Are Buyers Clinically Insane ?

[TGP]

OK .......

Here's my anecdotal. Went to see a 2-bed Bungalow on Saturday, just come on the market. £250k. We're FTB'ers.

The bungalow was in a state, the owner had died and it had been empty for six months (although it had just come on a few days ago.... troubles with the bank apparently).

The doors were hanging off the kitchen units, it had recently been re-wired very crudely.... the holes cut in the walls for the new wires hadn't even been plastered over to a good finish, just roughly plastered up.

The conservatory looked about 20 years old, single glazed and alimunium. Ripe for replacement.

Whatsmore much of the "house" was in fact a small flat roofed kitchen extension added to the original small bungalow that THEN had a "lean to" added around it connecting it to the garage. Adding a "proper" extension would have involved ripping all this out and replacing it for a gain of not many m2 downstairs (but with the possibility of this adding a 3rd Bed and ensuite upstairs as a loft conversion). The house is billed as 100m2, but about 1/3rd of that is the lean-to, garage and conservatory all of which would have to be replaced and/or made double skinned to insulate.

The "energy efficiency" rating (due to all the lean-to portions and bad insulation) is horrific. A "G" the worst rating on any house I've ever seen on those little energy graphs you get.

You can see the house here.... just LOOK at it. Deal territory, right ?

Clicky Linky - 2 bed sh*tpile

Clicky Linky - Floorplan - Everything in the top rectangle is the original bungalow, anything else is shoddily constructed ext/cons that would need to be replaced except, perhaps, the kitchen.

It IS in a nice location. It does have a nice garden and some reasonable views.

We estimated that it'd cost roughly £60-£65k to turn it into a "nice" 3-bed with slightly larger medium-quality re-fitted kitchen and replaced conservatory. Had that been done, looking at local prices, we estimated AFTER that work it may have been worth £275-300k, although you'd lose your kitchen for a good protion of the re-build time (and thats assuming flat house prices).

In the past 2 years..... some houses (done up) on the road have gone for circa 300k after they've had these "big extensions + loft conversions done"..... but one went for 140k and one for 150k (we assumed they were the "no extension/poor condition" ones) in 2007 and 2006 respectively. Indicating that the "bas bungalow" was only worth 15-k even at peak. All the houses on the street are the identical orginal houses with various extrensions.

As a comparison..... there is a 3-bed down the road (approx. 1 mile away) that has a larger garden, 3 beds and is all "done" bar some re-decorating. It's on the market for £300k and hasn't shifted for 14 months. Here it is.......

Clicky Linky - Nice Alternative

Based on all this we thought it was overvalued. Especially with the bank involvement and the fact that it's vacant, looks like a pile of sh*t and that you'd have to replace about 1/3rd of the current sq footage to turn it into a good condition 3-bed. That and the fact that bungalows in a similar (or possible slightly worse) state went for 150k at or around the peak (minus the extension+conservatory we'd want to rip out and re-build).

We were thinking........ given the obvious issues with the place...... that we'd have to start any offer at about £175k and not go above £200k to make it a viable proposition. To be honest, I'd have wanted to get it at 175-180k. I knew this was unlikely, but ....... hey.. in comparison to other houses that is pretty much all you could justify on the damn thing. There are other 3-beds down the road listed as SSTC that went for 250k all done up with a similar garden.

Clicky Linky - Another alternative SSTC At 250k Asking

Today the EA rung me up "for my impressions". I told him.. it's overvalued. We can see the potential but it would have to be an extremely low offer to make it worthwhile. Like a REALLY low offer.

He told me....... after being on market for 4 days...... they'd had 3 offers........ 235k, 245k and 250k (full asking price).

I am STUNNED.

What is WRONG with people ! This is pure insanity !

Has everyone had their brains removed ? I feel like I'm living in a Monty Python sketch.

I'm certainly going to withdraw from the market for 6-12 months, because this (and other properties I've seen where similar things have happenned) has convinced me that there is no way I can get the kind of deal I need to get now in order to have a buffer for when the next drop comes. Sellers SHOULD be willing to make a deal...... this house looked slap bang in the middle of "deal territory" to me ....... but why would they when morons come in and make 3 "asking price or therabouts" offers in the first few days !

