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woohoo2

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About woohoo2

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  1. OK, I can see your points about pointing out particular cases where a vendor may feel negative about the idea of reducing a price because it becomes public knowledge. But equally you could come up with scenarios where if lots of competitor properties in the area reduce their prices, it would look odd NOT to have reduced prices, and so the encouragement is there to do it, and it wouldn't look unusual at all. In any case although I accept there will always be different situations that throw up odd behaviour, I'll continue to believe that openness is beneficial in the macro. The case above that you describe as bad for the purchaser and the vendor is a case where a vendor acts irrationally against his own interest and ends up with a slow turnover. Don't worry, though, capitalism has a proven way of handling irrational players in efficient markets. They go bust and get replaced by others. The fact that you are still trading after so many of your contemporaries have gone out of business suggests that you are not as irrational as you make out :-)
  2. Ho ho! VI is showing his true colours on this one. Of course he wants to treat buyers like mushrooms, just like in the old days. The increased availability of information makes any market more efficient, and allows prices to adjust to equilibrium quicker. That is particularly useful in a property market, where prices are particularly sticky and illiquid. Like all professionals, his instinct is to resist his 'mistakes' and methodologies being exposed. He is wrong that it doesn't benefit anyone though. Even the vendor gets a long term benefit from having to think carefully before acting, and by being forced to give buyers the respect they deserve by not trying to pull any wool over their eyes. Trust (in agents and developers) by buyers is not exactly overflowing, and VI's should really be welcoming innovations which allow them to put all their cards on the table and compete openly, honestly and transparently.
  3. Hi Gadget Guy, The answer to your question here is that when prices are falling, paying someone else's mortgage prevents you from losing money owning a depreciating asset. The landlord takes the depreciation hit, not you, and so he loses net worth while yours stays stable. Assuming rental costs are broadly equivalent to interest on the capital funding the purchase price of the property, you gain by renting in a falling market. I sympathise with you all the same and agree about starting your life and all that. The uber-regulars on this site have made an alternative life for themselves watching the property market, but the rest of us mortals just want a nice house to live in and to get on with raising the family etc. Uncertainty and upheaval are not appreciated by wives and kids, and rightly so. If you buy a house to live in for decades (or life), then the purchase price is one factor but not the only factor and actually not even the most important one. You need to find the right house for you, not just any house, and you also need to get the timing right so it adds value to your life when you need it. We bought last year and don't intend to move again. We rented for over 6 months and that did save us from making a rash decision too early, but we still decided to overpay for the house we wanted and just get on with it. The only option would have been to pass on that house, wait a couple of years and hope that something as good or better came up in the same area at a lower price., while living in rented accommodation we didn't really like. Luckily we could afford not to go down that route. What I would say is that we haven't regretted it for an instant, and wouldn't even if prices fall by half again over the next few years. Giving your family a stable home, putting down roots, getting to know the neighbours, taking pride in doing the house up, entertaining friends, getting into the garden - you can't put a price on these things. And for kids, the earlier you do it the better. For ours, moving house twice within a year was heart wrenching stuff, particularly leaving friends that they had made behind. You really don't want to put kids through it unless you have to. Ideally you get the house you want before the kids even turn up, and then they never have to move at all. That's why I hate all this property ladder crap. The whole concept of a ladder implies people moving around on a conveyor belt every few years, enriching banks and speculators but reducing quality of life for the people on the stupid merry go round. We just happen to live at a time of major upheaval in property, which is unlucky in a way for the people like us who need to move on with their lives now. However your best bet is to make the decision that feels right, taking all factors into consideration. Most of all, decide what will bring you most happiness, not what makes you the most money.
