Been waiting for prices to fall further..going to buy now..am I mad?

TheCityManager · 25-03-2009 12:03pm

All lot of the focus of this thread has been new houses..

But what about the second hand houses bought years ago for 50k ?? Now worth 400k+....these have HUGE scope to fall dramatically in price.....

quozl · 25-03-2009 12:36pm

EKRIUQ wrote: »

The only possible way the builder could sell is because he owned the land the house was built on and you can scream “don’t buy house prices are falling don’t buy” the people who did buy knew exactly what they were buying.

If you argument is that houses can't be sold for less than it costs to build them then it's incorrect.

If a builder goes bankrupt then his assets will be sold for whatever price can be achieved for them. If that is less than the costs of building the properties they will still be sold.

Creditors need to be paid what small percentage of moneys owed they can get.

And if you don't think this is likely, then:

Paddy Kelly, one of the biggest Irish developers, has declared in court that he has (much) greater liabilities than assets and may go bankrupt. http://www.irishtimes.com/newspaper/frontpage/2009/0317/1224242946902.html

Carroll, another big developer is trying to negotiate with his trade creditors to accept 40% odd write-downs on his debts to him. He also looks in serious financial straits.

I'd hazard a guess that most of the big developers are like this. I've believed this for some time, but it's only recently that things are moving from speculation to matters of public record.

If big developers like these go to the wall, then their assets will be sold for whatever. This may be less than the developers paid to build them.
Considering the price they paid for some prime patches of land, it's sure to be imo.

Also, crashes historically over-shoot the actual sustainable value of an asset on the way down. That's due to peoples fear of the asset after the crash.

I'll be buying again eventually, probably. I'm just trying my best to not mess up the timing, and I think we've a long way to go yet.

I also agree that there may be individual examples of decent value out there right now. I'd just expect those to be a lot more prevalent in a year.

gurramok · 25-03-2009 1:19pm

EKRIUQ wrote: »

Some people use a bit of intelligent reasoning when buying not just listening to a mantra “don't buy , house prices are dropping” by the uninformed.

The market decides the price, the market does not care what the cost of that house was to build in the first place whether it was in Leitrim or in Ballsbridge.

EKRIUQ · 25-03-2009 2:30pm

TheCityManager wrote: »

All lot of the focus of this thread has been new houses..

But what about the second hand houses bought years ago for 50k ?? Now worth 400k+....these have HUGE scope to fall dramatically in price.....

But these people probably have a very small mortgage and no pressure to sell so they will just stay put.

That’s why the biggest price drops will be with new houses with big mortgages and loan repayments

spockety · 25-03-2009 2:32pm

EKRIUQ wrote: »

But these people probably have a very small mortgage and no pressure to sell so they will just stay put.

Not if they're dead, or divorced, or emigrating, etc. etc., etc.

road_2_damascus · 25-03-2009 2:40pm

TheCityManager wrote: »

All lot of the focus of this thread has been new houses..

But what about the second hand houses bought years ago for 50k ?? Now worth 400k+....these have HUGE scope to fall dramatically in price.....

Talk to someone in construction, and ask how much it would cost to build a new medium size house from scratch compared to the cost of gutting and doing up an old one, you will find that there is little difference.. sometimes and inexpensive older house is really just an expensive site, thats what we were told when we were buying a few years back... take a look at this by the way http://www.treesdontgrowtothesky.com/

bobbiw · 25-03-2009 3:05pm

I wouldnt buy inIreland right now.

Maybe a 3 bed holiday home overlooking the atlantic that I could rent out to tourists. But then I would want a 50% return even with vacant periods.

Property in Ireland will fall for another few years, its not about what you advertise it for, its not that the guy down the street has his home up for 300 but you think yours it worth 350.

If he sells his for 200, it means his house is worth 200, it means yours could be a lot less.

People who bought after 2003 are basicly going to be in a mess, they bought homes that will devalue by anything, but I would guess atleast 50% and they will take a long time (10 -15 years) to get back to that.

If they bought after 2006, well, its a sunk deal, I dont think prices will be that high again in most peoples lifetime.

Unless the Govement are tactical and very shrewd and think long term, I think the Irish economy will never see more than zero growth again.

Best bet, dont buy, tell your landlord your thinking of moving but wondered if you could get a modest rent reduction and you will sign for another year.

Save as much as you can and wait it out. The days of houses costing more than 500k anywhere in Dublin (apart from d4etc) are well over.

