5k and a total of less than £210k. This is not a million miles from my previous guess so I would set this as an upper limit.

Now.... out of interest.... do you know how much that property actually costs?! I am intrigued to know how close my guesses are!!

x12yhp

I was talking with a friend and we have the following:

http://www.propertynews.com/brochure.php?p=PNC503887&d=1817&r=

It is a semi and smaller.... but at £163k it gives an idea.

Then we have:

http://www.propertynews.com/brochure.php?p=PNC503900&d=1817&r=

Which looks very similar to the initial. According to propertybee it was £225k before it changed to POA which implies to me a reduction. So I think this fits well with a guess of £200k.

bingobangobongo

x12yhp - they are still looking £225k for that house, in fact they will be looking more since it is a showhouse and comes furnished.

Way too much I think.

x12yhp

Definitely bingobangobongo! This winter may be tough for many!

steveymp

House prices are ever so slowly coming down, mainly due to a stagnant market, prices are now coming to within 10 to 20 thousand of their rates value. They will be at or lower than that value before this slump has ended:o but thats just my opinion;)

I would love to move but can't sell mine at present, it is priced above the rates value of the house, but others I am interested in are still priced way above the rates value so its a real catch 22 situation. Estate agent has advised that if in no desperate need to move (which I'm not) then don't lower your price until you have too.

More and more Repo houses appearing on the market but they are not interested in chain buyers:o The buy to let market crowd are still getting them for very nice prices:(

x12yhp

As steve says, everything has stagnated. The low IRs mean that the mortgage costs are so low that people can better afford to pay it than to move on. As I see it, the most likely future is that IRs are forced to rise to curb the flow of money such that we do not get big inflation. If the housing market has not corrected by then, all these people who have stayed put will, overnight, be forced to sell and that could be the massive market crash that many have predicted.

In honesty though, I have little idea what will actually happen. All I can be confident in is that rates will not be this low forever.