  4. Hi there, We were in exactly the same sort of position in 2010/2011 and all worked out OK in the end. To sell in this market you have to pounce on any offer that you are willing to take. Another one may not come for months or years. If you are serious about moving then you need to be serious and proactive about getting your house sold. Buying in this market can be much slower however, especially if you have seen somewhere you like and you hope to bring up your family in it - any house just won't do. We ended up renting for 8 months. It really wasn't easy or ideal at all, but then we don't regret it either. It was just the way things went. In our case there was 115k between the original asking price and the eventual price we paid and the estate agent was the most arrogant of the lot so it took some time. Firstly don't worry about offending an agent with a so-called derisory offer. You have nothing to be embarrassed about. Someone willing and able to spend 190k is both rare and worthy of the respect of estate agents. You have accepted a sensible price and that gives you rock solid deposit and a right to call ******** on anyone who tries to spin a high price but is failing to sell at that price. The agent is the one who should be embarrassed with asking prices so far above rateable value. He is the one whose business is probably flat on its back and just about surviving. His asking price is based on nothing but hope and bluster. It may just deliberately be speculatively high in order to make reasonable offers look low. The only rational thing to do is to ignore the asking price completely and offer a sensible price. We did this and our offer was rejected, of course, and for some months nothing happened. It does take something like courage or a brass neck or something to tell an estate agent that you have more confidence in your own valuation of the house than in their made up asking price, but once you develop the thick skin you begin to enjoy it. That's because behind the arrogant facade they are all pretty scared and in a weak negotiating position. You have all the cards. In the end for us, we got tired of waiting and tired of living in rented accommodation, so we went back and said we were ready to offer a higher price than our ideal price, but still not near their previous bottom line either. They jumped at the chance. I don't think it is a sensible option to approach the vendor directly. They hire an agent to do that and an unorthodox approach like that is surely more risky than just giving the agent an honest opinion of what you think the house is worth and what you are willing to pay. He is not that busy so he will be sure to go straight back to them and tell them everything anyway. Just remember that any offer you make is NOT low. £190k is a lot of money. Very few people can raise that sort of money for any purpose nowadays. If anyone tells you it's low then tell them to bid against you with their own money. That always shuts people up. Anyway I hope this is some way useful as it's from someone who has been there before. One thing I'd suggest is to seriously consider short term renting or another short term solution to give you more time. You don't want to get bounced into buying a house quickly for the sake of a couple of months when the change you are making is possibly permanent. The other possibility is to pay a bit over the odds in order to buy quickly and live with that, as long as you got the right house it won't matter that much in the end. Either way though you'll need to get over this idea that the estate agent's asking price is worthy of anything but either laughing out loudly at or ignoring completely. His opinion of you is irrelevant. Be prepared to offend the agent and be prepared for any old crap he talks. Don't forget that you have all the cards and he has none. Good luck!
  5. Hi Dansworld, Don't listen too carefully to all this negativity. I love Portrush too, although I'm not a local - just an occasional visitor. The place is a real paradox in many ways. It has amazing beaches and a world leading golf course, and some excellent restaurants, and scenery etc etc, and quite a lot of wealthy people in and around it. And I know that people might be snooty about places like Barry's, but it is actually a great family attraction with a kind of retro charm - for me anyway because it is such a trip down memory lane. For what it's worth my kids much prefer it to Disney, which they thought was rubbish compared to it. Actually, catching crabs in the wee tiny beach at the harbour is much more fun than Disney, come to think of it. They just jump on the line there, and we spent many happy hours there this summer. So you would think it has the ingredients to be successful and attractive and improving. Yet somehow it has lost its way development wise for many years. Partly of course the property bubble and the attendant vulture developers has set it back years at a time when real money was available to do good things. Now there is probably no money available for anything but ironically in this circumstance Portrush has a better chance of gradually making itself more successful as a place to live and to visit. Some simple things would be to just organise to clean the litter from the rocks and the beaches - that would help a lot and couldn't be that expensive at all. I don't know anything about prices in Portrush but you are surely right not to trust estate agents. Pay no heed to asking prices of any description and do not make any reference to them when deciding any offer you might make. A sensible multiple of a reasonable rent, eg based on 10% yield, is a logical way to calculate value. A 'discount' from a stupid and possibly corrupt asking price is meaningless. If Portrush prices are allowed to fall to their natural level (which seems likely) and if the next wave of buyers are people who want to make a positive contribution to the place rather than make a quick buck then the future might just be better than you would guess looking it right now. PS - of course you're biased and so you should be. If Portrush is to improve it needs more biased people, not less.
