mfp123 Posted May 17, 2007 Share Posted May 17, 2007 would you be prepared to buy a house in the current market if the house you are looking at is already priced around 20-30% below the market price, and by market price i mean what similar properties have actually sold for in the last 1-2 years rather than just current asking prices. the dilema is that i do expect house prices to fall, therefore should you buy given that a 20% drop is what you could expect in a property crash anyway, or should you wait as the price could continue to fall, at the risk of losing out on this particular property, but then other opportunities will arise in a falling market as well. Quote Link to comment Share on other sites More sharing options...
Guest d23 Posted May 17, 2007 Share Posted May 17, 2007 would you be prepared to buy a house in the current market if the house you are looking at is already priced around 20-30% below the market price, and by market price i mean what similar properties have actually sold for in the last 1-2 years rather than just current asking prices.the dilema is that i do expect house prices to fall, therefore should you buy given that a 20% drop is what you could expect in a property crash anyway, or should you wait as the price could continue to fall, at the risk of losing out on this particular property, but then other opportunities will arise in a falling market as well. yes; in a heartbeat i'm not expecting falls far greater than that anyway and if i could get that now and start paying off the mortgage now rather than waiting another 2-3 years i'd be in there very quickly Quote Link to comment Share on other sites More sharing options...
rsootarsing Posted May 17, 2007 Share Posted May 17, 2007 yes; in a heartbeati'm not expecting falls far greater than that anyway and if i could get that now and start paying off the mortgage now rather than waiting another 2-3 years i'd be in there very quickly I will buy if and when I can buy something similar to what im in for 120k not the 180-190k it is currently valued at Quote Link to comment Share on other sites More sharing options...
Green Posted May 17, 2007 Share Posted May 17, 2007 (edited) I was just about to post a similar question, I guess what your asking (at least what I think your are wondering) is how much will property depreciate by. From the limited research I have done here and a few other places suggestions of a 20% crash when all said and done are not unrealistic. If I could pick up something with a 30% discount I would jump all over it based on my current limited research! Good post!! I will buy if and when I can buy something similar to what im in for 120k not the 180-190k it is currently valued at 30% off 190K would land you very close to your target of 120k, so I take that a yes to 30% but no to 20% Edited May 17, 2007 by Green Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted May 17, 2007 Share Posted May 17, 2007 I'm seeing 2-3 bedroom houses selling for 150-180K - when these are selling for 100-130K I will buy. Quote Link to comment Share on other sites More sharing options...
nohpc Posted May 17, 2007 Share Posted May 17, 2007 Depends how over valued the spot you are looking is initially. I wouldn't buy a place unless the IO was roughly similar to the rent. Quote Link to comment Share on other sites More sharing options...
TTID Posted May 17, 2007 Share Posted May 17, 2007 The crash is going to be an average crash, over an average time. There will be fantastic bargains before it begins. There will be overpriced nonsense after it's over. If you find one of the former and it works for you, you've just saved yourself five years of your precious life. I'm expecting to wait until about 2012. If I get a workable, reasonable opportunity before then, I'm in there, regardless of what the market is doing. I want a home to live in until I'm old. Don't give a rats what anyone would offer me for it between now and then. Quote Link to comment Share on other sites More sharing options...
skhudy Posted May 17, 2007 Share Posted May 17, 2007 A lot of people with a hug wad of cash in the bank would jump at buying if there was a significant drop in current prices. There are a lot of people who have been saving the last 5 years or so hoping for a drop so they can finally own their own pad. I think these people will slow any drop in prices when/if it does happen Quote Link to comment Share on other sites More sharing options...
Guest grumpy-old-man Posted May 17, 2007 Share Posted May 17, 2007 The crash is going to be an average crash, over an average time.There will be fantastic bargains before it begins. There will be overpriced nonsense after it's over. If you find one of the former and it works for you, you've just saved yourself five years of your precious life. I'm expecting to wait until about 2012. If I get a workable, reasonable opportunity before then, I'm in there, regardless of what the market is doing. I want a home to live in until I'm old. Don't give a rats what anyone would offer me for it between now and then. I will have to disagree with you there TTID, I think this will be a massive crash & possibly a prolonged one. When they are 50% off the asking price then I will wait for another 20%, then I might put an offer in. Remember different areas will get hit differently, I am talking aboot the North like yenah Quote Link to comment Share on other sites More sharing options...
