House Prices

motorguy

leftieM wrote: »

There is no price transparency so it's really hard to tell how far prices have fallen. Many sellers are like pgilc. They want more for their house than anyone is willing to pay so you have an impasse. Seller sits with unsold house for months/ years and buyers sit in rented houses/at home with parents.

When a house comes on the market at a price that undercuts the stubborn neighbour and sells quickly that is usually the end of the wannabe vendor's fantasy. A house on my street sold in a week for less than 200k. I guess it would have sold for 350k (based on its published capital value of 170k) at the height of the madness. That has set a new price for the street for valuers. Sellers will have to price their houses in relation to that house to have a hope of selling to anyone requiring a mortgage.

Yup, thats exactly it.

With us, once we'd talked to a couple of estate agents we got a clear picture of what we would need to price it at to 'get it away'.

We simply didnt put it on the market rather than stick it on at maybe £145 to have some wannabe investor offer '£120K for it mate because its a buyers market'.

We'll sit tight. If we sell it in say three years time for £165K, then thats £20K less we'll have to pay off on the mortgage on the new one. Well worth the wait methinks. If it isnt worth that, we'll shuffle our finances around to keep it on as a rental.

metalgal

We got our house in April 2007 the peak of the boom with a mortgage for £113,000. Our house was valued at the time at £180,000. Thank god we didn't get more. Now according to the mortgage company our house is worth 97.5k that makes me want to cry, mainly because i hate my house and want to move so much. I hate the fact that im going to be stuck here for a good few years to even get it up to the mortgage level. House prices are far far too high but if there were to drop so that 1st timers could get one then no one would be able to move cos they would be in so much negative equity so there would be no houses to buy

x12yhp

Something that people have failed to think about is the impact of what has happened over the last year. The system was propped up with huge amounts of 'new' money. The reason for this was because the velocity of the present money was basically zero. By introducing more, they hope to set up a gradient which gets the money flowing. That is all well and good but only half the story. We now have a much larger amount of money starting to move and that gives a momentum problem - even a small velocity now comprises a large momentum. So there is a VERY fine balance to be met. The goverment will have to manipulate the system so that it does not all get moving too quickly because then they cant stop it. So interest rates will rise and will have to do so more sharply than without the QE. If things go badly, you must figure on IRs rising very sharply to head off major inflation.

So holding off on a sale is all right if you don't owe anything on it. But, if you owe money, be aware that there is a reasonable chance that you will have to pay more to service it and buyers will drop their prices, not raise them.

The summary is exactly the same as before. The safe bet is taking the money now. A couple of years ago, the majority rolled the dice and lost. Are you a gambler? Ask yourself whether the potential gain is enough to warrant living with the potential loss?

motorguy

x12yhp wrote: »

The summary is exactly the same as before. The safe bet is taking the money now. A couple of years ago, the majority rolled the dice and lost. Are you a gambler? Ask yourself whether the potential gain is enough to warrant living with the potential loss?

Loss is something that happens when you sell and profit / loss = sale price - outstanding mortgage. If we dont sell, then we dont make a loss.

I think we will aim to hold onto it indefinitely until the market recovers a bit. Our mortgage is nowhere near what even the current value of the house is, so i'm not unduely concerned. We could also convert to a repayment only mortgage for a couple of years to get the payments down further, if needs be.

The biggest issue at the moment - and this came from several mortgage advisors and estate agents - is that first time buyers cant get mortgages without a large deposit. That grip on the market seems to be releasing slowly though - there seems to be some movement in town houses / semis, yes, but not enough yet to kick start the market further up.

A couple of things though - i dont see a mass exodus from the market of those property owners who rent out long term (and i'm not talking about the amateurs who maybe bought one house a couple of years ago after watching too much Property Ladder), therefore there must be a thinking from them of if you're in, stay in. Secondly, there is movement in the lower market in our area - semis and town houses seem to be selling albeit not 'flying off the shelves', therefore that would imply the market has bottomed out and we are seeing a little of the recover the property articles are talking about. Once confidence increases, we may well see an increase further up the chain.