And what of the psychology of these buyers ? From what I can make out....... the "lowest" anyone thought to go in on this house was about 6-7% off asking ! As a first offer ! In this climate ! With an obvious "vacant, dead person, needs a lot of work" deal house !

The others I can understand, they were just trying to beat the first guy........ but how on earth did that first guy decide to go in after a couple of days with a less than 10% off asking offer ?!?!?!?

Is there something I'm missing here, I am a naive FTBer afterall....... Or are some buyers really as stark raving mad as this makes them look ?

Yours,

TGP

[dothemaths]

Is there something I'm missing here, I am a naive FTBer afterall....... Or are some buyers really as stark raving mad as this makes them look ?

Yours,

TGP

Years and years of bubble has warped people's sense of reality. Sadly it will all end badly. I stopped looking seriously 3 months ago after seeing too many silly offers being made by buyers.

Edited February 15, 2010 by dothemaths

[dingle]

Yes mate 99% of housebuyers are clinically insane, bonkers! crazy! idiots ! Tw*ts ........etc

Mike

[Tim Miller]

I don't think you have long to wait until reality hits. I would sit back and let nature takes it's course. IMO you will see 30% + falls.

I have one question, why are you even looking at buying at this time? I can't think of a worse time to buy!

[Si1]

just group think - completely normal human tribal behaviour

if everyone acted individually in a tribe on the African plane then they would die out pretty quickly, they have to act in unison. individualism is a minority trait and shunned by social forces, as well as evolutionary ones (it feels bad to be contrarian).

[NEO72]

OK .......

Here's my anecdotal. Went to see a 2-bed Bungalow on Saturday, just come on the market. £250k. We're FTB'ers.

The bungalow was in a state, the owner had died and it had been empty for six months (although it had just come on a few days ago.... troubles with the bank apparently).

The doors were hanging off the kitchen units, it had recently been re-wired very crudely.... the holes cut in the walls for the new wires hadn't even been plastered over to a good finish, just roughly plastered up.

The conservatory looked about 20 years old, single glazed and alimunium. Ripe for replacement.

Whatsmore much of the "house" was in fact a small flat roofed kitchen extension added to the original small bungalow that THEN had a "lean to" added around it connecting it to the garage. Adding a "proper" extension would have involved ripping all this out and replacing it for a gain of not many m2 downstairs (but with the possibility of this adding a 3rd Bed and ensuite upstairs as a loft conversion). The house is billed as 100m2, but about 1/3rd of that is the lean-to, garage and conservatory all of which would have to be replaced and/or made double skinned to insulate.

The "energy efficiency" rating (due to all the lean-to portions and bad insulation) is horrific. A "G" the worst rating on any house I've ever seen on those little energy graphs you get.

You can see the house here.... just LOOK at it. Deal territory, right ?

Clicky Linky - 2 bed sh*tpile

Clicky Linky - Floorplan - Everything in the top rectangle is the original bungalow, anything else is shoddily constructed ext/cons that would need to be replaced except, perhaps, the kitchen.

It IS in a nice location. It does have a nice garden and some reasonable views.

We estimated that it'd cost roughly £60-£65k to turn it into a "nice" 3-bed with slightly larger medium-quality re-fitted kitchen and replaced conservatory. Had that been done, looking at local prices, we estimated AFTER that work it may have been worth £275-300k, although you'd lose your kitchen for a good protion of the re-build time (and thats assuming flat house prices).

In the past 2 years..... some houses (done up) on the road have gone for circa 300k after they've had these "big extensions + loft conversions done"..... but one went for 140k and one for 150k (we assumed they were the "no extension/poor condition" ones) in 2007 and 2006 respectively. Indicating that the "bas bungalow" was only worth 15-k even at peak. All the houses on the street are the identical orginal houses with various extrensions.

