Buying A House? Would you pay £20k for a £5k car?

nobblyned

TheChicken wrote: »

JUST because something is sold for more than its worth doesnt mean thats its value!


Ch!ck

That's precisely what it means.

Rover

Jorgan wrote: »

Yes, I'm an EA. We have roughly the same number of sellers as we had six months ago & the number of people registered as buyers is similar. Some buyers are trying offers 10-15% below asking price, all have been unsuccessful so far. Other buyers are fighting over the same houses.I'm not qualifed to offer mortgage advice. I struggled with the concept of the 120% mortgages when they first came out. I'm from the 'if you want something, save for it' school of thought. I think that used to be called 'old school', but has been renamed to 'sensible' now.

That's great Jorgan - you must live in a Utopian area.
So sales volumes still holding up then? If so have you notified the IMF and the CML? No doubt Warren Buffet and George Soros will be flying in shortly.

Good luck old chap.

TheChicken

nobblyned wrote: »

That's precisely what it means.

Value

"No single unit has a fixed value. Value is intrinsically related to the worth derived by the consumer."[Burke(2005)].

So therefore if value is what it is sold at a window price of £175,000 does not show value but when it is sold it becomes the value to whoever bought it but does not keep that value until it is again sold.
If I valued the house against realistic increase and paid £90,000 that would become its value to me but it would have an actual value of £0 until it is again sold -

Ch!ck

nobblyned

"No single unit has a fixed value. Value is intrinsically related to the worth derived by the consumer."[Burke(2005)].


Exactly, consumers being the ones setting the market price, value and 'worth' via demand, in conjunction with the supply side of the equation.

If consumers have decided that the value of the average house is £175k by buying it with hugely leveraged capital, then that is what they have decided. Somewhere further down the chain, they may assess that value differently when capital is not so readily available.

If you believe it is worth 30% of this, that's fine, but you won't find anyone to transact with you, so this is not a market value, or worth.

nobblyned

TheChicken wrote: »

Value

So therefore if value is what it is sold at a window price of £175,000 does not show value but when it is sold it becomes the value to whoever bought it but does not keep that value until it is again sold.
If I valued the house against realistic increase and paid £90,000 that would become its value to me but it would have an actual value of £0 until it is again sold -

Ch!ck

Oh dear! I think this demonstrates your lack of understanding quite clearly...

TheChicken

Which has been my point from the beginning consumers are paying too much creating an overinflated market value. When the Actual value of the house ie bricks and mortar is alot less!

Ch!ck

TheChicken

nobblyned wrote: »

Oh dear! I think this demonstrates your lack of understanding quite clearly...

Nothing has value till it is sold!(apart from things that we cannot put a value on ie life)
BUT it has worth, which is not the same!

Ch!ck

nobblyned

Never mind, I give up, I'll leave you to your circular argument.

TheChicken

nobblyned wrote: »

Never mind, I give up, I'll leave you to your circular argument.

You are only arguing with me on the finer points of the English Language - nothing more.
I am sorry that I don't have the best understanding of my native language but I do believe I have an argument on the fact that houses are over priced and ARE NOT valued correctly in conjuction with realistic price rises.

Ch!ck

Markyt

TheChicken wrote: »

JUST because something is sold for more than its worth doesnt mean thats its value!

If it sells for higher than average price, then the purchaser obviously considers it to be value.