  6. This is not really fair on Dairylea or Lambrini. I would have thought chalk would be a better comparison with cheese, and I don't want to say what my suggestion for an alternative to wine is
  7. Hi Sneeze, Let's look a bit more closely at the Bel Tel figures before you go believing anything they write. Their story that you refer to said that there estate agents are selling 10.4 houses per month each on average. Presumably they mean this is UK wide, but it was presented as still not quite enough because during the boom it was more than double that. It was also presented in a way to imply that it applied here. So does it, and if 10.4 houses means some sort of stabilisation then should we think that things are stabilising? Well then all we need to do is look at the website owned by Belfast Telegraph, Property News. On that there are 476 Northern Ireland agents listing 25,756 houses for sale. This figure has increased from 25,000 in the past few months so no indication yet of stabilisation there from this very high number for sale. At the height of the boom there were less than 5,000 for sale. When this number starts to fall rapidly we should maybe start to talk about when prices will stabilise, although it is not necessarily even a conclusion that prices will fall while the number for sale is falling - there will be a lag and downward pressure on prices, even after houses have started to sell, until the number for sale reaches an equilibrium level. What that equilibrium level is is open for debate. My guess is somewhere between 10,000 and 20,000 properties. Digging a bit deeper with the benefit of treesdontgrowtothesky.com, the net number of properties per week going sold (estimate from number going sale agreed minus number of sale agreeds falling through) is 160. That means that about 700 properties per month are selling on Property News from 476 agents which works out at 1.47 houses per estate agent per month. Now 1.47 is a smaller number than 10.4, and it is derived from the Belfast Telegraph's own data from a website that they own. Which do you believe, their story or their published data?
  8. Well you ask that, but the fact is here we all are analysing the asking price and talking about why they've changed it, trying to get inside the mind of the seller and talking about making offers xx below the asking price. So obviously asking prices exert a strange hold over even experienced HPCers, never mind the general populace. They are important because they provide a psychological 'anchor'. It's just like in the supermarket, if Sainsbury's can convincingly say that the strawberries were once £4.99, then it helps to sell them at 'half price'. Even though nowadays we all suspect that the strawberries were never mean't to be sold at £4.99, it still helps the sales to have that half price sticker. The best way to beat this anchoring of our thoughts by the VIs is to have our own anchoring in place. Some HPCers use 'peak prices' as an anchor and then go for 50% off or 40% off or whatever. Even that I think is not right because it implies that peak prices represented some sort of reality, and that something less represents some sort of bargain. I prefer something like the multiple of average income - an anchor actually rooted in the real world. For instance if the house is a normal semi (an 'average' house), then we could say a sensible anchor is 3.5 times average income, lets say £95k. So anything we offer for an average semi should be referenced to that £95k anchor, and the asking price should be ignored. However that is not what happens in practice in 99% of cases, which is why asking prices are so influential.
  9. Hi Dick, A few points that might help: 1. The rent is dead money argument is the one everyone uses, but it really only stacks up in a rising market. The reason for this is that the capital you use to buy the house also has a cost. If you borrow £60k to buy a house, or use your own money then you must pay several thousand pounds a year in interest. In that sense you 'rent' the money from the bank. That's also 'dead' money, it's just paid to a greedy banker instead of a greedy landlord. The cost of rent over the next few years is relatively predictable. The cost of interest payments is not. 2. In the past 20 years your logic would have been the correct one to use for a student because many students have left university and found themselves in a very difficult position trying to buy their first property. Those who got in early saved themselves a lot of trouble. I bought a house myself shortly after doing my degree and it was good for me that I did it so early. However if you look at the history of housing bubbles and busts (find some info on this site), you would conclude that something major has happened that will not resolve itself for years. That means that the old assumptions of rising property values have gone. For me it means that the risk of another bubble in the next few years causing you to be left on the sidelines is very low. 3. Like shipbuilder, I think (and hope) that the idea of speculating on rising house prices as a way of making your way in life is wrong in principle but also going to be wrong in practice for many years to come. This financial crisis is just too big for everything to go on as normal after the bust. The deleveraging process from the biggest property bubble in modern history is really just beginning. Be careful about finding yourself on the wrong side of this big historical trend. 4. Now this is really a vain hope, but I'm 38 now and when I was at uni, the things that people thought about were having fun, drink, love, study, and (in sober moments) career. We certainly did not spend our time talking about f**king house prices! It was a liberating time, and the freedom to move around each year, live in halls for the first year to get to know people, live with different people in dodgy rented gaffs and not worry too much about staining the carpet was a big part of it all. It's sad now that we've weighed down young people with the burden of future worries about being trapped without a chance to own their own home in the long term. It's my generation's fault and not yours, so don't take anything said on here towards you as hostile. I can't tell what will work out best for you, but really I hope you'll take a step back from it all, stick two fingers up to the property industry, then go to university and have the time of your life. Good luck!