As a comparison..... there is a 3-bed down the road (approx. 1 mile away) that has a larger garden, 3 beds and is all "done" bar some re-decorating. It's on the market for £300k and hasn't shifted for 14 months. Here it is.......

Clicky Linky - Nice Alternative

Based on all this we thought it was overvalued. Especially with the bank involvement and the fact that it's vacant, looks like a pile of sh*t and that you'd have to replace about 1/3rd of the current sq footage to turn it into a good condition 3-bed. That and the fact that bungalows in a similar (or possible slightly worse) state went for 150k at or around the peak (minus the extension+conservatory we'd want to rip out and re-build).

We were thinking........ given the obvious issues with the place...... that we'd have to start any offer at about £175k and not go above £200k to make it a viable proposition. To be honest, I'd have wanted to get it at 175-180k. I knew this was unlikely, but ....... hey.. in comparison to other houses that is pretty much all you could justify on the damn thing. There are other 3-beds down the road listed as SSTC that went for 250k all done up with a similar garden.

Clicky Linky - Another alternative SSTC At 250k Asking

Today the EA rung me up "for my impressions". I told him.. it's overvalued. We can see the potential but it would have to be an extremely low offer to make it worthwhile. Like a REALLY low offer.

He told me....... after being on market for 4 days...... they'd had 3 offers........ 235k, 245k and 250k (full asking price).

I am STUNNED.

What is WRONG with people ! This is pure insanity !

Has everyone had their brains removed ? I feel like I'm living in a Monty Python sketch.

I'm certainly going to withdraw from the market for 6-12 months, because this (and other properties I've seen where similar things have happenned) has convinced me that there is no way I can get the kind of deal I need to get now in order to have a buffer for when the next drop comes. Sellers SHOULD be willing to make a deal...... this house looked slap bang in the middle of "deal territory" to me ....... but why would they when morons come in and make 3 "asking price or therabouts" offers in the first few days !

And what of the psychology of these buyers ? From what I can make out....... the "lowest" anyone thought to go in on this house was about 6-7% off asking ! As a first offer ! In this climate ! With an obvious "vacant, dead person, needs a lot of work" deal house !

The others I can understand, they were just trying to beat the first guy........ but how on earth did that first guy decide to go in after a couple of days with a less than 10% off asking offer ?!?!?!?

Is there something I'm missing here, I am a naive FTBer afterall....... Or are some buyers really as stark raving mad as this makes them look ?

Yours,

TGP

I'm in a similar situation but for anyone paying those prices I just think 'more fool you'. I don't doubt there will always be demand for overpriced houses however market forces and in particular bank lending will curtail that demand as many will find out later this year.

Remember as well that the vast majority of those selling houses will have a greater motivation to do so than you do to buy - so bide your time, there's no rush.

I wish I could just stick my head in the sand (and in particular avoid this website) for 12 months until things have well and truly shifted to a full on HPC (as they most definately will) but it's like playing with a bad tooth - you know you should but just can't help it...

[goldbug9999]

There are several psychological factors involved. Firstly theres a general desensitization to large amounts of money. Thanks to soaring prices and easy credit people no longer think of a quarter of a million quid as "a lot of money" when it patently is especially when compared to the average wage earners disposable income. People so see it as an "investment" and not a loan of money that one day they will actually have to pay back. Its the same thing with cars - people happily spend 20-30k on a car that they couldn't possibly ever afford to pay cash upfront for. Its just madness, for myself my current car cost me £1500 off ebay even though my income is near £100k PA because I have a strict no credit rule with my finances.

The other factor is a well known marketing phenomena where people have a strong tendency to associate intrinsic value withthe price of something when they were first exposed to it. So people coming on to the market in recent years equate these huge sums to "good value".

[MississippiJohnHurt]

snip

I live pretty close to here, and yes, prices are mental. For those who need context, this is a town with no tube station, no train station (and traffic jams every morning just to get to a station) and and the M25 running literally right past , it is one of the borders of the town. The "historic" bit that agents bang on about is no more than one street really. The rest is staff terriers and fish and chip shops, and the Roundhills estate (nice).

