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Lunatics In The Market - A Bit Of A Ramble

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Apologies for the long-winded post - just needed to let off some steam - I just can't believe how blind people are to the fact that the whole housing market is completely screwed.

Whilst I'm totally convinced that the crash is nigh, I'm looking to buy a home for my family for a number of reasons - stability, peace (from the nagging missus), etc. - the main thing being that whatever we buy now will be our family home for at least the next 20 years - spent long enough moving around - won't be heavily leveraged - so pretty well insulated from market movements for the next few years. I'm looking in the so-called Golden Triangle (Altrincham, Wilmslow, Alderley Edge) and have got to know the area pretty well.

First observation is that it's hard to see the gold in the triangle - mainly sh1tty brown with the odd bit of gold. Whole areas have sprung up on brownfield sites in recent years - dodgy build quality - and I've seen bigger plots in cheesy porn movies than these so-called "Executive Homes". From what I can see - there's a handful of streets in each of the 3 towns that could be called quality location - the rest is is just plain old mutton dressed as fresh lamb. People will tell you with a straight face that their house is worth twice what they paid for it 4 years ago "because it's Wilmslow/Altrincham/etc." - but get very offended when you ask them why it's been on the market for so long if it's such a bargain.

Second observation - houseowners have had their heads filled with so much [email protected] from EA's and the likes of Krusty Alsop that even a generous offer (within 90-95% of asking price) is met with contempt - "I passed on your offer to the vendor, however, he found it insulting" Not as insulting as I found his asking price. A classic example is 4 bed det on at 430K - been sitting there for at least 6 months+, EA tells me vendor may be willing to knock as much as a whopping ONE THOUSAND POUNDS off his asking price to get a sale - the market is truly buggered.

Needless to say there's so much [email protected] just sitting on the market that when anything half decent does come up for sale it gets snapped up. This in itself is not surprising - what has shocked me is the frenzy - a couple of times I've been gazumped - and if the EA's in question are to be believed - by 10-15K. Now, I happen to believe that a person who backs out of an agreed deal doesn't deserve my money, so I won't be drawn into a counter-bid no matter how good the house is - the simple facts are that in the current climate there are no bargains to be had - just that some are better value than others.

This leaves me gobsmacked by the sheer lunacy of people - in both cases where I got gazumped my agreed offer was 92-93% of asking price - not really a good deal but the best I could manage when dealing with nutters. The "other offers" would have taken it to 97-98% - something my best instincts tells me you only do when you come across a BARGAIN.

Maybe I'm just being tight and too fussy - but I lived through the last boom & bust cycle - in what's considered to be the one of the best parts of S.Manchester - and OK there may not have been wholesale price cuts - but it certainly wasn't pretty. Similar market sentiment as today at the peak followed by any kind of offer being grabbed with both hands when it turned - forget insulting - just be thankful we've got an idiot interested. Reports day and night of people stuck in N.E - I remember in places like Salford EA's offering "buy 2 for 5K, get one free" deals (no joke - it really was happening) and even then they weren't shifting. The main lesson I learned is that only buy at a price you can comfortably afford over the long term - if not now, then wait - there will always come a time when you will be in that situation - people who say "if you don't jump on the gravy train now no matter what the cost, you'll never get on" are only contributing to the madness and setting themselves and anyone who listens to them up for a lot of pain and misery.

I'm no economist, but I do know from experience that what goes up invariably comes down sooner or later - and all this stuff about it being different this time because of whatever reason is nonsense. Every time it's different - markets don't have brains, they don't make decisions for themselves - they are run by human beings and are subject to the flights of human fancy - so each time there's a boom and bust - yes it's different from the last - because we learn from our mistakes - we may not make the same mistakes again - but we compensate for this by finding new, improved ways of messing things up - and the people running the markets are only interested in numero uno - they couldn't give a flying f**k about waht's going to happen to Mr & Mrs Joe Bloggs who have just remortgaged their Executive sh1thole to 3 times it's true value and bought themselves a pair of his'n'hers X5's to travel between the portfolio of executive-squats-in-waiting that they're paying the bank for the priveledge of managing on the bank's behalf.

Just because Tony said "Things can only get better" back in '97 doesn't mean they have.

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Read your post, though quite long. I congratulate you for not being pulled into bidding wars

Take your time and don't be fished in to crap deals!

Just because Tony said "Things can only get better" back in '97 doesn't mean they have.

It didn't! It got a whole lot worse, especially for the poor to working class!

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