Jump to content
House Price Crash Forum
Sign in to follow this  
estat_eagent_ni

Estate Agent Ni

Recommended Posts

Hi folks

It has been some time now since I last posted and I thought I would drop by and let you know how things have been over the last few months. For those of you that have not read any of my previous posts you will see I was trying to give an honest opinion (please no abuse!!) of the market quite a number of months ago when other agents were continuing to talk the market up.

Up to now 2008 has proved to be a very difficult year for all concerned in the property business and quite a number of agencies have shut up shop. What I don't understand is what the majority of these agents did with all the profits they made over the boom years - I suppose bought over inflated properties and fancy cars? Ok - so that may be the case and I think we all need to think of the 'rainy days' that are often only around the corner. I expect to see more casualties before the end of the crash and I know that a number of the very big agents are finding things very tough at the moment.

As I may have said before I don't own 'investment properties' and have a number of family and friends that have not been able to get on the market over the last couple of years. Thankfully things are heading in the right direction for first time buyers and I think this is to be welcomed. Any market needs to be sustainable and the housing market here in the last few years has not been. I am advising friends and family only to buy at the minute if properties are significantly reduced in comparision to last year and only if they don't want to take a small risk and wait a couple more years. We are a nation of homeowners and I have owned and rented in the past - have always liked the idea of owning my own home but renting is a very sound option that is certainly attractive at the minute.

The market remains very slow at the moment and the only properties that we are selling are typically 30-40% lower in price than last year. That said if a house goes on the market at this type of reduction it is attracting interest. I think this will continue for the next 6-8 months with little selling. Part of the problem is that some agents continue to overprice houses. I have been out on a number of valuations recently and have come in 10%-20% lower than most agents and in one case 30% lower (this particular house I valued at £250 and went on with another agent at £325 - it was only a fair price even at £250k!!! - I note it has now dropped after 6 weeks to 270). That said there are people accepting what is going on and are making an effort with their prices - however, I still very much get potetial sellers saying 'but last year they got £xxx' or 'I need £xxx' - people are quite stubborn and it will take another 1-2 years for the memories of the boom to fade.

I must say I don't quite understand why agents are continuing to overvalue property - can it be that some genuinely believe they can 'keep prices high' and initiate a sellers strike like I remember one agent suggesting!! If this is the case they are deluded - I have some limited knowledge of ecomomics and know that there is a graph that shows prices are driven by demand and supply. When there is little demand and an over supply of a product prices go down - until an equilibrium is reached. At the minute we are some way from equilibrium.

As for the future I think we are seeing maybe 2-3% of houses at the minute that represent fair/good value (based on the current market) - the rest would appear to be overvalued and will inevitably come down in price. I expect to see some sort of normailty return to the market no earlier than 2010. This year will continue to see falls and some slower falls over 2009. I think more importantly that by 2010 we should see a return to standard differentials in an area -by this I mean we should get away from the situation were houses in the same street/area can vary in price by almost 40% for effectively the same type of house!!

Thankfully the comapny I work for is well run and professional (we really are not all the same) and although things are tough we are hanging in there and managing to run the business in the most difficult of times - something to do with not driving porsches!!! I look forward to the market getting back to normal and prices getting within the reach of first time buyers - our company will be all the stronger for it.

Bye for now.

Cheers

Share this post


Link to post
Share on other sites

Just curious about price differential in house type.

Are detached houses holding their price better and if so will their price reduce and what is the likely time drag?

Informative post as ever.

Share this post


Link to post
Share on other sites
Hi folks

It has been some time now since I last posted and I thought I would drop by and let you know how things have been over the last few months. For those of you that have not read any of my previous posts you will see I was trying to give an honest opinion (please no abuse!!) of the market quite a number of months ago when other agents were continuing to talk the market up.

Up to now 2008 has proved to be a very difficult year for all concerned in the property business and quite a number of agencies have shut up shop. What I don't understand is what the majority of these agents did with all the profits they made over the boom years - I suppose bought over inflated properties and fancy cars? Ok - so that may be the case and I think we all need to think of the 'rainy days' that are often only around the corner. I expect to see more casualties before the end of the crash and I know that a number of the very big agents are finding things very tough at the moment.