Johnny Bitte · 25-03-2009 4:10pm

right now we have a 4 bed going for 185k.

so I should wait until 2011 to get it for 90k?!?!?

I cannot see how builders would sell a house for half of what it cost them to build it?

bobbiw · 25-03-2009 4:16pm

The_Goose135 wrote: »

right now we have a 4 bed going for 185k.

so I should wait until 2011 to get it for 90k?!?!?

I cannot see how builders would sell a house for half of what it cost them to build it?

Builders are full of crap, they can sell a house for anything. It doesnt cost 100k to build a house.

Regardless, just because someone wants 180k for a house doesnt mean they will get it.

EKRIUQ · 25-03-2009 4:35pm

The_Goose135 wrote: »

right now we have a 4 bed going for 185k.

so I should wait until 2011 to get it for 90k?!?!?

Why buy it at 90K :eek::eek: wait another couple of months and get it for 50K:rolleyes:

ntlbell · 25-03-2009 4:37pm

The_Goose135 wrote: »

right now we have a 4 bed going for 185k.

so I should wait until 2011 to get it for 90k?!?!?

I cannot see how builders would sell a house for half of what it cost them to build it?

how much is it costing them not selling it?

astrofool · 25-03-2009 4:43pm

bobbiw wrote: »

Maybe a 3 bed holiday home overlooking the atlantic that I could rent out to tourists. But then I would want a 50% return even with vacant periods.

I find it funny that you are demanding a 50% return on something in order to buy it. What is your money currently doing that it is earning anywhere near that rate?

People are being as stupid about house prices on the way down, as other people were as stupid about them on the way up.

bobbiw · 25-03-2009 4:53pm

I was just saying that is the only way I would buy in Ireland.

I think regardless prices are going to fall further, what will be scarey is that at the end of the year when the US starts to boom there will still be no building in Ireland.

jetski · 25-03-2009 6:24pm

EKRIUQ wrote: »

Why buy it at 90K :eek::eek: wait another couple of months and get it for 50K:rolleyes:

LOL heres the only house youl buy for 50k. lads grow up.

http://www.donedeal.ie/for-sale/caravans/878625

spockety · 25-03-2009 6:34pm

The_Goose135 wrote: »

right now we have a 4 bed going for 185k.

so I should wait until 2011 to get it for 90k?!?!?

I cannot see how builders would sell a house for half of what it cost them to build it?

If you're specifically talking about a house that a builder has now on the market for 185k, if it has still not sold by 2011 you can assume he has gone bankrupt and the bank are selling it for whatever the market will bear. If that's 90k, that's 90k, they will not let emotions get in the way of getting whatever they can for it.

bobbiw · 25-03-2009 6:35pm

jetski wrote: »

LOL heres the only house youl buy for 50k. lads grow up.

http://www.donedeal.ie/for-sale/caravans/878625

There are houses for sale for that in Ireland already. You can buy houses in Tallaght for less than 100k.

In many respects it doesnt matter if your trading up. So your house was worth 400k and is now 250, the 600k house is now 400 so its the same type of thing as when the boom was on but in reverse.

Its the FTB that will be hit hardest.

ntlbell · 25-03-2009 6:39pm

jetski wrote: »

LOL heres the only house youl buy for 50k. lads grow up.

http://www.donedeal.ie/for-sale/caravans/878625

if there is a 3 bed in tallaght going for 99k and we're only at the start of the drops

why would it be not possible to buy a house for 50k?

if my mother sold her house today for 50k she would still be in about 48k profit.

not bad

SouperComputer · 25-03-2009 7:32pm

The_Goose135 wrote: »

right now we have a 4 bed going for 185k.

so I should wait until 2011 to get it for 90k?!?!?

I cannot see how builders would sell a house for half of what it cost them to build it?

If you are buying, ideally the builder wont have any say, you will be buying from the bank that siezed it from them. Heres an example from across the water. Guy buys a house in '06 for 195K, misses payments, bank panics and sells in 07 for $150K. Happening a lot over here ( we were the benficiary in this example ).

It gets to a stage of damage limitation, what it costs is irrelevant. I think with the economy going the way it is in Ireland, the combination of empty properties and lob losses causing people being unable to pay the mortgage for their inflated property is going to have a compound effect.

