My dream house...

Cleaver

Jimmy_31 wrote: »

I think you know exactly what everyone means when they say overpriced, when i say it i mean it is overpriced because of the massive boom we have been through, if the boom hadnt happened then that house would not have an asking price of 750k and the boom happened because of irresponsible lending by the banks so to me these asking prices we see today are just boom prices so to me they are overpriced.

I agree with everything you say, pretty much. The boom happened and many factors in the market meant house prices rose and rose and rose. We could list those factors, but I think we all know them. You've listed one of them above which was additional lending.

However, this doesn't mean prices now are 'overpriced'. Prices now are prices now. That's what they're worth. So if a house down your street sells for £150k tomorrow, that's its market value. If the market comes down and down over the next two years and that same house sells for £90k in 2013 then that's exactly what that house is worth then. That doesn't mean it is 'overpriced' now, it's worth £150k. And then in 2013 it's worth £90k. You see what I mean? There is no overpriced or underpriced, there's just assets being sold at market value with buyers and sellers deciding that market value. If less and less buyers choose to buy at lower and lower prices, and sellers accept these prices, then the value of those assets fall. This is, very simply, how a market works. There's no overpriced or underpriced, just a market price and perceived value.

Jimmy_31 wrote: »

You talk about worth, people are paying 200k,300k for a 2 bed terrace in certain parts of the country, yes thats the price tag but no 2 bed terrace will ever be worth 200k to me so in my opinion its overpriced.

You're getting confused again Jimmy, and you don't need to, as this is really simple. A 2 bed terrace is worth what a buyer and seller agree it's worth. Let's say that's £200k and you feel that that is a stupid price, as you woudn't want to pay more than £140k. We now have two figures for that house:

1) The market value of that house is £200k.
2) The price Jimmy feels that the house is worth to him is £140k. But that doesn't matter, as we have buyers and sellers in the market willing to trade that asset at £200k.

Those are two different things. For example, I could say that I would only be willing to buy Lloyds shares for 30p, as that represents value for me. That's fine, as it's my opinion, but 100 million Lloyds shares were traded today all at around 54p. So Lloyds shares are 'worth', or have a market value of 54p. That fact that I think they are overpriced at 54p and have an opinion that they're only worth 30p to me is a completely different thing.

Jimmy_31 wrote: »

Im going to carry on using the term overpriced so if you feel the need to correct me then dont bother because you are getting quite boring now.

Fair enough. It's an open forum, so if you want to use the wrong terms to describe things then that's up to you.

Cleaver

Jimmy_31 wrote: »

I know i have asked you this before but are you sure you are not a teacher.

I find it complimentary that you're learning something from me Jimmy but no, I'm not a teacher. You'd need to treble teacher's pay before I'd get in a classroom with 30 teenagers. I have a lot of respect for teachers for that reason.

By the way, just asking whether I'm a teacher isn't really a response to the argument. And please start using a capital 'I' when referring to yourself Jimmy, we have been through this before.

Cleaver

GDB2222 wrote: »

I don't think it's worth arguing that current prices are not the market values. They clearly are, as plenty of transactions are taking place at these prices. Your real point, it seems to me, is that we are still in a bubble that has not burst. I agree with you.

For what it's worth (no pun intended) I agree with you too. I think prices will fall over the next few years and that the market is being somewhat 'propped up'. It's clearly not a healthy market and, whilst I'm not positive it'll fall, I'd much prefer to bet on falls rather than rises if pushed. So we're probably saying the same thing.

But the fact is that if a house tomorrow sells for £200k, it's current market price is £200k. The fact that Jimmy wouldn't only be willing to pay £140k for it doesn't mean it's 'overpriced', it means that Jimmy is not willing to pay market price for an asset. That may obviously be a very smart move, because the market price for that asset could possibly be £140k within a few years. It could be £220k in a few years. No one knows for sure with markets as there are too many factors to try and second guess.

silvercar

neverdespairgirl wrote: »

these are rather nice, too, not far from Sibley's place:

http://www.rightmove.co.uk/property-for-sale/property-18457410.html

http://www.rightmove.co.uk/property-for-sale/property-17480343.html

The first was is overdressed and the second is only half dressed.

lostinrates

neverdespairgirl wrote: »

Doesn't look dark to me, particularly!


I really don't think you can look at a pic of a hosue and assume a high flood risk! It's not as if the whole of Kent just floods regularly.

I like wild swimming so being near a decent size stream/small river would be a positive bonus for me (If its knee deep I can enjoy it the deeper the better though) Flood risk is of course important but there are other reasons to want to be near water.

Jimmy_31

Cleaver wrote: »

I agree with everything you say, pretty much. The boom happened and many factors in the market meant house prices rose and rose and rose. We could list those factors, but I think we all know them. You've listed one of them above which was additional lending.