As I may have said before I don't own 'investment properties' and have a number of family and friends that have not been able to get on the market over the last couple of years. Thankfully things are heading in the right direction for first time buyers and I think this is to be welcomed. Any market needs to be sustainable and the housing market here in the last few years has not been. I am advising friends and family only to buy at the minute if properties are significantly reduced in comparision to last year and only if they don't want to take a small risk and wait a couple more years. We are a nation of homeowners and I have owned and rented in the past - have always liked the idea of owning my own home but renting is a very sound option that is certainly attractive at the minute.

The market remains very slow at the moment and the only properties that we are selling are typically 30-40% lower in price than last year. That said if a house goes on the market at this type of reduction it is attracting interest. I think this will continue for the next 6-8 months with little selling. Part of the problem is that some agents continue to overprice houses. I have been out on a number of valuations recently and have come in 10%-20% lower than most agents and in one case 30% lower (this particular house I valued at £250 and went on with another agent at £325 - it was only a fair price even at £250k!!! - I note it has now dropped after 6 weeks to 270). That said there are people accepting what is going on and are making an effort with their prices - however, I still very much get potetial sellers saying 'but last year they got £xxx' or 'I need £xxx' - people are quite stubborn and it will take another 1-2 years for the memories of the boom to fade.

I must say I don't quite understand why agents are continuing to overvalue property - can it be that some genuinely believe they can 'keep prices high' and initiate a sellers strike like I remember one agent suggesting!! If this is the case they are deluded - I have some limited knowledge of ecomomics and know that there is a graph that shows prices are driven by demand and supply. When there is little demand and an over supply of a product prices go down - until an equilibrium is reached. At the minute we are some way from equilibrium.

As for the future I think we are seeing maybe 2-3% of houses at the minute that represent fair/good value (based on the current market) - the rest would appear to be overvalued and will inevitably come down in price. I expect to see some sort of normailty return to the market no earlier than 2010. This year will continue to see falls and some slower falls over 2009. I think more importantly that by 2010 we should see a return to standard differentials in an area -by this I mean we should get away from the situation were houses in the same street/area can vary in price by almost 40% for effectively the same type of house!!

Thankfully the comapny I work for is well run and professional (we really are not all the same) and although things are tough we are hanging in there and managing to run the business in the most difficult of times - something to do with not driving porsches!!! I look forward to the market getting back to normal and prices getting within the reach of first time buyers - our company will be all the stronger for it.

Bye for now.

Cheers

Thanks for the update, be sure to keep us posted.

.

Share this post


Link to post
Share on other sites

Thanks for the update estat_eagent_ni, great to hear from you again.

If you're still an EA in a year or 2 when I'm buying I'll be PMing you because it's honest EAs like yourself that I'd like to do business with.

I'm sure that decent EAs like yourself that understand this situation will pull through this storm and prosper in the next few years.

Share this post


Link to post
Share on other sites
the only properties that we are selling are typically 30-40% lower in price than last year

Are these drops actually appearing on PropertyNews, or is it a case of houses being listed at high prices with 'offers around', and then buyers coming in with really low offers (which do not get shown on PropertyNews).

people are quite stubborn and it will take another 1-2 years for the memories of the boom to fade

- I get this impression as well. Most people still don't realize how overpriced things actually were (and still are).

Share this post


Link to post
Share on other sites
Are these drops actually appearing on PropertyNews, or is it a case of houses being listed at high prices with 'offers around', and then buyers coming in with really low offers (which do not get shown on PropertyNews).

Think this is most certainly the case. As I see it the average asking prices on propertynews are down by maybe 10-15% from the peak but the actual prices being accepted are another 10%-15% down on the asking prices. Still a significant number of houses being put on the market at inflated prices so it is difficult to get a clear picture on what the actual drops are.

- I get this impression as well. Most people still don't realize how overpriced things actually were (and still are).