Guest grumpy-old-man Posted May 17, 2007 Share Posted May 17, 2007 A lot of people with a hug wad of cash in the bank would jump at buying if there was a significant drop in current prices. There are a lot of people who have been saving the last 5 years or so hoping for a drop so they can finally own their own pad.I think these people will slow any drop in prices when/if it does happen you can't disguise you feelings, by putting the "when" first, you are silently stating that you think it will crash, it's all in the writing. Quote Link to comment Share on other sites More sharing options...
laurejon Posted May 17, 2007 Share Posted May 17, 2007 Something not be recognised here is this. Many people have put off buying over the past three or four years, and prices have since risen another 30%. To make it worse, had they purchased four years ago the would have a mortgage rate of 3%. Buy today, and you will pay nearly double that at around 6%, and the prices are 30% up. Put off buying today, and it could well be the case that house prices are down 35% in a year or so's time, however the mortgage rate which will cause that drop will be up maybe 100% at 12%. It could well be the case that the so called Sheeple come out with nice new knitted jumpers, and those that decided to break from the pack are fed to the wolves. Quote Link to comment Share on other sites More sharing options...
patprimer74 Posted May 17, 2007 Share Posted May 17, 2007 would you be prepared to buy a house in the current market if the house you are looking at is already priced around 20-30% below the market price, and by market price i mean what similar properties have actually sold for in the last 1-2 years rather than just current asking prices. If you're referring to a real possibility, then you need to explain why a property is being sold at '20-30% below market price'. Without further info, the answer would, I'd have thought, pretty obvious. Yes, I would buy/consider. However, you're either dealing with some hypothetical case or there's something rather odd going on. Like someone in an extreme rush to sell, someone with no idea of prices or some other reason. Please enlighten us. p Quote Link to comment Share on other sites More sharing options...
Hector's House Posted May 17, 2007 Share Posted May 17, 2007 Something not be recognised here is this.Many people have put off buying over the past three or four years, and prices have since risen another 30%. To make it worse, had they purchased four years ago the would have a mortgage rate of 3%. Buy today, and you will pay nearly double that at around 6%, and the prices are 30% up. Put off buying today, and it could well be the case that house prices are down 35% in a year or so's time, however the mortgage rate which will cause that drop will be up maybe 100% at 12%. It could well be the case that the so called Sheeple come out with nice new knitted jumpers, and those that decided to break from the pack are fed to the wolves. I have my eye on a place that is (currently) £125,000. Way overpriced for the area that it's in. I'm in the position to keep adding to my deposit wad and wait to see how bad things get. If I do make an offer some time on it the offer will be at least 30% below the current asking price. I would much rather have a mortgage in the region of £50,000 at an higher interest rate then taking on the risk of buying an overpriced asset and watch it's value fall. I'm hearing more and more tales of woe on the streets, and in my office of folks with tens of thousands of £££ of unsecured debts, folks going into IVAs and BTLers having to support their mortgages. This madness cannot last. Quote Link to comment Share on other sites More sharing options...
It is different this time Posted May 17, 2007 Share Posted May 17, 2007 To make it worse, had they purchased four years ago the would have a mortgage rate of 3%. Buy today, and you will pay nearly double that at around 6%, and the prices are 30% up. and that's why it is not different this time. HPI seems to be in a race with IR. Something's got to give and no doubt of the winner of that stupid race. Quote Link to comment Share on other sites More sharing options...
tara747 Posted May 17, 2007 Share Posted May 17, 2007 would you be prepared to buy a house in the current market if the house you are looking at is already priced around 20-30% below the market price, and by market price i mean what similar properties have actually sold for in the last 1-2 years rather than just current asking prices.the dilema is that i do expect house prices to fall, therefore should you buy given that a 20% drop is what you could expect in a property crash anyway, or should you wait as the price could continue to fall, at the risk of losing out on this particular property, but then other opportunities will arise in a falling market as well. No, I thought houses here were overvalued 30% AGO so I would not 'jump in'. A lot of people with a hug wad of cash in the bank would jump at buying if there was a significant drop in current prices. There are a lot of people who have been saving the last 5 years or so hoping for a drop so they can finally own their own pad.I think these people will slow any drop in prices when/if it does happen Wishful thinking, sorry! I have my eye on a place that is (currently) £125,000.Way overpriced for the area that it's in. I'm in the position to keep adding to my deposit wad and wait to see how bad things get. If I do make an offer some time on it the offer will be at least 30% below the current asking price. I would much rather have a mortgage in the region of £50,000 at an higher interest rate then taking on the risk of buying an overpriced asset and watch it's value fall. I'm hearing more and more tales of woe on the streets, and in my office of folks with tens of thousands of £££ of unsecured debts, folks going into IVAs and BTLers having to support their mortgages. This madness cannot last. I am in total agreement. Better a small capital debt with high IRs - any overpayments will reduce the capital owed much more quickly. Quote Link to comment Share on other sites More sharing options...