Isnt the house you put up overpriced even for the area? It's a total, total sh*thole. Even round there I'd think they'd struggle to get 150k, unless lots more people take acid than I thought in Waltham Abbey.

[cool_hand]

Anyone paying £250K for that needs their head examined.

[TGP]

I don't think you have long to wait until reality hits. I would sit back and let nature takes it's course. IMO you will see 30% + falls.

I have one question, why are you even looking at buying at this time? I can't think of a worse time to buy!

Well, I have to say I agree, it's an awful time to buy...... but as to the reason we are looking it was a combination of factors.........

1) We finally have enough of a deposit to look at houses in our range on 10-15% mortgage deals and we have a very high combined income that would allow for a lot of IR increases without killing us off.

2) We just got married...... are anticipating children in a year or so....... and wanted to get "settled in" to our own house before the pregnancy/kids

3) Naively and Follishly, I figured most people could see an awful crash was coming...... so I figured people should be open to "big deals" on some houses with "distressed" sellers at the moment. Hell, I even expected some ensconced OO to have seen the writing on the wall and be prepared to take deals now. I figure the median estimate is for a 20% drop from here (30% from peak), so if I can get a 10-15% discount I have that covered to a certain extent (This is NOT what I am seeing BTW. All offers are going at about 5% off asking, I was thinking most would be 10-15% off asking).

4) Our current landlord wishes to sell the house we are living in currently. So we are likely to have to move in the next 6-12 months in any case and 1 move seemed an improvement over 2.

5) I'd planned to start looking this year approx. 12 months ago....... on the basis that "they'll have fallen another 10% by then" and the momentum of that decision forced me to look now, even though the anticipated falls hadn't arrived. There only so long you can hold the wife off ..... now I had to at least TRY a look before telling her "No freaking way", although it's very nice to report she agrees with me that "No freaking way" is a sensible decision at present.

6) Sick of renting. Want our "own" house that we can re-decorate sure in the knowledge that we'll reap the rewards of the work, and not get kicked out 6 months after "making it all nice".

Of course........ those reasons are largely predicated on us "getting a good enough deal" that we'd have a good 10-15% HP drop "already built in" and as we're not planning to move again for at least 7-10 years, then I didn't mind if we "lost" another 10-15% on top of that as I expected to "regain it" by the sale date.

Seriously.........more fool me......... I thought that by this point we'd be experiencing either lots of desperate sellers, or buyers unprepared to pay peak prices for property given the obvious impending cataclysm. It's just not what "most buyers" appear to be thinking. As far as I can make out the buyers offering on houses we're interested in are thinking "Hey ! It's 2000 all over again. I'm going to make a KILLING on this house. No price is too high !"

My view of the average persons understanding of economic forces was a tad too optimistic I think (I'm an economics grad so it's hard for me to understand what "normal" people are thinking looking at the current market)........ I just cannot understand people looking at this economic climate and thinking "Oh yes, a 2007 asking price seems a really good deal" but, apparently, thats exactly what many are doing ! My estimation of their grasp of basic economics (or alternatively their sanity) has taken a huge knock

There are several psychological factors involved. Firstly theres a general desensitization to large amounts of money. Thanks to soaring prices and easy credit people no longer think of a quarter of a million quid as "a lot of money" when it patently is especially when compared to the average wage earners disposable income. People so see it as an "investment" and not a loan of money that one day they will actually have to pay back.

[...]

The other factor is a well known marketing phenomena where people have a strong tendency to associate intrinsic value withthe price of something when they were first exposed to it. So people coming on to the market in recent years equate these huge sums to "good value".

Yes, I completely agree. Despite the economics "book learning" I am also feeling these forces as a very strong draw. Particularly the "intrinsic value being set on first exposure". I have to keep doing the mental equivalent of hitting myself with stick repeating "that house is just freaking NOT worth it's 2007 price. Don't make an offer you moron" and thats with my understanding of the economics helping me out and providing the stick. I expect most peoples go with their "gut instincts" on this, and their "gut instincts" are very wrong in this situation.

I suppose I started this thread as a rant........ but I wanted to know.......

