Is there any point?

Abu94

House for sale for 160 000, literally someone bid to 210 000 in 2 days and I can guarantee that it is still increasing. Absolutely pathetic that someone is willing to bid such amounts for a ****ty 2 bedroom house that needs a complete renovation. I don't even see the point in trying anymore, literally some smooth operator will come and offer insane amounts over the asking price almost immediately. Are any houses even sold anymore at the asking price? When looking for a house I can immediately add an absolute minimum of 25% over the asking price. If nobody made such stupid offers then the prices would go down.

B.A._Baracus

It's a joke alright.
My friend was trying to buy a house last year in Dublin. Same thing happened as you. Bidding went up much more than original asking price. He just passed in the end as the price was not worth the house.

I am no expert in the matters of what causes recession. But didn't the banks giving out loans and people over-paying for houses attribute to it?

Yet here we are again...

GhostyMcGhost

B.A._Baracus wrote: »

It's a joke alright.
My friend was trying to buy a house last year in Dublin. Same thing happened as you. Bidding went up much more than original asking price. He just passed in the end as the price was not worth the house.

I am no expert in the matters of what causes recession. But didn't the banks giving out loans and people over-paying for houses attribute to it?

Yet here we are again...

Surely people throwing wild bids at a house will be picked up at the valuation stage. If it's not worth that amount then mortgage shouldn't be granted

Anyway, doesn't stop cash buyers

Abu94

B.A._Baracus wrote: »

It's a joke alright.
My friend was trying to buy a house last year in Dublin. Same thing happened as you. Bidding went up much more than original asking price. He just passed in the end as the price was not worth the house.

I am no expert in the matters of what causes recession. But didn't the banks giving out loans and people over-paying for houses attribute to it?

Yet here we are again...

Yep exactly the same scenario, I cannot bid anymore as the house is no way worth the price but yet the bids keep coming in. The house literally has all its windows and doors boarded up, thought ok there is no way anyone will bid above asking and here we are it bid all the way to the moon for a 100 year old house which literally needs a complete renovation. It's super annoying as it's a third house already that it has happened to so I can add minimum of 25% to the asking no matter the house or condition as there is someone always willing to pay way more than the house is worth. Just why?

NIMAN

Maybe the bidder is a cash buyer?

Its a hard thing to say that a house isn't worth X amount of money. If someone can afford it, and is prepared to pay a certain price, then its worth it to them.

To go at least €50k above the asking price shows they either really wanted this property, or that money is no option. Perhaps as you say they have got a mortgage and are spending foolishly, but that is where personal responsibility has to come into it. During the boom we had reckless lending and reckless borrowing. People have to accept responsibility for bad financial decisions too, something that was lacking during our last bust.

If the buyer of this house gets into financial difficulty because they spend a lot more than they could afford, then I just hope we don't hear another "its all the banks fault".

Also, is there not some sort of valuation needed to get a mortgage? In other words, the banks valuation of the property, if its €160k, then they won't let someone buy it for €250k, as they stand to take a big loss if the person defaults.

NIMAN

Abu94 wrote: »

Yep exactly the same scenario, I cannot bid anymore as the house is no way worth the price but yet the bids keep coming in. The house literally has all its windows and doors boarded up, thought ok there is no way anyone will bid above asking and here we are it bid all the way to the moon for a 100 year old house which literally needs a complete renovation. It's super annoying as it's a third house already that it has happened to so I can add minimum of 25% to the asking no matter the house or condition as there is someone always willing to pay way more than the house is worth. Just why?

Is it even worth €160K?

Abu94

NIMAN wrote: »

Is it even worth €160K?

I would have assumed that it's worth around that 150 to 160 but apparently not.

NIMAN

Its worth what someone is prepared to pay for it, I suppose.

Bigus

NIMAN wrote: »

Its worth what someone is prepared to pay for it, I suppose.

Or what's the site worth with planning and how much would it cost to build what's there with fees and contributions ? 200k l would build féckall in Dublin.
Just because stuff was sold below cost in recession , doesn't make today's prices illogical .

Abu94

Bigus wrote: »

Or what's the site worth with planning and how much would it cost to build what's there with fees and contributions ? 200k l would build féckall in Dublin.
Just because stuff was sold below cost in recession , doesn't make today's prices illogical .

Well the asking price was 160 so if the owner expected to get more why did he put the price at 160 instead of 200. It's the bidders that inflated the price and probably surprised the owner himself. The houses I looked at were not in Dublin.

Peregrinus

The fact that the house sold for 50,000 more than the asking price tells me that there were (at least) two people willing to pay substantially over the asking price. Which means (a) this is a freak occurrence, or (b) the asking price was based on a serious underestimate of market demand and, therefore, of market value.

hawkwind23

Bigus wrote: »

Or what's the site worth with planning and how much would it cost to build what's there with fees and contributions ? 200k l would build féckall in Dublin.
Just because stuff was sold below cost in recession , doesn't make today's prices illogical .

I understand what your saying here , fair enough.
However the stark reality is what sort of society we are shaping?
What is illogical is that we now live and work in a state where most mid range earners cannot afford to buy a home and that is being exploited by landlords who then charge rents that they cant afford either.
Im no expert but that is very illogical and unsustainable.