  10. Well, I am a member of one of the so-called liberal parties you mention, and I argued your point myself on the doorstep at the time. The problem with your analysis I think is that the basic concept of dividing unionists into liberal or bigot and nationalists into peace loving or terrorist, is now out of date, and that election is when it really started to fall apart. Sinn Fein actively went out to court middle class Catholics and younger Catholics and did it by convincing them that it was seriously genuinely committed to peace. The DUP did the same on the Protestant side by gradually phasing out the bigoted stuff and becoming fully engaged in dialogue and talks and showing that it was serious about wanting a local executive. Even at that time they were both working hard to show they were moving towards the centre. If you didn't see that then you weren't looking closely enough. The voters were. An example of how the old classification I'm talking about literally fell apart is in the disastrous UUP slogan in that election 'decent people vote UUP'. Falling back on the easy assumption that you could hold unto nice middle class people by hinting that there was something a bit disreputable about voting for anyone else was rightly treated with contempt by voters. The fact was that the two 'liberal' parties were old, tired and disunited. They had held the line during the troubles, and they had done most of the heavy lifting in the previous decade of talks. Although this mean't that it was them that had set the agenda for the future, they were too exhausted and hollowed out to share in the benefits. All of the concessions and hard compromises that people felt hurt by were easy to lay at their door. DUP and Sinn Fein, on the other hand, were young, well organised, united and energetic. They could disassociate themselves from the long and messy Good Friday process while picking up the benefits of it and taking them forward. I agree that it's unfortunate that for this period of time politics has moved further way from an ideal where parties of real influence cross the religious boundary. Both of the biggest political parties now oppose more integration. DUP openly oppose integrated schools, while Sinn Fein do it more covertly (look up how many applications for transformation to integrated status of schools that Catriona Ruane has rejected). I think this is against the wishes of most voters. The people of NI have decided, for now, that the stability of the overall system is priority number one and that reforming NI society to make us more integrated is priority number 2. That is why I think we have who we have in power. However, when the system is well enough bedded in to be seen as unbreakable, Sinn Fein and the DUP will have a big problem. They will get old and tired too, and associated with sleaze, and their dark ages attitudes to religion and politics will eventually leave them as sitting ducks for a new generation of well organised politicians. They will have to either change or be replaced themselves. However SDLP, Alliance, and UUP will need to do more than appeal to some 'decent people' tag. They'll need to offer something new.
  11. Well we probably are, but it's the 'sweeping generalisation of an entire nation' bit that doccyboy mentioned that is what has upset people. I would have thought that was obvious. Surely anyone who lives here for any length of time realises that the NI people are just as pleasant and courteous and decent as people in other places (moreso maybe), but to a certain extent are prisoners of our peculiar history and politics. It should also be obvious that we are in a period of transition, and that the general direction we are moving in is positive. From that point of view, your intervention seems both mean spirited and dated. George Soros has an idea that applies here I think. The big idea that he has been pushing all his life and is really pushing now, is that economics is not easily predictable by normal mathematical methods or by studying what would be called 'rational' behaviour. He is not surprised at all that the theory of rational expectations that so much of modern economics is based on keeps failing spectacularly. The reason, he says, is that human behaviour is not 'rational', but 'reflexive' - people don't behave or think independently, they think and behave in a way based on their perceptions of how other people are thinking and behaving. This is how we get bubbles. Thinking reflexively does not make us bad people. It's part of what makes us human. Voting in an NI election is totally reflexive. If you asked any of us to come up with an ideal system of political parties here, virtually nobody would design what we have. But we all vote for what are the major parties now, because of our perception that anything else would be a wasted vote, and a less than perfect democracy is much better than no democracy at all. And of course everyone else is in the same boat. Having said that, the system that we have gives us a fair chance of climbing out of the reflexive hole that we dug for ourselves in the troubles. You can see it already with politicians who once would kill eachother working together on things, with all the major parties supporting the police for the first time. It's not ideal, but it's a start. You might think that the people who voted for DUP and Sinn Fein are extremists because they were thought of as 'extreme' in the past. Perhaps they voted for them because they sensed that these parties were more capable of delivering a long period of stability and partnership government. A solid partnership of strong opponents is maybe the best that can be hoped for at this point in history. Some sort of united governing party is not on the agenda right now, and the alternative of more violence is hardly that attractive. Looked at that way, the political choices of the NI people over the last few years looks pragmatic and realistic. It has also produced more stability than we have had in decades. I say this as someone who has never voted for either of those parties. But parties come and go. What seems unchangeable now can change. The old NI Nationalist party died completely and was replaced by the SDLP once upon a time. The UUP was once regarded as untouchable. It's not our generation who will finally turn NI into a completely healthy society. Hopefully it will be the next one, if we can give them a stable childhood free of the worst of the sectarianism and violence that we remember, they will be able to address the problems with more of an open mind.