Agree and the sooner we get back to thinking of a house as a home and not an investment then the sooner we get a healthy sustainable housing market.

Anyway that's me done for the next few months - will drop in again and give my thoughts as to how things are going in a few months time. As for now just glad that the boss is letting me have a few days off on holiday!!

Share this post


Link to post
Share on other sites
Think this is most certainly the case. As I see it the average asking prices on propertynews are down by maybe 10-15% from the peak but the actual prices being accepted are another 10%-15% down on the asking prices. Still a significant number of houses being put on the market at inflated prices so it is difficult to get a clear picture on what the actual drops are.

It's a shame that lower selling prices are not actually being published.

The sad fact of the matter is that 15% below the current values is still too expensive in my opinion.

Share this post


Link to post
Share on other sites
It's a shame that lower selling prices are not actually being published.

The sad fact of the matter is that 15% below the current values is still too expensive in my opinion.

Yes, when prices were on the up selling prices were bragged about, especially if the EA had bunged the house on the market for 30k lower than the last similiar house sold for, and then was able to legitately brag about getting 30k plus over the asking price!

Personally I think all asking prices should now be scrapped unless they are genuine. Maybe a sealed bid system would help encourage this practice of honest pricing, and if both the seller and buyer are legally bound then sales wo´nt collapse so easily. Many asking prices today are meaningless and rather than reflect the true value of the property, they instead tell a story of how long the property has been on the market, maybe since early 2007, and the current desperation of the owners & EA in trying to shift the house to get their money and their fees. Property has been left on the market at higher prices than could be achieved, and meantime snip, snip, snip some prices go down further every month. Prices on Property News are áll over the place, nobody knows a if some particular house is at a bargain or good price because todays bargain might be tomorrow´s rip off. Until asking prices stop falling so dramatically, and until dead wood property is withdrawn from the market in very substantial numbers, even with an improvement in the mortgage market the buying public won´t have the confidence to go out and buy - at any price.

Imagine if a big car manufacture slashed their prices to encourage sales. All the others would need to follow, a price war would occur, cars would devalue, people would be scared to buy because of the falling prices, the second hand market would be hit. People with car finance would be in negative equity...... This generally doesnt happen because the motor industry is smart.. What does happen is they give added value to the product instead, ie free insurance, free cd player, VAT free or whatever. Then, when the car market picks up again they stop offering so much, and the cars are still worth as much as they were.

Share this post


Link to post
Share on other sites

Amazing to see an EA with such views, well done, I hope you ride out the slump. Unlike one poster, I do believe you, the reason being that the other EA's just don't know this stuff, they work on the 'now' not on what makes sense. So their sales are down but they still sell the odd house so ' houses are still selling'. they do delude themselves aswell as sellers+buyers, along with some shoddy practices like not passing on low offers. They do believe they can manipulate the market, unfortunately they can slightly delay the inevitable, while at the same time putting themselves out of business.

Anyway to further throw in my theories on the economics/moralites of the housing market. I think the housing (Home) market needs to have approximately supply>=demand as having homeless people is not acceptable (mostly homeless people are so out of choice/mental illness). Number of empty homes is a good indicator for this and reported occasionally (currently 30-40K in NI). ie there is a house for us all with some buffer to allow people to chose where to live.

Taking that as a basis, in a free market we should all then live in a house roughly appropriate to our equity and salary (our accumulated contribution to society compared with others). The housing market is just a way to achieve this. So all houses should be similarly affordable to the buyer. In some ways you could almost think of a system where houses are free and we just get to move to a better house when our salary increases above inflation or we have been in the same one for a period. The base level could be taken as monthly payment 1/3 income or 3.5x salary mortgage, and below that level people will rent. (rent should always be cheaper than buying as it should be a business investment and take a period before becoming profitable).

This provides the monetary basis of a perfectish/fair system, anything that costs more than this is just wasting money and allowing investors to make money from home buyers for doing nothing (except by judging how many other investors are doing the same thing), not the basis of a sound economy.

