Home buyers: be very careful!

carolt

Thought some of you would enjoy some of today's headlines on the subject:

http://www.ft.com/cms/s/0/bce7a596-7382-11dc-abf0-0000779fd2ac.html

http://business.timesonline.co.uk/tol/business/money/article2597591.ece

http://money.guardian.co.uk/property/movinghome/story/0,,2184618,00.html

wayoflife

Estate Agents have a large part in this,

They hype up the prices with no justification I have experienced this first hand. As with everything people will get sucked in and pay over the odds

I will say though that this can only happen for so long, as the prices go up unless there is a massive increase in wages people will not be able to afford anything and the prices will go down and by alot

guppy

Generali wrote: »

Entrepreneurs are driven out of the NE by Govt money. What's the point in taking the risk of working for a low wage in a job with a possible (good?) future when you can earn more to sit on your aarrse and earn sick benefit or work for the civil service for rather more in a job that'll never take you anywhere?

Are you suggesting that if we just stop paying them, people on the dole or in public sector jobs will somehow become like Richard Branson or Duncan Bannatyne and the NE will turn in to a thriving business centre?

Its a nice idea, but I fear some of them might turn to more dubious forms of entrepreneurship.

macaque_2

wayoflife wrote: »

Estate Agents have a large part in this,

They hype up the prices with no justification I have experienced this first hand. As with everything people will get sucked in and pay over the odds

I will say though that this can only happen for so long, as the prices go up unless there is a massive increase in wages people will not be able to afford anything and the prices will go down and by alot

Very true. What puzzles me is at what point will sentiment change and reality kick in. Has it happened or do we need to go further into the swamp before people start to look at things more objectively.

guppy

macaque wrote: »

Very true. What puzzles me is at what point will sentiment change and reality kick in. Has it happened or do we need to go further into the swamp before people start to look at things more objectively.

I'm not going to offer my half-baked theories on this, though from last time round its apparent most people will cling on until they are forced to sell. Takes a brave person to sell up and rent before its too late.

If you haven't already done so, take a look at the newspaper headlines from 1989 on the HPC site. Agents, newspapers and the City were all talking up the market even while prices had just stepped off the edge of a cliff.

http://www.housepricecrash.co.uk/wiki/Read_what_the_Newspapers_were_saying_last_time_around

Generali

macaque wrote: »

I agree with this. Despite their claims of 'being in it for the long term' few amateur BTLs would have much staying power in a stagnant or falling market.

The fact is that we just don't know. Perhaps they'll hang on in there, perhaps not. The belief that property is a great (the best?) investment runs pretty strongly through the British psyche. At the same time, lots of BTLers (most?) have good positive cashflow.

On the other hand, it's pretty ballsy to hold on to a depreciating asset when everyone around you is screaming 'sell!'.

Running_Horse

Generali wrote: »

The fact is that we just don't know. Perhaps they'll hang on in there, perhaps not.

Presumably they will hang in there if rents cover the mortgage. The question is, in a house price slump, will tenants gain the same confidence as buyers and force down prices? Rents are no more fixed than asking prices.

mr.broderick

macaque wrote: »

Properties on offer through estate agents are looking increasingly like a false market. Home owners are attempting to sell at bubble prices. To be fair, a few unwary buyers who have failed to follow events in lending markets are still being suckered in. The numbers of these sales however are falling like a stone.

Auction results are a better indicator as committed buyers and sellers come together to determine a fair market price. If the property sells, it has been valued at a fair market price. If it doesn't, the reserve price does not reflect the true market value. In recent weeks properties have been selling at discounts of up to 40% in auction (see recent telegraph article). Even more revealing however are the properties which fail to sell:

http://www.pattinson.co.uk/public/content/Auctions/AvailableAuctionResults.aspx

September 2007
Sold 32.6%
Unsold 66.6%
Withdrawn 0.7%

Look how this contrasts with a year earlier!

October 2006
Sold 63%
Unsold 9%
Withdrawn 28%


Buyers; think before you make an offer! Is the price in the window realistic?

Macaque do you have any other interests or is it just your intention to post as many threads as possible concerning a possible house price crash?
Is there a reason you want prices to tumble?

carolt

I think to be fair you should ask that same question of people like CB1980 who seem to be trying their hardest to talk the market up.

Or to put it more charitably, everyone is just expressing their opinions about house prices - if I am not mistaken, this is the House Buying, Renting, Selling & Prices forum, so it seems not unreasonable to post threads on the subject. If Macaque, along with others (including myself) believe house prices are falling or about to fall, this seems a pretty reasonable place to post that.

If you don't like that, visit another forum - on Shop but don't drop, for example, I believe you will find scarcely any discussion of house prices, in either direction......... :rolleyes:

Turnbull2000

mr.broderick wrote: »

Macaque do you have any other interests or is it just your intention to post as many threads as possible concerning a possible house price crash?
Is there a reason you want prices to tumble?

Swings and roundabouts.

Macaque obsesses about a house price crash, mr.broderick obsesses about Macaque :rotfl: