House Price Crash Discussion Thread

loopsntroops

I keep putting off getting my place valued. I bought just before all the house prices went sky high in Northern Ireland - paid 60K but mortgage evaluation valued it at 90K. Few months in I re-mortgaged for 74K to pay off debts and get a decent car (still running well..touch wood). AT this point in time a downstairs flat sold for 145K (that was only one bed and mine is two bed with garden and private balcony).

Flip I wish I had sold then!! Hind sight is a fabulous thing!! lol However...I am soooo glad a only remortgaged for 74K even though everyone was saying I could get much much more...didnt like the idea of a mortgage any bigger than 74K. One day I might actually start to re-pay it teehee.

Good job I have a sense of humour!!

Drag1

It's so hard for us young buyers at the moment. I actually got advised by an expert not to buy a house in the next 5 years.

Reactor_2

Let's be realistic here. Your house is worth only as much as the next person is willing to pay. If no one is paying the price, it means your house is overvalued.

The housing price index suffers from survivorship bias, this means it only shows successful transactions, which hides all the homes that remain unsold that have been put up for sale. The only people who are transacting are those who can afford the loss, or those who are not in negative equity, which I can guess is a small proportion of the population. The rest of us will just have to bear the financing costs until we get into this group.

As for another house price crash, I don't think it is likely anytime soon as we have already had a crash back in 2008 and 2009 which was a function of unemployment and there aren't any heavy lay-offs at the moment. Of course if there is another crash, the survivors will be more able to afford a home, but I'm not betting on that scenario.

IveSeenTheLight

Reactor wrote: »

Let's be realistic here. Your house is worth only as much as the next person is willing to pay. If no one is paying the price, it means your house is overvalued.

The true valuation of a property is what a seller and a buyer have mutually agreed upon.

To use an extreme example: -

If you had a car worth roughly £10k and I offered you less, lets say £5k.
I'd presume you would decline my offer, why because you value it at more.
Now if we negotiated and finalised on a figure of say £8.5k, only then could you say that the originally marked price was over valued.

Reactor_2

With your car example, the fact that you didn't want to pay £10k, already contains the information that the price is overvalued, so we didn't have to deal at a lower price to establish the overvaluation. This of course is true only for a short period of time because if you had an infinite amount of time you can wait for the price to come to you.

bkerai81

i bought a 3 bed side garage house (buy to let), went to view it 3 times, and 3 times the price went down in 3 months!, i am now looking at a flat to move into and some gone up and some going down. Best trick is to make an offer to estate agent,, when he cals you back tell him you want to retract the offer, and watch the asking price tumble slightly,, Estate agaents=Big !!!!!!!!ters, cant bull !!!! a !!!!!!!!ter thats why i take my estate agent friend!!,,

IveSeenTheLight

Reactor wrote: »

With your car example, the fact that you didn't want to pay £10k, already contains the information that the price is overvalued, so we didn't have to deal at a lower price to establish the overvaluation. This of course is true only for a short period of time because if you had an infinite amount of time you can wait for the price to come to you.

Ok, the car example was trying to put it simply and as you point out, it's generally a depreciating assett to which you can generally wait for the price to come to you.

I don't accept the statement because the buyer didn;t want to pay the asking price it establishes the commodity is overvalued.

I just offered for a property, I offered below the asking price and home valuation report. The offer was rejected.
Does that mean the property is overvalued, because I put in a cheeky offer to test the water?

IveSeenTheLight

bkerai81 wrote: »

i bought a 3 bed side garage house (buy to let), went to view it 3 times, and 3 times the price went down in 3 months!, i am now looking at a flat to move into and some gone up and some going down. Best trick is to make an offer to estate agent,, when he cals you back tell him you want to retract the offer, and watch the asking price tumble slightly,, Estate agaents=Big !!!!!!!!ters, cant bull !!!! a !!!!!!!!ter thats why i take my estate agent friend!!,,

I put an offer in for a four bedroomed house 17 days ago.
The offer was rejected.
I've waited as I know the market, know the sellers situation and know that as yet there are no other interested parties.
giving the seller time is allowing him to re-consider his options as the property sits on the market longer and is running up to christmas time (not a good time to sell or try to rent out).

I am going to raise my offer by 2.5% this week. It's still a cheeky offer but as they have no other interests and I'm ready with finance in place and no need to sell, I'm in a pretty strong position.

If it's not accepted, I'll leave it a little longer before raising one final time by 2.5% and advising to withdraw my noted interest if not accepted.

michaels

I quite like the theory of putting in an acceptable offer (or may be getting a mate to) and then withdrawing after a couple of weeks as where we are when a property goes from available to sold and then available again a few weeks later this is almost always accompanied by a drop in the asking price...

IveSeenTheLight

michaels wrote: »

I quite like the theory of putting in an acceptable offer (or may be getting a mate to) and then withdrawing after a couple of weeks as where we are when a property goes from available to sold and then available again a few weeks later this is almost always accompanied by a drop in the asking price...

It is of course a risk, but certain market, this might work.
In Scotland, an accepted offer is binding though and abusing the system in England might lead to firming up the position down south