In theory prices should rise a little to enourage building when here is a shortage, but I don't believe we have ever been there. The recent distortion in prices of course comming from banks giving out unaffordable mortgages to too many people, creating more buyers etc.

Share this post


Link to post
Share on other sites
Amazing to see an EA with such views, well done, I hope you ride out the slump. Unlike one poster, I do believe you, the reason being that the other EA's just don't know this stuff, they work on the 'now' not on what makes sense. So their sales are down but they still sell the odd house so ' houses are still selling'. they do delude themselves aswell as sellers+buyers, along with some shoddy practices like not passing on low offers. They do believe they can manipulate the market, unfortunately they can slightly delay the inevitable, while at the same time putting themselves out of business.

Anyway to further throw in my theories on the economics/moralites of the housing market. I think the housing (Home) market needs to have approximately supply>=demand as having homeless people is not acceptable (mostly homeless people are so out of choice/mental illness). Number of empty homes is a good indicator for this and reported occasionally (currently 30-40K in NI). ie there is a house for us all with some buffer to allow people to chose where to live.

Taking that as a basis, in a free market we should all then live in a house roughly appropriate to our equity and salary (our accumulated contribution to society compared with others). The housing market is just a way to achieve this. So all houses should be similarly affordable to the buyer. In some ways you could almost think of a system where houses are free and we just get to move to a better house when our salary increases above inflation or we have been in the same one for a period. The base level could be taken as monthly payment 1/3 income or 3.5x salary mortgage, and below that level people will rent. (rent should always be cheaper than buying as it should be a business investment and take a period before becoming profitable).

This provides the monetary basis of a perfectish/fair system, anything that costs more than this is just wasting money and allowing investors to make money from home buyers for doing nothing (except by judging how many other investors are doing the same thing), not the basis of a sound economy.

In theory prices should rise a little to enourage building when here is a shortage, but I don't believe we have ever been there. The recent distortion in prices of course comming from banks giving out unaffordable mortgages to too many people, creating more buyers etc.

I don't plan to become a regular on this forum, but I think you should buy now if you find a vendor willing to sell to you for what you feel is a 'safe' price.

The selling situation has worsed greatly over the last six months in that buyers have dried up so the achieved selling prices have had to be lower than previous. This next six months is a good opportunity to buy, no immediate hurry, but there is such a great choice available now. Even in your wildest dreams there are more properties for sale now than you could have thought, this brings you huge choice. The sluggish movement of the market gives you opportunity, financial pressures on some vendors, and the general feeling that things could get worse before they get better gives yet more power to your elbow. You have the chance to barter down prices now like never before.

Why wait until the market improves again for vendors, and gets worse for buyers?

I've read the comments often enough to know that some people will not agree and will blast me, but I also know that there still remains a buyer culture here in this country, it's just that the buyers don't want to buy in case they lose capital. If you can buy at the right price, can afford the mortgage, then there is no reason to wait. Everything else you buy loses you money, including cars, food, clothing, electrical, etc and renting. History has prven that you won't lose in the long run if you buy and keep for long enough. Apart from a very small percentage of people who bought property at the height of the boom are the only ones to have lost money on their homes, everybody else in NI has nothing to worry about simply becaise the prices they would have bought for were far lower than at the peak. I know several old people who paid only a few hundred quid for their homes. I've a four bedroom house I paid £150k for seven years ago, worst case senario it's worth £350k today, if I'd sold at the peak I'd have got a lot more, but I'm not bothered because I won't lose any money. If Iwas buying again now it would take a lot longer to make as much equity, but then again we had just come out of a generation of civil unrest, were property here was consitantly far cheaper than in similiar cities in these islands, but I certainly wouldn't think of renting. The cheapness of the property here, propegated a strong buyer culture since WW2. for the past couple of generations renting was for the really poor, everybody else bought. Prior to WW2, hardly anbody bought property, renting was acceptable, affordability was unheard of.

The troubles here kept prices here artficially low for so long that we got used to being able to buy. This has not been the case in similiar regions in these islands, affordability for anyone with a job ceased to be a possibilty long ago.

