People who planned for the crash, what happened in the end?

Into The Blue

Peregrinus wrote: »

I know one guy - an academic - who sold his house about a year before the crash because he thought the market was massively overinflated. He cleared his mortgage, banked the (considerable) surplus and moved himself and his family into rented accommodation. (And very nice rented accommodation it was, too - well-located, and much more spacious than the house he had sold.)

Then the crash came.

He remained in his rented accommodation for several years, demanding (and getting) annual rent reductions. Then he moved to other rented accommodation (again, very nice) which was more conveniently located for the kids' schools.

It was his intention to buy a house when he felt that prices had reached a rational level. However in 2011 he......

Thought you were a friend of mine till the uk bit..

In 2011 bought a house against all advice, then sold it earlier this year, again against advice, earlier this week they announce prices are falling in Dublin.

snowey07

I was advised circa 2007 by a friend of a friend who was an economist to stop looking and wait it out. Took the advice, saved a bit more and found a lovely place in 2011 in my ideal area that I never dreamed I could have.

The seller had inherited it and had a inheritance tax bill so took my second offer which was only 2k above the first. It was the lowest price the houses on our street ever went to

Villa05

Desmonddoyle wrote:

While I wouldn't doubt for a second the veracity of any internet anecdote, I do find it incredulous that a married person with kids would sell the family home and move them into expensive, rented accommodation on a hunch that a crash was imminent.

dubrov wrote:

Of course things were only just starting then. The property market ran away from him and he wasn't able to rebuy.

dubrov wrote:

You'd have to be pretty certain to gamble with your family's future like that.

The 110% mortgages were the catalyst for the crash. It was easy to see what would come after all the demand was soaked up after 1 or 2 years of this measure.

Northern Rock collapse

St Patrick day massacre of bank shares

There were loads of warnings 9f what was coming

macnug

Bought a house outside Dublin in 2005, by late 2006 I was convinced a big big crash was coming but took me a couple of months to convince my partner, in fairness to her we had just had our first child so I can understand. Sold the house in may 2007 to much bewilderment and in some cases anger of family and friends. They just couldn't understand why I would get off the property ladder, "sure there is going to be a soft landing" as far as they were concerned.


Rented for a couple of years then in 2013 bought a house from nama with the profit I had made with the first house. Its nothing special, just a normal 100sqm 3 bed semi and its further from Dublin than the last house but its totally mine, no rent or mortgage to pay.

whippet

while I can't say that we planned .. but we had a 3 bed semi in dublin that was bought in 2004 .. rented it out in 2011 and rented a bigger house elsewhere.

The mortgage was very small compared to what we could actually afford so holding on to it wasn't any trouble. In 2012 we were going to sell the NE house and use savings to pay off the NE but decided to hold on to it and use the savings to buy another house.

Picked up a fantastic house in the location we wanted for about 25% of peak prices .. and eventually sold the original house earlier this year at about the same price as what we paid for it originally .. giving a fairly decent cash lump sum.

Sort of worked out as I know there is no way i'd be willing to pay the market rate now for my current house.

JohnCleary

Walked into the first ever Allsop not knowing my arse from my elbow, bought an apartment in Galway City Centre. Had people jeer at me that I was a clown, and the bottom hadn't been reached. The funny story was that the winning bid (mine) wasn't a bid... I was scratching my head... was sh1tting it at the time (but had the cash so thought 'why not')

70 eur / sq. ft for a duplex (with attic), not including balcony or attic space obviously - biggest in the complex

Today, few apartments of single-story (so smaller, but still 2 double rooms) looking about 130 euro / sq. ft - However the convenience of having a converted attic for storage (not done yet) is worth a lot to me.


Go figure, I think I got the last laugh.

alastair

Into The Blue wrote: »

In 2011 bought a house against all advice, then sold it earlier this year, again against advice, earlier this week they announce prices are falling in Dublin.

Asking prices, that is. We'll need to wait for the CSO figures to see if sales prices actually fall.