However, this doesn't mean prices now are 'overpriced'. Prices now are prices now. That's what they're worth. So if a house down your street sells for £150k tomorrow, that's its market value. If the market comes down and down over the next two years and that same house sells for £90k in 2013 then that's exactly what that house is worth then. That doesn't mean it is 'overpriced' now, it's worth £150k. And then in 2013 it's worth £90k. You see what I mean? There is no overpriced or underpriced, there's just assets being sold at market value with buyers and sellers deciding that market value. If less and less buyers choose to buy at lower and lower prices, and sellers accept these prices, then the value of those assets fall. This is, very simply, how a market works. There's no overpriced or underpriced, just a market price and perceived value.



You're getting confused again Jimmy, and you don't need to, as this is really simple. A 2 bed terrace is worth what a buyer and seller agree it's worth. Let's say that's £200k and you feel that that is a stupid price, as you woudn't want to pay more than £140k. We now have two figures for that house:

1) The market value of that house is £200k.
2) The price Jimmy feels that the house is worth to him is £140k. But that doesn't matter, as we have buyers and sellers in the market willing to trade that asset at £200k.

Those are two different things. For example, I could say that I would only be willing to buy Lloyds shares for 30p, as that represents value for me. That's fine, as it's my opinion, but 100 million Lloyds shares were traded today all at around 54p. So Lloyds shares are 'worth', or have a market value of 54p. That fact that I think they are overpriced at 54p and have an opinion that they're only worth 30p to me is a completely different thing.



Fair enough. It's an open forum, so if you want to use the wrong terms to describe things then that's up to you.

I said this.....You talk about worth, people are paying 200k,300k for a 2 bed terrace in certain parts of the country, yes thats the price tag but no 2 bed terrace will ever be worth 200k to me so in my opinion its overpriced.

Then you said.....Those are two different things. For example, I could say that I would only be willing to buy Lloyds shares for 30p, as that represents value for me. That's fine, as it's my opinion, but 100 million Lloyds shares were traded today all at around 54p. So Lloyds shares are 'worth', or have a market value of 54p. That fact that I think they are overpriced at 54p and have an opinion that they're only worth 30p to me is a completely different thing.

So what is the problem with me saying sibleys dream house is overpriced, im just expressing my opinion.

That's fine, as it's my opinion......(your words)
That house is overpriced.........(my words, my opinion)


Are you saying i should have said, IN MY OPINION that house is overpriced.

Cleaver

Jimmy_31 wrote: »

I said this.....You talk about worth, people are paying 200k,300k for a 2 bed terrace in certain parts of the country, yes thats the price tag but no 2 bed terrace will ever be worth 200k to me so in my opinion its overpriced.

<sigh>

Sorry Jimmy, but it isn't overpriced. It's worth £200k, or whatever it sold for. You just have an opinion it's overpriced, but it isn't.

Jimmy_31 wrote: »

So what is the problem with me saying sibleys dream house is overpriced, im just expressing my opinion.

Well, we don't know the value of the house yet as it hasn't sold. What you mean is that you wouldn't be willing to buy the house for £750,000 as you feel that that is too expensive for that asset. If everyone agrees with you, the seller may be forced to reduce the price to £700k, then maybe £600k and it eventually sells for £570k. If that's the case then the house is worth £570k.

That's fine, as it's my opinion......(your words)
That house is overpriced.........(my words, my opinion)

Jimmy_31 wrote: »

Are you saying i should have said, IN MY OPINION that house is overpriced.

Yeah, that's closer. The house is worth what it sells for, but you wouldn't be willing to pay £750,000 for it. Of course, if two people tomorrow both put bids in at £750,000 and it sells for that then it's worth that. So it isn't 'overpriced', that's what it's worth. If it sells for £570k, then that's what it's worth.

What you're basically saying is that you aren't willing to pay £750,000 for that house. Which is fine. I wouldn't pay anywhere near £750,000 for it either. But we won't know the actual market value of this house until it sells. The fact that it's onsale for £750,000 tells me that it's probably somewhere close to that though, but we'll see.

ukcarper

Jimmy_31 wrote: »

After sibleys dream house was built but before he got the free car.

Yea property was a lot cheaper in the 19th century.

Jimmy_31

Well look back at them last few posts you have made cleaver and see if you think it was worth it.

IN MY OPINION it wasnt.

The only thing im learning from you is that you dont half bang on to try and prove you are right, whats the word im looking for, oh yes pedantic.

Please dont reply to this post with one of your many examples, the tulip one was boring enough.

AND SIBLEYS DREAM HOUSE IS OVERPRICED.

Cleaver

Jimmy_31 wrote: »

AND SIBLEYS DREAM HOUSE IS OVERPRICED.

Well, we don't actually know that until it sells. It might sell for £800k of course, in which case you could argue that the current valuation of £750,000 that's been put on the house is lower than the actual market value. I personally woudn't be willing to pay anywhere near £750,000 for that house, but that's just me.

I'm sitting here watching Forest vs Swansea on the TV Jimmy until picking up my missus from town, so I'm happy to keep this up if you are?