The fact that so many people now believe that renting until houses get cheaper is such a good idea, is an indicator of how when the herd runs in one direction, you should look at other options because you can't all be winners, most of you will get there too late as usual.

Anyway, if you see the home you want, then go for it, if they say no try somewhere else. Someone will say yes to your low offer, and if you get a purchase at a good price, a mortgage you can afford, you will be glad you haven't wasted your money feeding a landlord. If prices do drop a little more before they stabilise, then don't worry they will go up again, you won't lose out, lifelong homeowners never do, longterm homeowning defeats inflation everytime.

The price only matters on two occasions, 1. when you buy and 2. when you sell. The in between bit does not matter. Somebody should explain that to the hyper press i this country who herd everbody in one direction or another whenever they fancy.

Edited by vision

Share this post


Link to post
Share on other sites
I don't plan to become a regular on this forum, but I think you should buy now if you find a vendor willing to sell to you for what you feel is a 'safe' price.

The selling situation has worsed greatly over the last six months in that buyers have dried up so the achieved selling prices have had to be lower than previous. This next six months is a good opportunity to buy, no immediate hurry, but there is such a great choice available now. Even in your wildest dreams there are more properties for sale now than you could have thought, this brings you huge choice. The sluggish movement of the market gives you opportunity, financial pressures on some vendors, and the general feeling that things could get worse before they get better gives yet more power to your elbow. You have the chance to barter down prices now like never before.

Why wait until the market improves again for vendors, and gets worse for buyers?

I've read the comments often enough to know that some people will not agree and will blast me, but I also know that there still remains a buyer culture here in this country, it's just that the buyers don't want to buy in case they lose capital. If you can buy at the right price, can afford the mortgage, then there is no reason to wait. Everything else you buy loses you money, including cars, food, clothing, electrical, etc and renting. History has prven that you won't lose in the long run if you buy and keep for long enough. Apart from a very small percentage of people who bought property at the height of the boom are the only ones to have lost money on their homes, everybody else in NI has nothing to worry about simply becaise the prices they would have bought for were far lower than at the peak. I know several old people who paid only a few hundred quid for their homes. I've a four bedroom house I paid £150k for seven years ago, worst case senario it's worth £350k today, if I'd sold at the peak I'd have got a lot more, but I'm not bothered because I won't lose any money. If Iwas buying again now it would take a lot longer to make as much equity, but then again we had just come out of a generation of civil unrest, were property here was consitantly far cheaper than in similiar cities in these islands, but I certainly wouldn't think of renting. The cheapness of the property here, propegated a strong buyer culture since WW2. for the past couple of generations renting was for the really poor, everybody else bought. Prior to WW2, hardly anbody bought property, renting was acceptable, affordability was unheard of.

The troubles here kept prices here artficially low for so long that we got used to being able to buy. This has not been the case in similiar regions in these islands, affordability for anyone with a job ceased to be a possibilty long ago.

The fact that so many people now believe that renting until houses get cheaper is such a good idea, is an indicator of how when the herd runs in one direction, you should look at other options because you can't all be winners, most of you will get there too late as usual.

Anyway, if you see the home you want, then go for it, if they say no try somewhere else. Someone will say yes to your low offer, and if you get a purchase at a good price, a mortgage you can afford, you will be glad you haven't wasted your money feeding a landlord. If prices do drop a little more before they stabilise, then don't worry they will go up again, you won't lose out, lifelong homeowners never do, longterm homeowning defeats inflation everytime.

The price only matters on two occasions, 1. when you buy and 2. when you sell. The in between bit does not matter. Somebody should explain that to the hyper press i this country who herd everbody in one direction or another whenever they fancy.

Lots of fun, Vision. Not sure what your vested interest is. Your house ownership doesn't seem like it would be enough to make you write this stuff because as you say you are not at any real risk of negative equity. Let us know.

Some points :

"I think you should buy now if you find a vendor willing to sell to you for what you feel is a 'safe' price."