Mellowbird

Interesting to hear all your stories. I wasn't paying attention at that time as I had no interest in property then but the friends and colleagues who are in negative equity I just assumed it took everyone by surprise.

firemansam4

I think I avoided getting myself into dept and negative equity by having reservations that there was going to be a big crash.
I bought my primary residence in 2003 and since then prices kept flying up at an extraordinary rate. In late 2005 my boss at that time advised me he could get me set up with a second mortgage on an investment property in Dublin, at this time I was working in the construction industry on a very good wage. I remember that I talked to him about this for some time and had reservations due to the fact I had a very bad feeling there was going to be a big crash just around the corner.
My thinking was that I seen houses and apartments being built everywhere as quickly and as poorly as possible, then there was an influx of eastern European workers coming over to help with the construction (Not that I had any issues with this) and in turn they were renting out the very same apartments being constructed. I thought to myself - What would happen if this starts turning and then some of the migrants also start going home as well, then this could turn into a viscous circle and an almighty crash.
My boss was of the opinion that he heard all of this said before about the crash but it never materialized and prices keep going up.
In the end I decided against the idea, and now when I look back at it, in the situation I am in now, boy i'm glad I listened to my own gut instinct on this one.

Sometimes I hear politicians and economists talking about how there was no way of knowing how bad the crash was going to be back in 2006/2007. And it kind of annoys me in the way that I was not an economist and didn't really have a great understanding of the property market, yet I kind of had a good idea of what was coming around the corner and that the signs were
painfully obvious in some ways.

Villa05

Mellowbird wrote:

Interesting to hear all your stories. I wasn't paying attention at that time as I had no interest in property then but the friends and colleagues who are in negative equity I just assumed it took everyone by surprise.

I suspect many of those people were pushed into to buying because of very high rents. A process that we are repeating aided by a government machine choking supply

handlemaster

what would be interesting is those who will do it again call the market

johnnyskeleton

My views on the market and my personal circumstances have not always coincided.

In 2007 I couldnt afford to get a mortgage so in that sense I suppose it informed my views that property was overpriced. I cant honestly say that if i was earning stupid money and offered stupid mortgages that my views wouldnt have been different however.

Between 2008 and 2010 I was trying to buy but the difference betweeN what I was offering and vendors expectations was too great. Looking back, houses that I offered say 160k for sold for 165k a year or two later.

Between 2010 and 2012 i kept looking at prices and was often the highest bidder but the properties never actually sold. I began to believe that the market was stuck and that if vendors could avoid a sale they would.

From 2012 to 2014 I saw prices going up but kept bidding on the basis that I wouldnt go beyond what made senseon a rent v buy calculation. My rent had stayed the same since 2010 so I assumed, incorrectly as it turned out, that I was paying the market rate. I was not. Eventually my landlord worked this out and told me he wanted the place back for his son to go to college.

At this stage, retnts had gone up by 50% and it was hard to find even a room to rent that wasnt gone within a few days or even hours of being put up. Working long hours made the rental search even harder as I just couldnt devote the time required to get a place to rent. The fact that I had built up my a fair amount of furniture in this time and was used to having my own place made renting a room less than ideal.

All this meant that I had to pay more than what I thought a proprerty was worth if I wanted to secure it. So I bought a smaller place for more money than I had intended. But that was still better than the horrible feeling of possibly having nowhere to live. Now the only way I can be moved on is if I decide myself to move or some act of god e.g. a fire.

If the property goes down by 10k it isnt so bad - thats how much i was paying in rent over my mortgage in a year. As it happens, a similar property sold this year for c. 35k more than I paid.

Do I think I paid more than the market value? Partially, I still think the prices are too high relative to salaries etc. However, by current rents the yields are 8-9%. I dont think current rents are sustainable either.

So on balance I was neither particularly clarvoyant nor do I have a hard luck story. I would like to think that a good salary and deposit could buy a nice house in a good suburb, but the market clearly does not agree with me at the moment!

catbear

Had been thinking about buying first property in 06, did the maths, read the Morgen Kelly piece and sat tight renting which worked out brilliantly. Got yearly reductions, was allowed to paint walls etc... It actually made happier about being a renter than owner.
Emigrated in 2011 as wife lost job, back this year but thankfully have a free house as a parent has gone to a nursing home, we'd be screwed otherwised. I hate that the rental market has gone ape**** again but I still wouldn't buy within the next two years.
Have a nice big deposit and being rent free at the moment we're happy to sit this out for the moment.