1) Am I insane ? Or are they ? It's tough to be the "odd guy out" all the time without questioning that.

and

2)....Now....... I am interested to know.... When do you guys think we'll run out of morons ?

Yours,

TGP

[TGP]

I live pretty close to here, and yes, prices are mental. For those who need context, this is a town with no tube station, no train station (and traffic jams every morning just to get to a station) and and the M25 running literally right past , it is one of the borders of the town. The "historic" bit that agents bang on about is no more than one street really. The rest is staff terriers and fish and chip shops, and the Roundhills estate (nice).

Well....... to be fair....... on the transport links it is pretty good for a "small village". Most other similar "out of town" places we are looking at are this far or further from the station. One of the reasons we were interested. Where we rent now is a 5 mile trip to the tube station for me each morning. This would have been a 1.5mile trip, so it's not too badly located for transport. (BTW, the wifde refuses to consider living inside the M25, or in cheaper large towns like Harlow or Hoddesdon although she likes Bishops Stortford and Epping).

Isnt the house you put up overpriced even for the area? It's a total, total sh*thole. Even round there I'd think they'd struggle to get 150k, unless lots more people take acid than I thought in Waltham Abbey.

Yes, thats EXACTLY what I thought. (or at least......... current sh*thole, but with possibilities to be a nice house providing 50-60-70k went into it... the views are reasonably good as is the garden and location)

So.......150-175k mark seemed reasonable, I'd have been happy to go at 175k........ but Nooooooooooo........ apparently the areas IS filled with acid heads because the bids they got AFTER 4 DAYS were 235, 245 and 250 !

I feel like individually locating each of these buyers, holding them down and screaming in their faces "Do you realise you are crippling your family finances FOREVER ? Are you INSANE ? Do you HATE YOUR KIDS or something ?"

But apparently this is perfectly normal behaviour.

Yours,

TGP

[Tim Miller]

1) Am I insane ? Or are they ? It's tough to be the "odd guy out" all the time without questioning that.

and

2)....Now....... I am interested to know.... When do you guys think we'll run out of morons ?

Yours,

TGP

It's the UK home owning culture, the press don't help, they still run articles on houses on the market and they are always going to say "buy now" I do agree though, it's obvious what will shortly happen and yet the morons keep buying. I think we at HPC are just better informed than the average person out there. We read articles that are posted giving the financial warnings rather than articles on 'thick and thin' (David and posh) is it and that awful woman Katie Price!

Moving on to morons, there is an unending supply so go short on morons if holding shares on morons.

[Lennon]

On topic - yes, you have to remember that to have even looked at HPC you are in a shockingly small minority that is at least aware that there is an alternative viewpoint to "cant go wrong investing in a house". You have to remember that most people don't understand large numbers - they are not borrowing quarter of a million quid - they are investing in a home that is worth quarter of a million quid.

The money (ie the debt) is intangible, and I think more intangible for people now that we use cash or even cheques less than ever before - money doesn't mean anything - people are paid as electronic numbers, and they pay all there bills as electronic numbers.

By contrast the asset (the house) is very tangible and something that they can and do have a genuine connection to.

Entirely OT - shocking estate agent pic of the garden - you can see the reflection in the window - it wasn't raining, so he could at least have opened the door!

[MississippiJohnHurt]

Well....... to be fair....... on the transport links it is pretty good for a "small village". Most other similar "out of town" places we are looking at are this far or further from the station. One of the reasons we were interested. Where we rent now is a 5 mile trip to the tube station for me each morning. This would have been a 1.5mile trip, so it's not too badly located for transport. (BTW, the wifde refuses to consider living inside the M25, or in cheaper large towns like Harlow or Hoddesdon although she likes Bishops Stortford and Epping).

I dunno, I go for travel links every time cos of all the road traffic in this part of the world. I used to live a couple of miles from a station round there and found that driving to it, parking, etc etc added a minimum of half an hour to my journey, sometimes it was more like 45 minutes. Just saw one you might be interested in on Rightmove btw, I'll PM you.