- Technically this is correct, but you are probably assuming that lots of chumps will think a so called 'safe' price is something that is cheaper than last year by a particular amount, 10%, 20%, whatever. Last year is not relevant. By all means buy at a safe price, but do it by multiplying average income (£25k?) by the lower end of historic price/income multiples (3) to get the average house price - £75k ish. Then look at the house you are buying and add or subtract. Ex council flat, divide by at least two, approx £35k. 4 bed detached, maybe a lot more at £125k to £175k, depending on the area. To be sure it is really a safe price, you may want to knock another 10 to 15% off to allow for prices overshooting on the way down as they did on the way up.

Why wait until the market improves again for vendors, and gets worse for buyers?

- Waiting for that situation may take 10 years as in Germany or 18 years as in Japan. More likely it will be more than the shortest recorded property crash I have found in the last century (2 years, England early 1990s), but less than the longest (Japan 1990 to now). We don't know how long but, we know that property crashes don't just happen and then things bounce back and we all go home for tea. It's crashing prices for a certain number of years followed by stagnation for a certain number of years, followed by a return to normal gradually rising prices after all of the change has worked its way fully through the system.

"you will be glad you haven't wasted your money feeding a landlord."

- On the contrary. Landlords are massively subsidising tenants at the moment, giving them somewhere to live that costs about half an equivalent mortgage, and protecting them from rapidly falling prices. A typical owner of a terrace is losing net worth on the investment at a rate of thousands of pounds a month, while getting back only a small amount, some or all of which will get eaten up by costs of owning such as occasional decorating, interest payment on the loan. The generous landlord also takes the risk of voids eating further into the value of his investment.

Share this post


Link to post
Share on other sites
I think you should buy now if you find a vendor willing to sell to you for what you feel is a 'safe' price.

I agree with you 100%. My 'safe' price however is 50% less than current asking prices. Are you saying I should offer this? They'll just tell me to get lost.

I'll just wait a few years, then buy a house at a price I can actually afford.

Why wait until the market improves again for vendors, and gets worse for buyers?

Hurrah, the old 'don't miss the boat' tactic. Scare people into taking on mountains of debt. Thing is, that trick only worked when prices were going up. Even the people that believed that rubbish when prices were going up are going to have a hard time believing it when prices are going down.

Share this post


Link to post
Share on other sites

Vision - some of the points you raise are valid and calling the bottom of the market is, quite frankly, impossible unless you're really lucky. I know I wont be able to - I accept that. However, consider these facts:

- house prices are still well above historic norms (even when you factor in an offer 10-15 % below asking price);

- the consensus is that we're entering a possibly lengthy recessionary period;

- ftb affordability is at an all time low due to unfathomably high house prices & tighter lending standards;

- people are experiencing other price pressures and possibly a fall in their standard of living.

Therefore I think that in the short to medium term (I'm talking 2 - 3 years) prices will continue to decline, by how much is anyones guess, but I tend to find myself agreeing with Joe and others in that the overall price decline will be substantial and painful for alot of people. I know someone who I care about who bought just after the top of the market - when they were being fed the line that it was a buyers market and they should "snap up a bargain quick" before the tables turned. Only now they're in negative equity - despite offering below the asking price. It makes me really mad. :angry: I dont intend to repeat their experience.

It is true to say that property here was cheaper but it was cheaper for lots of reasons, not just the civil unrest that we experienced (our peripheral location; our less stingent planning laws etc). Yes, we've had economic improvements but they are not so significant as to justify the enormous price rises we're seen - I know my wages haven't risen to reflect the 'booming economy' and I'm prepared to bet that yours haven't either (unless of course, you're an EA). For most people this is still fundamentally a low wage economy which can by no measure jusify the fantastic price increases we've seen.

I wont be entering the market until I see real value returning and it hasn't happened yet.

Share this post


Link to post
Share on other sites
The price only matters on two occasions, 1. when you buy and 2. when you sell. The in between bit does not matter.