Hollister11

My parents sold in May 2008. Just in time to cash in. They had 3 other houses as well. The one we live in now. Its around 180K NE. They will never get the price they paid for it back. The other two are investments that they got cheaply in the early 90s.

dazberry

We bought in cash in late 2011. I'd been wiped out by the IT crash and only started to get back on my feet in 04. I had figured we'd see a more general recession after the crash, and I had no way of knowing that the 3 month contract I was on would ultimately last over 7 years, so expecting to go back to crash misery, I just kept shovelling every spare penny I had into the bank.

By 2010 with my GF (now wife) on the scene, between us we started looking, but seemed to still be coming up a bit short. I worked in a finance company and the bank related to them wouldn't even entertain me because I was on contract - even though we had at-least 80% of the asking price and I'd been there 6 years. That p1ssed me off no end but ended up doing us a huge favour by putting us back a year.

In 2011 a couple of interesting things happened. While the property price register hadn't come on line, Sherry Fitzgerald put up a list of their sale agreed prices - and while they didn't say what house was what - it wasn't hard to figure out, and suddenly the realisation came that we did have enough money, in fact we had more then enough. I also seemed to get a better handle of the relative worth around the area we were looking, so I started to ignore asking prices So sale agreed 2011, got keys early 2012.

That's how it panned out in the end, no great masterplan really.

D.

MysticalRain

Decided to emigrate in 2006, mostly for economic reasons. At the time, I could see one of two things happening: either house prices (and the cost of living in general would continue to rise) and I wouldn’t be able to afford to live in the country, or else there would be some kind of economic down turn similar to the 2001 crash I had experienced a few years earlier, except probably worse.

Unfortunately for me, I had to return home just in time for the worst of the recession due to ill health. Cue several years to unemployment. Then eventually I managed to get back on my feet. At the end of 2014 I got a sweet deal on a 3 bed bank repo apartment that I would never have been able to afford during the boom. So things worked out for me in the end.

Jaketherake

Started buying rentals in 2001 and over the next few years bought and sold a few.
I knew there would be a crash sometime, as its a cycle. Had no idea when or how.
When it did happen, I stopped buying but held on to what I had.
There were a few years rents went down, but was always able to cover the mortgages.
Now all of the mortgages are over 50% paid and there is a nice profit every year.
But im leaving as is instead of buying more like i had planned to.
And thats because the government get about 60% of all the rent that I collect, with only 40% left for me.

piperh

We were renting longterm and happy where we were so between 2006 and 2010 asked our landlord if they'd consider selling numerous times. Every time we were told no it wouldn't pay them, we knew they'd bought off plans at 180,000 in 2002 and our offers were in excess of 280,000 which was on a par with others on the estate.

So we waited another year then bought elsewhere bigger house more land and are mortgage free, houses identical in the same estate are now selling for 130,000 so in hindsight we are glad they thought the bubbble wouldnt end and said no :-D

I started work in a full time good pension job late 1999 in Dublin. I remember my supervisor over next couple of year advising me to buy then but I was too busy enjoying myself!

Property started to take off, because I worked in south Dublin , any amount of people were full of advice to buy a house. Anywhere from Wicklow to Gorey!!
I told everyone there was no way I was buying a big house somewhere I didn't want to live.
So I stayed renting in south Dublin and saving my money.
In 2009 I decided to buy, I had a large deposit & I brought a 3 bed semi in south county Dublin, for half what it was worth in the boom.
It did go down a bit, but its now worth more than I paid for it, plus my deposit & what I have paid off the last few years, I have a large amount of equity built up.

I plan to sell next year and buy somewhere else, where I'll be happy, in a smaller house.
Hopefully I'll have zero/very small mortgage.

I just lived where I wanted to live, rather than care about buying/investing in property.

mariaalice

Sold and brought in 2012 only because I was getting married and we wanted a bigger house and in a certain area the house need work, it and had been on the marked for two years with no buyers, within the last year the price of similar house has nearly doubled from what we paid and they don't stay on the market long. It was all luck and life circumstances that it worked out like that.

My husband grew up in Wales and came here in his forties and he was always very sceptical of house price here he had the outsider view which does help.