  12. Loan to income on its own would not have stopped the latest boom because much of the increase was driven by buy-to-let speculation. The speculators' income was not generally relevant. The biggest speculators didn't even have proper jobs at all. It was all based on leverage of existing assets held. My point here is that loan to income applied thoughtlessly would disadvantage genuine buyers and give a bidding advantage to 'investors', reinforcing the unfairness already in the system. Couple that with the tax advantages for investors (as well as the tax avoidance that the more agile ones will engage in) and wink-wink nudge-nudge stuff that goes on between estate agents, banks and investors, and you could have a really crap situation for ordinary young people who just want to own their own home, with levels of owner occupation in that group stubbornly refusing to rise, or maybe even continuing to fall. I tend to agree that a visceral hatred of rising house prices by policy makers is a necessary starting point, because the details themselves will take time to work out. Probably you would want a combination of sensible loan to income rules, loan to value capping, as well as reform of the taxes on property to encourage home ownership and discourage speculation and multiple ownership.
  13. I think you miss the point here slightly about inflation being used to pay off debt. It's not just the literal paying off that happens when a worker gets a pay rise and so pays more tax and so government debt seems smaller. That's part of it but to see it more clearly you need to look at the bigger pictures. What you have in a situation of excessive debt is that a certain number of vested interests are in debt completely above their ears and can't hope to get out of it (GROUP 1 - government, banks, property speculators, overindebted middle class people). Another, larger group of people are not in debt and even have some money in the form of savings or businesses with strong cash flow (GROUP 2 - pensioners, poor people with no access to credit, prudent savers, young people saving for first house who have not taken the plunge, business people who actually make things and create wealth). Now, an inflationary policy is the means by which the GROUP 1 people conspire to steal money out of the pockets of the GROUP 2 people, without going to jail for theft. So what happens is they engineer a situation where there are negative real interest rates. This could be where interest rates are 10% and inflation is 1000%, so that savers and anyone with any money is transparently cleaned out and the debtors have their slate wiped clean. It could be done in a more covert and slow way over a period of 10 or 20 years. It can even be done as it is being done now. What you would need to do is engineer a situation with CPI inflation figures that look benign enough but still above target (say 3.2%), then make real interest rates negative by crashing them to 0%. Then set the agenda in the press and in policy making circles that 'deflation' is the real problem, and get everybody worked up about it so they don't notice that savers are being robbed. The reason this bigger picture is necessary is that people don't always 'pay' off the debt directly in the sense of handing over money. For instance the poorest people have no money to pay, but will they will pay later on by having much worse health and education services and benefits available to them. Workers will pay by being taxed more. Pensioners will pay by devaluation of their savings. First time buyers will pay when they eventually buy a house as the house price crash will eventually stall in an inflationary environment and so houses will remain much more overpriced than in a non-inflationary environment. The complexity of the results is exactly why inflation is the preferred method of dealing with debt. It obscures and distributes the consequences so far and wide that most ordinary people don't appreciate what's happening to them. Just think of it in terms of Gordon Brown stealing money out of your pocket. Then it becomes clearer.
  14. This is a great point, and it touches on both the economic issue and a broader one about the overall housing stock quality. There is this perception that what we should be building is a load of poky wee houses, squashed together as tight as possible so that first time buyers (after speculators have flipped them a few times) can pile into them. No-one questions whether this is a good use of resources or whether it adds to the overall quality of life of the country, or improves our townscapes. The result is decay in older areas of high density housing, shortage of high quality low density housing, and a future problem of low demand in these new-build areas when the shine wears off. The argument based on cost of build doesn't impress me at all. There are large areas of the UK where hardly any houses are built, and the population just stays more or less constant. So if it is uneconomic to build houses then it won't happen. Big deal. But as NI still in all likelihood has growing housing needs longer term then it will happen. However as Ride On correctly points out, there is abolutely no rule that says new builds must be bought by FTBs. The challenge for responsible and thoughtful planners and developers, if we had any, would be build housing stock which would be of a high enough quality to attract people currently living in decent enough older housing, but would like something more spacious/modern etc. That would improve the average housing quality, and free up enough property for everyone. But this is unlikely to happen soon. Builders have become hooked on building for an undemanding audience - desperate FTBs and speculators who don't give a f***. The idea that they would have to think about the real quality of life they are providing for the next generation or two would be too hard for them to get their head round. My view is that this generation of builders, developers and their bankers needs to be purged in a great extinction because they have become so corrupted by the boom that there is no value left in keeping any of them. It seems to be happening anyway.
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