So.......150-175k mark seemed reasonable, I'd have been happy to go at 175k........ but Nooooooooooo........ apparently the areas IS filled with acid heads because the bids they got AFTER 4 DAYS were 235, 245 and 250 !

I feel like individually locating each of these buyers, holding them down and screaming in their faces "Do you realise you are crippling your family finances FOREVER ? Are you INSANE ? Do you HATE YOUR KIDS or something ?"

But apparently this is perfectly normal behaviour.

Heh heh, I know what you mean. You do feel like shaking people when they are just blindly walking into the flames.

[Tankus]

Its worth what they get for it , not what you , think it is !

[newbonic]

OK .......

Here's my anecdotal. Went to see a 2-bed Bungalow on Saturday, just come on the market. £250k. We're FTB'ers.

.....TGP

I think you'll get the real answer to this question in a year's time, after post election:

• IR rises
• public sector job cuts
• public works cuts
• tax rises (in one form or another)
• trade deficit falling off a cliff

etc.

My money is that people will look back on the current phase with wonder and bemusement, and think 'how could we ever have been so stupid'. Just like in the aftermath of the early 90s HPC.

[non frog]

....

The money (ie the debt) is intangible, and I think more intangible for people now that we use cash or even cheques less than ever before - money doesn't mean anything - people are paid as electronic numbers, and they pay all there bills as electronic numbers.

By contrast the asset (the house) is very tangible and something that they can and do have a genuine connection to.

.....

I think this is a fair point. People have become so used to telephone number prices that the odd twenty or thirty grand is small beer. Twenty grand is a lot of disposable income even if you are very well paid. Remember you pay for the little brick box out of your taxed income. Tax is going up. Wages are going down. Food and fuel is going up. Twenty grand is a fair wodge.

Furthermore very few people ever get to see the hard monetary value of a house. To do this you need to sell up and live in another property, either rented or owned, as I do. If the one you sell up is 250K then you actually see that number in your bank account. This, of course, only applies if you don't owe 215K of the dosh to the bank.

The acid test is if you had 250K in the bank and at the same time somewhere to live would you "invest" the quarter mill in a brick box? Very, very few people are facing that decision. Buying a house on the never never when you think inflation is going to wipe out the debt or that the house will double in value in ten years is easy. That's playing with someone else's (the bank's) money. For the last 18 years or so that "trick" has worked. I doubt it will work any more but by the time I get proven wrong or right it will be too late for most people.

I sold up all my property in the UK in 2007 and nothing on this wonderful little planet would persuade me to buy back into that market now.

[Mykingdomforahorse]

Put in an offer for 100 pounds?

[Tiger Woods?]

Yes mate 99% of housebuyers are clinically insane, bonkers! crazy! idiots ! Tw*ts ........etc

Mike

Clinically insane - maybe.

Congenitally stupid - most definitely.

[TGP]

Its worth what they get for it , not what you , think it is !

Well, not quite........

This what was so infuriating about these offers. Not only do I personally think that they were way too high........ you can see by looking at similar houses in the same village that the price should have been unreasonably high.

There are currently about 2 or 3 houses in the village that

a) Are 3 rather than 2 bed

Are in a livable condition today, not a broken sh*tpile

c) Are OO, or are obviously not "deal" houses like this one

d) In some cases they are even cheaper !

The mind boggles. Not only is it overprices in my limited estimation........ it's overpriced compared to a cursory comparison to other properties in the same village...... and certainly overpriced compared to sold properties on the same street (the aforementioned one at 150k in 2007 and one at 140k in 2006.... for identical bungalows, perhaps minus the kitchen extension).

There is just no angle I can find that you can look at this house from and conclude it is "worth" £250k.

It's like seeing 4 cars lined up. A good condition Ford Focus, a good condition Ford Mondeo, a good condition Ford Orion..... and a sh*tty rustbucket of a Ford Cortina...... and then watching some idiot waltz in and pay 10% over the Ford Focus's sticker price for the Cortina !

In other anecdotal news..........

