another 'am i doing the right thing?' thread.

Gorgeous_George

As the pace of price drops gather pace, it is likely that the downward part of the chart will overshoot the long term average.

If you accept that sale prices are 30% to 40% too high then it is reasonable to expect that at some point they will be 50% lower than recent asking prices.

GG

Microstar_2

Gorgeous_George wrote: »

As the pace of price drops gather pace, it is likely that the downward part of the chart will overshoot the long term average.
GG

I think you mean 'undershoot'. But yes, I agree. Over time house prices oscillate about the long term average. Viewed over the sweep of time they follow the straight-line trend, but magnify and you see the oscillation about the trend line.

pinkshoes

Prices may be dropping, but the prices that will drop the most are those in the cr*p areas, or not nice houses.

Good houses in good areas will probably only have small drops, or not at all. And don't forget, that if prices DO drop, that every man and his dog will be chasing the nicest properties...

Has there been much other interest in this property? how long has it been on the market? How much do you love this property?

No one has a crystal ball, but if you find a property you really like, at a good price, then I'd say go for it. Even your mortgage is going to be lower in what you're paying in rent, so in my opinion it can't be particularly overpriced.

Just ask yourself, if you wait 12 months and can't find anything available like this house, would you be p*ssed off? Especially having been stuck in rented for a further 12 months...

ruggedtoast

pinkshoes wrote: »

Prices may be dropping, but the prices that will drop the most are those in the cr*p areas, or not nice houses.

Good houses in good areas will probably only have small drops, or not at all. And don't forget, that if prices DO drop, that every man and his dog will be chasing the nicest properties...

No. Prices are falling across the board, including in Mayfair.

Generali

ruggedtoast wrote: »

Youve misunderstood supply and demand. Prices are set by demand indexed with ability to pay.

There is a practically limitless demand for housing, always has been always will be, but the prices that people can afford are falling. £80k does sound a bit low though.

And you've misunderstood supply and demand by only looking at one side of the equation.

Supply is those people willing and able to sell at any given price.

Demand is those people able and willing to buy at any given price.

If demand > supply prices rise
If supply > demand prices fall

There is practically limitless demand for any good in limited supply. Demand is only limited when the market hits a point where having more of something incurs a cost greater than the gain from having it. To visualise this, try thinking about how many sofas you'd like. One or two in the sitting room is good. Perhaps one in the master bedroom too. Beyond that? You get the picture!

Supply is limited when the price achieved at sale is less than the cost of its replacement.

Doozergirl

Gorgeous_George wrote: »

Two options

1) Buy now at £160K and £90K mortgage.

2) Buy in a year or two at £80K (if prices cra...orrect by 50%) with £10K mortgage.


mmmmm...., let me think. "What would I do?"

I know, find a better rental.

GG

Have you gone mad? Those are the two options are they? Given those, then I know what most would choose but those weren't the two options available last time I checked my crystal ball.

I hope the OP isn't taking his question as lightly as you are taking your answers.

Gorgeous_George

Doozergirl wrote: »

Have you gone mad?

Only time will tell.

Doozergirl wrote: »

Those are the two options are they?

One is an option. The other is a possibility

Doozergirl wrote: »

Given those, then I know what most would choose but those weren't the two options available last time I checked my crystal ball.

I don't have a crystal ball. Nor does anybody else?

I guess that my gut-feeling is as good as any other. If prices can double, they can halve. If they can quadruple they can ...... ermmm, ...... quarterise (:))

Newcastle Brown is lovely.

Doozergirl wrote: »

I hope the OP isn't taking his question as lightly as you are taking your answers.

Again, only time will tell. I don't know how much you think the market will fall but I might be closer.

GG

Doozergirl

Gorgeous_George wrote: »

Two options

That was your point, GG, perhaps you've rationalised your argument somewhat, which is only what I would hope from you in the first place.

Who are you helping with comments like that? Many of the questions here are asked here by people in genuine dilemma. Does an answer like that help or even make a difference?

I think you, as a long standing poster who has quite clearly turned tide, be able to explain your reasons better than anyone. I would expect far better of you than the flippancy of late.

A Kaiser Chiefs song is in my head right now.

Gorgeous_George

time I took a break.

GG

phil_b_2

I'm not sure people factor in changes in trends and other effects of price drops? As demand reduces, supply will follow, not proportionally though of course.
There will surely be a point where sellers think 'ok, if I have to go THAT low to sell, I wont sell at all, i'll stay put". I just dont think the price drops can go as far as some think. Also, when prices drop to reasonable levels more people may make second purchases as BTL's or otherwise. Good demand is still there for good properties, wages and employment are good and people are still buying, so even a small'ish drop should pep things up (I hope).

Maybe I'm biased in not wanting a big drop soon after I purchase, but no more so than those that have been clinging to the hope of a massive crash for several years.

Just wondering as well, does anybody have any figures showing what percentage of buyers are those who need 100% mortgages? They are the main group of buyers who will stop entering the market so that figure is the most important in determining reductions in 'real' demand?

I'm kinda trying to convince myself buying is still a good idea because I want the house, but at the same time I wouldnt mind if the survey showed a major fault so I had an easy escape route and less choice!