Time will tell i guess, but as i've said previously, but i dont *have* to sell it to finance our new build, therefore i wont.

warmhands.coldheart

I do think however that if the "supposed" BIG CUTS in the Civil Service/Public Sector are implimented as reported, Northern Ireland will be hit exponentially due to the high level of Public Sector employment. This will undoubtedly have a negative effect on property prices I would have thought

gibbyni

I have to agree with pgilc1, if I was in a position where the property wasn't costing me money or very little money, then yes it makes sense to hold onto it if there is nothing forcing a sale. Any type of investment has a risk, the longer the property is kept then risk is spread. Agreed prices could well fall more or be stagnant for the foreseeable future, but as its long-term this shouldn't effect the decision to sell.

tara747

pgilc1 wrote: »

Whats with the condescending 'my friend'?

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pgilc1 wrote: »

Yup, thats exactly it.

With us, once we'd talked to a couple of estate agents we got a clear picture of what we would need to price it at to 'get it away'.

We simply didnt put it on the market rather than stick it on at maybe £145 to have some wannabe investor offer '£120K for it mate because its a buyers market'.

We'll sit tight. If we sell it in say three years time for £165K, then thats £20K less we'll have to pay off on the mortgage on the new one. Well worth the wait methinks. If it isnt worth that, we'll shuffle our finances around to keep it on as a rental.

Imaginary £20k increase / 3 years = £6.7k per year = £558 per month. Is it really worth your while to keep servicing this mortgage PLUS rates, insurance etc for 3 years for the sake of a *possible* increase in value? There are a lot of 'what ifs' at the minute.

But you say that you'd 'happily keep the house indefinitely', so I guess things have worked out really well for you.

FWIW, I think house prices are going to fall much further here. They've collapsed even with low IRs, QE, a cushioned public sector etc. Now that the Tories are in and an emergency budget is due in 7 weeks, watch out. :eek: I will be sitting this one out, as will all the potential FTBs I know.

p.s. hope you don't think this is condescending (it's not meant that way) but :eek: at a house going for £280k in Waringstown. Who on earth has the sort of money to buy that? But it's not just Waringstown, all of NI has been stupidly overpriced for the last few years.

motorguy

tara747 wrote: »

??



Imaginary £20k increase / 3 years = £6.7k per year = £558 per month. Is it really worth your while to keep servicing this mortgage PLUS rates, insurance etc for 3 years for the sake of a *possible* increase in value? There are a lot of 'what ifs' at the minute.

Well £500 a month is a VERY nice amount - unless its peanuts to you. Also if we do get the £20K lift, then thats £20K we will knock off our new mortgage, which, as you know, would otherwise cost us around £40K to pay back over the term.

Well worthwhile methinks.

tara747 wrote: »

But you say that you'd 'happily keep the house indefinitely', so I guess things have worked out really well for you.

FWIW, I think house prices are going to fall much further here. They've collapsed even with low IRs, QE, a cushioned public sector etc. Now that the Tories are in and an emergency budget is due in 7 weeks, watch out. :eek: I will be sitting this one out, as will all the potential FTBs I know.

p.s. hope you don't think this is condescending (it's not meant that way) but :eek: at a house going for £280k in Waringstown. Who on earth has the sort of money to buy that? But it's not just Waringstown, all of NI has been stupidly overpriced for the last few years.

I think they have a fine balancing act to perform in reducing the deficit yet not forcing the economy back into recession - that would be in noones interests

When the market was at its peak, yes, thats the sort of money involved. Were they worth it? No. Were house prices over NI worth it? No.

warmhands.coldheart

The sooner people see house as a HOME and not some sort of investment/money making opportunity... the better

mypie

pgilc1 wrote: »

The biggest issue at the moment - and this came from several mortgage advisors and estate agents - is that first time buyers cant get mortgages without a large deposit.

QUOTE]

I thought this too. We have managed to get 95% mortgage on a repayment 5 year fixed rate of 4.2% and we are first time buyers. I am all new to this mortgage stuff but it works for us.