How can house price's fall so much??

PasturesNew

Hairy wrote: »

The fact is, if you own a £300k house owe £250k to the bank, your not gonna sell for 50%. People just wont move. Unless they are forced to. Those dreamers waiting for a 50% drop I feel will be waiting an awful long time.

At the end of the day, those dreamers waiting for a 50% drop will buy a house that has dropped 50%.

Those dreamers who haven't dropped will be waiting the longest in the end.

Cash is king. And we have the cash that the sellers want.
We win.

It's just a house. We'll find another one, a better one. Yours is not special to us. Only to you.

tradetime

I may be wrong here, but how is that possible. Let me explain.

If you owned a house worth £300k and all you could get for it was £150k you simply wouldnt sell. So how the heck are house prices going to drop that much? People simply wont sell. Even if prices drop by 25% I doubt many people would sell, they would stay put, surely?? I am by no means an expert, but isnt this common sense??

Well let's see.
You bought it last year at £200k, it went up to £300K and you saw an add that you could re-mortgage and release £100K to buy a new car, enjoy some holidays, or even practical reasons such as put your kid in private school so now you're on a 100% mortgage of £300K and your fixed deal is coming to end and your Interest raates just gone from 4.99% to 6% and you can't afford it, so you have no choice.

Or maybe you were just one of the 1000's who bought last year at £300k on a 100% mortgage, on a 2 yr fix, your property has alreay drop[ped in price, next year you need to re-mortgage, if the market keeps sliding you'll be in negative equity, and may not be able to get a mortgage, so you have to sell.

Or maybe next year you'll lose your job as the conomy slows and more layoffs occur, so you'll have to sell.

Or let's not have a doom and gloom, you have a 3 bed at £300k, a 4 bed costs £400k but your increasing your family, as prices fall your £300k is only worth £200k, but the 4 bed is now only worth £270K, so why wouldn't you sell and buy the 4 bed?
People always have to sell for one reason or another, the property market will go on, but if it is to go on ther has to be someone to buy the house at the bottom of the chain, the FTB, without him nothing can happen, and at the moment he's by and large priced out, so prices must fall.
By how much, well that's easy, until the FTB is prioced back in

PasturesNew

Hairy wrote: »

NOT the same thing. if your house goes up, you dont owe that extra equity to the bank.

Patronising T**T

It IS the same thing.
Now who is the patronising T**T?

You'll see.

It might not be 50% everywhere or for every house ... but you'll see.

The answer is just don't sell it then. Wait until it's worth what you want it to be worth again.

littleowl

It is not this site. The national newspapers carried a story this week that house price falls of over 60% are possible and,if they happen, would only reflect the real value of properties.

I left the UK in 2002 and returned in 2006 and couldn't believe the price of houses. It is obscene that prices should be so high. I believe that the extraordinary hike in prices in the last ten years (estimated at 200%) is not a reflection of 'worth' but of speculation and the manipulation of the market by those making huge profits at the expense of others.

For the price of a detached house on an estate in the UK I could buy a wonderful property in France with more rooms, grounds and an immensely better quality of life.

Hairy_2

PasturesNew wrote: »

At the end of the day, those dreamers waiting for a 50% drop will buy a house that has dropped 50%.

Those dreamers who haven't dropped will be waiting the longest in the end.

Cash is king. And we have the cash that the sellers want.
We win.

It's just a house. We'll find another one, a better one. Yours is not special to us. Only to you.

So you would sell your house for half price???? lets revisit this thread in a year. See who the real dreamers are.

Hairy_2

littleowl wrote: »

It is not this site. The national newspapers carried a story this week that house price falls of over 60% are possible and,if they happen, would only reflect the real value of properties.

Thats got to be true then! are you serious??

PasturesNew

Hairy wrote: »

So you would sell your house for half price???? lets revisit this thread in a year. See who the real dreamers are.

I saw this coming.
I sold last year and banked my money.

If I were selling it today I'd have to accept probably £40k less than I sold it for a year ago.

However, I never over-stretched myself in the first place, so I could have still sold it at a profit if prices had gone down by 65%.

ruggedtoast

Hairy wrote: »

The fact is, if you own a £300k house owe £250k to the bank, your not gonna sell for 50%. People just wont move. Unless they are forced to. Those dreamers waiting for a 50% drop I feel will be waiting an awful long time.

You're right when you said that you are "by no means an expert".

People who aren't selling are not included in the price equation. You seem to think all property has some sort of notional price tag on it that rises and falls in line with rightmoves latest stats like some sort of bourse.

I'm very glad for you that you dont want to sell your house. If you do decide to sell then your "price" will already have been dictated by recent nearby sales (people who did have to sell) ; all without you doing anything at all.

littleowl

Hairy wrote: »

Thats got to be true then! are you serious??

Yes I am. When I left the UK in 2002 I sold my house for £65,000. It recently sold again for £195,000. It was a good house but that price is insane!

Hairy_2

I am in the process of buying another property, I am renting out my present one, and I completed on the sale of another for full asking price last week. Things will get bad I agree, but I doubt it will get nearly as bad as everyone is saying. Most of the over-reaction is caused by the media, as well as a few people on boards like this.