OP, as to weather you should buy or not, really depends on the exact deal you are looking at. At a glance I'd say pass on the one you mentioned in your first post. Theres bound to be someone in a jam that needs to offload a quality property, and very few people are in the position you are in right now. Just because prices are falling does not mean you still cannot get yourself a great deal that may even do better than the "fall". With cash in hand, I'd be playing hardball with banks and builders, big time. Theres distressed properties out there and the list is only going to get longer for the next year IMO.

Best of luck!

SouperComputer · 25-03-2009 7:39pm

ntlbell wrote: »

if my mother sold her house today for 50k she would still be in about 48k profit.

not bad

After accounting for the sum of the payments made, inflation, transaction costs, legal and tax costs? If that is the case, then thats good alright.

Fighting Irish · 25-03-2009 8:16pm

bobbiw wrote: »

There are houses for sale for that in Ireland already. You can buy houses in Tallaght for less than 100k.

In many respects it doesnt matter if your trading up. So your house was worth 400k and is now 250, the 600k house is now 400 so its the same type of thing as when the boom was on but in reverse.

Its the FTB that will be hit hardest.

The FTBs with much smaller mortgages?

bobbiw · 25-03-2009 8:48pm

Fighting Irish wrote: »

The FTBs with much smaller mortgages?

I dont think some people get it, for prices to fall en masse and fall further to the levels that people expect the economic climate must get worse.

So the FTB will be hard hit because if they are lucky enough to still have a job (most wont) and if they are lucky to have enough take home pay (wait till taxes are 60%) they have got to hope that the banks will even look at them.

If I noticed a house that I liked in the Irish market that is currently 400k and it drops to 120k in thenext 4 years I would swoop in and buy it cash.

If the FTB can do that they are fine.

But I dont think for one second that Ireland is going to emerge from this recession before every other european country.

Gurgle · 25-03-2009 10:08pm

bobbiw wrote: »

There are houses for sale for that in Ireland already. You can buy houses in Tallaght for less than 100k.

:rolleyes:
Even the most desperate FTB will want a house that isn't occupied by a dozen heroin addicted squatters.

jetski · 25-03-2009 11:02pm

im not replying on purpose

ntlbell · 25-03-2009 11:14pm

Gurgle wrote: »

:rolleyes:
Even the most desperate FTB will want a house that isn't occupied by a dozen heroin addicted squatters.

what sort of utter nonsense is this?

Everyone in tallaght is a heroin addict?

cop on to yourself.

Freddie59 · 25-03-2009 11:28pm

jetski wrote: »

LOL heres the only house youl buy for 50k. lads grow up.

http://www.donedeal.ie/for-sale/caravans/878625

Maybe you need to grow up yourself. Market in freefall, falls of up to 30% more expected this year. If you're offering advice then at least let it be sensible.;):)

ntlbell · 25-03-2009 11:35pm

Freddie59 wrote: »

Maybe you need to grow up yourself. Market in freefall, falls of up to 30% more expected this year. If you're offering advice then at least let it be sensible.;):)

He doesn't need to grow up, just come out of denial.

it seems to happen as soon as you put a step on the ladder.

Senna · 26-03-2009 4:58am

jetski wrote: »

im not replying on purpose

From reading your posts since you bought that house your probably better of maintaining that attitude.

lods · 26-03-2009 8:03am

Since no houses are selling & banks are not lending, it’s very hard to judge how far the market has fallen. A house or rather a home is a long-term investment. If you find your dream home & want it will balance out over the life of the mortgage. A lot of people will just stay put & wait for the market to turn. House prices are probably close to the bottom, by that I don’t mean advertised prices. I mean, deals can be done & it’s a buyer’s market. You’ll always get certain houses that ill keep dropping i.e. The apartments in the middle of nowhere or in bad areas & lot of housing built in the “commuter belt” an hour and a ½ outside of Dublin.

the bolt · 26-03-2009 9:41am

leitrim lad wrote: »

no harm in making a start on your mortgage but shop around for your house ,dont be mislead by an auctioneer either, there is houses being sold by developers for as little as €50,000 for a finished 3 bed semi d .thats how bad the market is and if you have the money ready it is your market.

where are these houses?

the bolt · 26-03-2009 9:57am

EKRIUQ wrote: »

Why buy it at 90K :eek::eek: wait another couple of months and get it for 50K:rolleyes:

wait some more and he will pay you to take it off his hands.:rolleyes:

Been waiting for prices to fall further..going to buy now..am I mad?

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