laurejon Posted May 17, 2007 Share Posted May 17, 2007 I am wholeheartedly an advocate of the "Houses will crash soon" brigade. But looking at it in the cold face of daylight, the straw to break the camels back is overdue by several years, I would suggest that something artificial is holding all this up. In Thatchers day, if business was not returning profits, then revenue would be down. This Government has created an artificial economy, its a manufactured economy whereby money is being printed and flooded onto the market in the form of debt. This debt is completely unmanaged, debt is being used to service debt, just how long can this continue?. Quote Link to comment Share on other sites More sharing options...
Guest grumpy-old-man Posted May 17, 2007 Share Posted May 17, 2007 (edited) I am wholeheartedly an advocate of the "Houses will crash soon" brigade.But looking at it in the cold face of daylight, the straw to break the camels back is overdue by several years, I would suggest that something artificial is holding all this up. In Thatchers day, if business was not returning profits, then revenue would be down. This Government has created an artificial economy, its a manufactured economy whereby money is being printed and flooded onto the market in the form of debt. This debt is completely unmanaged, debt is being used to service debt, just how long can this continue?. exactly, that's why a few on here (me included) think this will be the big one. edited - Edited May 17, 2007 by grumpy-old-man Quote Link to comment Share on other sites More sharing options...
FTB_73 Posted May 17, 2007 Share Posted May 17, 2007 We would probably buy if prices dipped 20% but only because i'm pregnant and feeling the whole 'nesting' thing come on. Financially I still think buying with 20% drops is stupid as the market is much more inflated than that. But i'd risk it to keep my hormones happy The reality is however that as long as its cheaper to rent our beautiful house than to buy it (even with an interest only mortgage which we would never get anyway) then our money stays put. Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted May 17, 2007 Share Posted May 17, 2007 We would probably buy if prices dipped 20% but only because i'm pregnant and feeling the whole 'nesting' thing come on. Financially I still think buying with 20% drops is stupid as the market is much more inflated than that. But i'd risk it to keep my hormones happy The reality is however that as long as its cheaper to rent our beautiful house than to buy it (even with an interest only mortgage which we would never get anyway) then our money stays put. Well done, a victory for rationality over thousands of years of evolution . Quote Link to comment Share on other sites More sharing options...
mfp123 Posted May 17, 2007 Author Share Posted May 17, 2007 (edited) part of the thinking is whether 20% is actually a lot for a price drop. a 20% discount puts the price back to 2004/2005 levels, but then prices in 2004/2005 i thought were pretty high already. obviously 20% is a good discount however, knowing that all im really doing is buying at 2004/2005 prices is that really such a bargain as would you really consider a 20% drop as a crash or would that be in effect just considered a fall back, and potentially further to go if a big crash does happen? most people would generally consider 20% as a crash however this would really just set us back to prices 2 years ago and for me,those prices were already too high. therefore part of me doesnt think it is a bargain as even 2004/2005 prices are still very high based on historical standards. Edited May 17, 2007 by mfp123 Quote Link to comment Share on other sites More sharing options...
polionamen Posted May 17, 2007 Share Posted May 17, 2007 if the asking price is 20 % below market price, then maybe it's telling you something ... Quote Link to comment Share on other sites More sharing options...
told_you_so Posted May 17, 2007 Share Posted May 17, 2007 No. When the mania is based on HPC and not HPI there will be enough sellers willing to drop the price more than 20% off today's actual selling prices in order to sell in the panic. Also, if the banks get rid of silly income multiples and ask for higher deposits (surely) then there won't be too many people able to get fresh mortgages for a place (apart from the few who have a decent amount of real money in the bank). Current debt levels in the UK... I would imagine (if the banks revert to sensible lending levels after getting burnt by lots of recent lending) that house prices should fall back to a level which is affordable on normal wage multiples (prob higher than the historical 3.5x, but no more than 4.5x). All guesswork though, depends how fast the herd bolts. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted May 17, 2007 Share Posted May 17, 2007 The crash is going to be an average crash, over an average time.There will be fantastic bargains before it begins. There will be overpriced nonsense after it's over. If you find one of the former and it works for you, you've just saved yourself five years of your precious life. I agree with TTID, except I won't wait until 2012 (which I believe will be the bottom) Once prices begin to fall there will be bargains and there will be stubborn sellers who refuse to accept that their house is falling with the rest of them. You won't wake up one morning to find all houses have been reduced by 20%. I will buy at 2003/4 prices. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.