Thats over simplistic. The in between does matter on various levels. For example, it will impact the house owner's access to additional credit. Furthermore, buying in a falling market can significantly impact upon a person's mobility i.e. if you are in negative equity, there's no point looking for a job in another city ... unless you have capital elsewhere, you're physically trapped where you are for the foreseeable future.

I know someone from Scotland who moved to NI for work reasons and, stupidly, bought here at the height of the boom. She works for a bank and obtained a 100% mortgage. By my reckoning, if she tried to sell her house now, she'd probably be in negative equity to the tune of circa £100k, which is over 3 times her gross salary. Her mother, back in Scotland, is sick and she wants to return home to care for her. Can she do that? No way.

Just two other comments:

By the way, buying at the wrong time can have very serious consequences. In downturns following previous housing booms in markets that are much bigger and more mature than the NI housing market, it has sometimes taken well over a generation for the market to recover in nominal terms alone.

I used to have a dislike of renting too. However, I've sold up in NI and am currently living abroad. I return to the UK at start of 2009 and, since I'm fortunate to be in well paid employment, I could afford to buy but I am not going do. I'm going to rent instead. This is for reasons of mobility (I'll likely be moving between cities over the coming 5 to 6 years) and also value i.e. when I was trying to sell my house in NI and having difficulty doing this, I considered renting it out ... so I checked the websites to see how much was being asked in rental terms for similar houses. I was amazed just how low these amounts were (compared to the cost of housing) !!!! So I will definately rent.

I am something of a speculator (I've sometimes been very successful, sometimes unsuccessful) and I take risks to achieve high capital growth .... but, IMO, there's no value in the NI housing market at present, nor will there be for quite some time.

Share this post


Link to post
Share on other sites

I think I'll pass on the negative equity thanks and use the next 1 - 2 years to build up a bigger deposit while house prices continue to decline, I think NI house prices will be down 30% from peak by December and I think a decline of at least 20% in 2009 is very possible.

The end of 2009 may be a great time to buy (putting in a lot of very low offers) I'm pretty sure we will be in the panic/fear stage by that time because we'll be in a recession and unemployment will be rising fast.

I don't think anyone here will "Miss The Boat"

We'll be the first people to spot the first signs of recovery, plus I believe that house prices will stagnate for many years once they reach the bottom anyway so there is absolutely no rush to buy right now.

The people who desperately need buyers right now are Estate Agents, many of them will go out of business imo.

Share this post


Link to post
Share on other sites
yeah seen their site before...well spotted ;)

Their prices look very reasonable compared to what a lot of other EAs are charging, fixed fee of £950 is pretty decent imo

Share this post


Link to post
Share on other sites
Their prices look very reasonable compared to what a lot of other EAs are charging, fixed fee of £950 is pretty decent imo

You mean their fees are reasonable... the prices being asked for the houses sure aren't!!!

:lol:

Share this post


Link to post
Share on other sites
I don't plan to become a regular on this forum, but I think you should buy now if you find a vendor willing to sell to you for what you feel is a 'safe' price.

The selling situation has worsed greatly over the last six months in that buyers have dried up so the achieved selling prices have had to be lower than previous. This next six months is a good opportunity to buy, no immediate hurry, but there is such a great choice available now. Even in your wildest dreams there are more properties for sale now than you could have thought, this brings you huge choice. The sluggish movement of the market gives you opportunity, financial pressures on some vendors, and the general feeling that things could get worse before they get better gives yet more power to your elbow. You have the chance to barter down prices now like never before.

Why wait until the market improves again for vendors, and gets worse for buyers?