I mentioned above one of the reasons why we are considering moving is our landlord wants to sell our place. It's another 2-bed house .... bought in 2006 for £262,500.... they just had it listed for £300k !!! 2 weeks........ one viewing. So I don't think that we're going to get chucked out any time soon.

Again, in the same village.......... there is a small 3 bed on for £235 (it's 2005 sale price) and another 3-bed that was £300k and got reduced to £270k today. So I think their £300k dreams are going to take a hit.

Don't get me wrong, it's a lovely house. Nice garden. View over Fields etc. Nicely done out........ but who in their right mind is going to pay £300k for a 2-bed when you have a choice of 3-beds in the same tiny village for 10% and 20% off that price respectively ?

Or so I would have thought........ after our experience with the house we were discussing above I am half expecting a lobotomy patient to roll through the door, drool on the carpet, and immediately insist on making an offer at £299,500 jumping with joy that he got a £500 discount.

Yours,

TGP

[Rozza]

unfortunately you are also dealing with phantom offers, i dont mean phantom as in the EA made them up but as in people go and view a house and make an offer and its accepted thus putting you out of the race.. only a) they cant afford the offer so the mortgage is declined or they cant get the mortgage they need on the property as the bank values it a lot less, so the place later comes back on the market.

Ive seen this a fair bit offered on a couple of places last september and was immediately told "we have had a full asking price offer" the places went to SSTC and now most of them are available again as finance wasnt in place or couldnt be put in place. Because offers arent legally binding these idiots are bidding almost like its monopoly money leaving the actual person who could buy the property (i.e you) being outbid by people who never will be able to.

[surreybased]

We also have the madness in our area, houses are having 20 viewings and multiple offers. We were even told by an EA that a house we were interested in (& would offer £50k lower) would sell for above asking as the vendors had so much interest. As a result we've gone on a viewing strike,no point encouraging the lunatics. Like you, our LL has sold the property, so we have an move date, looks like another rented place for us (will be 3 in 2 years so not ideal, especially with a family) but a move is a week of upheaval and then life goes on.

I can't understand what's going on?? where is the money coming from - is it all IO mortgages and people assuming low IRs over the long term?

Rozza, hope it is the case - I do track sales and lots are going through but maybe the recent batch of SSTC will struggle.

Edited February 17, 2010 by surreybased

[OzzMosiz]

I've recently bought and I'm not clinically insane!

[TGP]

I've recently bought and I'm not clinically insane!

Did you price a fall in the housing market into your offer ?

Were there important extenuating circumstances ?

How does your sale price stack up against recent sale prices on the same street ?

These may help you avoid the diagnoses of insanity.

Look, recently there was a post by a guy around here. He was looking for a 3-bed because he only had a 2-bed and 2 kids. Each kid had a different room, and so him and the wife were sleeping on a sofa-bed in the living room.

In his circumstances...... I can understand the need to buy now. Who wants to live off a sofa-bed in their living room ? I can understand that.

Alternatively, if you got a house about 15-20% off "market value" for that street, I can understand buying now.

If you just went in and made a full asking price offer, on a sh*tpile, with no extenuating circumstances "forcing" the move and despite that property appearing to be 20% overpriced for the street (as in this circumstance)........ then you may be insane.

It's all about context.

You don't have to be insane to buy........... you DO have to be insane to buy 10-20%+ overpriced properties, in this market, at full asking price if you have no need to move now.

Thats what appears to have happenned here.

Yours,

TGP

[OzzMosiz]

Did you price a fall in the housing market into your offer ?

I'd considered it. I can take a further 20-30% fall without worrying too much

Were there important extenuating circumstances ?

Yes, I want freedom to do in my home whatever I want (decoratively), I also didn't want to be paying rent anymore and want a dog!

I'd also substantially increased my deposit by dabbling on the stock market (400% increase in an investment in 3 months)

How does your sale price stack up against recent sale prices on the same street ?

Same style houses were being sold in 2007/2008 for 30% more than what I paid.

This particular house last sold in Feb 2001. I paid 30% more than what it sold for back then.

These may help you avoid the diagnoses of insanity

TGP

Edited February 17, 2010 by OzzMosiz