I've read the comments often enough to know that some people will not agree and will blast me, but I also know that there still remains a buyer culture here in this country, it's just that the buyers don't want to buy in case they lose capital. If you can buy at the right price, can afford the mortgage, then there is no reason to wait. Everything else you buy loses you money, including cars, food, clothing, electrical, etc and renting. History has prven that you won't lose in the long run if you buy and keep for long enough. Apart from a very small percentage of people who bought property at the height of the boom are the only ones to have lost money on their homes, everybody else in NI has nothing to worry about simply becaise the prices they would have bought for were far lower than at the peak. I know several old people who paid only a few hundred quid for their homes. I've a four bedroom house I paid £150k for seven years ago, worst case senario it's worth £350k today, if I'd sold at the peak I'd have got a lot more, but I'm not bothered because I won't lose any money. If Iwas buying again now it would take a lot longer to make as much equity, but then again we had just come out of a generation of civil unrest, were property here was consitantly far cheaper than in similiar cities in these islands, but I certainly wouldn't think of renting. The cheapness of the property here, propegated a strong buyer culture since WW2. for the past couple of generations renting was for the really poor, everybody else bought. Prior to WW2, hardly anbody bought property, renting was acceptable, affordability was unheard of.

The troubles here kept prices here artficially low for so long that we got used to being able to buy. This has not been the case in similiar regions in these islands, affordability for anyone with a job ceased to be a possibilty long ago.

The fact that so many people now believe that renting until houses get cheaper is such a good idea, is an indicator of how when the herd runs in one direction, you should look at other options because you can't all be winners, most of you will get there too late as usual.

Anyway, if you see the home you want, then go for it, if they say no try somewhere else. Someone will say yes to your low offer, and if you get a purchase at a good price, a mortgage you can afford, you will be glad you haven't wasted your money feeding a landlord. If prices do drop a little more before they stabilise, then don't worry they will go up again, you won't lose out, lifelong homeowners never do, longterm homeowning defeats inflation everytime.

The price only matters on two occasions, 1. when you buy and 2. when you sell. The in between bit does not matter. Somebody should explain that to the hyper press i this country who herd everbody in one direction or another whenever they fancy.

I can say that I have tried this at the start of the year, sellers and EA are not willing to listen to the offers I am prepared to give, ie approx 25% below asking. And my estimates are gradually reducing (about 50% now). Yes plenty of choice but not in price they were all convinced the market will recover as we have never really had a crash here before. 5 out of the 6 houses we put offers on are still for sale 6 months later. The one that sold was already priced low as it needed gutting (completely), but I'd guess that the new owners have still paid too much.

I am not worried about losing capital, I am worried about paying too much and getting poor value for money. Most of us have to fund mortgages from our salaries, whatever we don't spend on houses is what we have left for other stuff. I agree speculators trying to use their own homes as investments are bad, and that once you have made the decision to buy you should not care about what happens to prices after. This is not the same as NOT buying because prices are too high.

It is true that property here was cheaper than across the water, as were wages, and yes probably due to the political situation. However I have watched prices rise above wages since 1995 (ceasefire) but wages have not risen by the same amount. Ironically we are now poorer owners than we were during the troubles. I believe that house prices can only, on average (over periods of 20years or so), increase at the same level as wages, anything outside that is either boom or bust.

Those who are stupid enough to pay current prices even with 5%-10% off, cannot get mortgages, those of who can are not prepared to buy. The inbetweeners represent the very small number of actual sales.

When you talk about feeding a landlord, well I'd rather feed his business if he bought 20 years ago, than paying 4x the amount and feeding the bank instead. With a mortgage most of the money goes to the intertest and in many cases nothing goes to the payoff. And when prices are reducing you are not losing money by renting that you would have otherwise made on equity increases in purchase. If you know prices are reducing you should not buy unless you have a good idea of where the bottom is and include a good margin in your offer (unless you have money to waste).

The fact is that you, like other EA's, don't seem to accept that house prices are unaffordable (5x salary) and the market will not recover until they are affordable (3.5x salary). The banks have taken away the money for all, and not likely to return for a long time. Its nothing to do with investment potential worries. The reductions we have seen are piddlely so far.

If EAs want to survive they need to advertise lower prices, personally I am not prepared to put in that much effort when every offer is knocked back. It is a big emotional+time investment to decide on a house and place an offer, I could only manage 6 and I did start out with the intention of carpet bombing with offers. After a fight over every offer we gave up and are now renting a house of >2x the value we were looking at buying, for a fraction of the mortgage. I am nearly sure 2 or 3 of the offers where not put through.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.