We should not as a nation simply accept that its just the way it is by accident

davo10

Why do people get hung up on asking price? It's just a guide figure based on imprecise unmeasurable parameters.

The owner and EA may hope that there will be a lot of interest in the property and that the property will sell for the maximum price achievable, but no one can know this for certain.

As already posted, the true price of the property is the maximum price a buyer is willing to pay for it and as supply is low, that price is rising all the time. It is naive to expect an owner to sell at the advertised price if there are multiple buyers will to pay much more.

You might see a run down shack, another person sees the house of their dreams in the area they want to live. An investor sees a house that can be done up and resold at a profit.

Peregrinus

hawkwind23 wrote: »

I understand what your saying here , fair enough.
However the stark reality is what sort of society we are shaping?
What is illogical is that we now live and work in a state where most mid range earners cannot afford to buy a home and that is being exploited by landlords who then charge rents that they cant afford either.
Im no expert but that is very illogical and unsustainable.

We should not as a nation simply accept that its just the way it is by accident

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

Abu94

davo10 wrote: »

Why do people get hung up on asking price? It's just a guide figure based on imprecise unmeasurable parameters.

The owner and EA may hope that there will be a lot of interest in the property and that the property will sell for the maximum price achievable, but no one can know this for certain.

As already posted, the true price of the property is the maximum price a buyer is willing to pay for it and as supply is low, that price is rising all the time. It is naive to expect an owner to sell at the advertised price if there are multiple buyers will to pay much more.

You might see a run down shack, another person sees the house of their dreams in the area they want to live.

So they are their own enemies by bidding sky high. They are responsible for property price increases.

Abu94

Peregrinus wrote: »

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

Doing nothing is always better

evolving_doors

NIMAN wrote: »

Is it even worth €160K?

It all depends on rental yield.

davo10

Peregrinus wrote: »

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

Dysfunctional? There is s supply issue due to a recession when developers didn't have money to build and banks wouldn't lend it. For 10 years we castigated builders and bankers for ruining our economy with cheap money and over supply, now we castigate them for not lending and not building.

The housing market is functioning exactly as every other market in history has, when supply is plentiful, prices drop, when supply is restricted, prices rise. Add in increased wages, rising confidence, difficulty renting and you have a market sector on steroids. But that is not dysfunctional.

Effects

NIMAN wrote: »

Is it even worth €160K?

If it's in South Hill, Limerick then no. If it's in Clontarf, Dublin then yes.

SteM

Peregrinus wrote: »

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

It's not difficult at all to I understand why it's dysfunctional. The fact is that irish people have an ingrained need to own their own property. Rent is 'dead money' we're told by all and sundry. This means we want to own our property. Things are completely different on mainland Europe. A lot of people there happily rent the same property for years on end.

davo10

Abu94 wrote: »

So they are their own enemies by bidding sky high. They are responsible for property price increases.

But this is like an other commodity which is traded, if two buyers want it, the higher bidder gets it.

You were willing to pay 160, if the property was advertised at 140 and another bidder lodged a 140 bid, would you have bid 160 to get it?

davo10

SteM wrote: »

It's not difficult at all to I understand why it's dysfunctional. The fact is that irish people have an ingrained need to own their own property. Rent is 'dead money' we're told by all and sundry. This means we want to own our property. Things are completely different on mainland Europe. A lot of people there happily rent the same property for years on end.

In many cases a mortgage is actually cheaper than rent. Also, due to the difficulty with finding rental properties, owning a house is appealing.

Abu94

davo10 wrote: »

Why do people get hung up on asking price? It's just a guide figure based on imprecise unmeasurable parameters.

The owner and EA may hope that there will be a lot of interest in the property and that the property will sell for the maximum price achievable, but no one can know this for certain.

As already posted, the true price of the property is the maximum price a buyer is willing to pay for it and as supply is low, that price is rising all the time. It is naive to expect an owner to sell at the advertised price if there are multiple buyers will to pay much more.

You might see a run down shack, another person sees the house of their dreams in the area they want to live. An investor sees a house that can be done up and resold at a profit.

2 bigger houses that are renovated cost 180 in the area. This specific house is smaller and as I have said it needs a full renovation. There is absolutely no way that you could make a profit after renovation.

Abu94

davo10 wrote: »

But this is like an other commodity which is traded, if two buyers want it, the higher bidder gets it.

You were willing to pay 160, if the property was advertised at 140 and another bidder lodged a 140 bid, would you have bid 160 to get it?

Yes but it went way over that, it increased by 50k which makes no sense and it is no longer affordable. If it was I would buy the bigger house in the same street for the same price that is renovated. They were willing to pay way over the top = property prices are high and will be high as there will be always someone willing to pay.

davo10

Abu94 wrote: »

2 bigger houses that are renovated cost 180 in the area. This specific house is smaller and as I have said it needs a full renovation. There is absolutely no way that you could make a profit after renovation.

Yes but prices have risen even in the last 6 months, some buyers like to renovate houses to the standard they want them and at this particular time you may have two buyers who really want to live in this area. You don't know the bidders nor their motives for bidding, but if that is the value the market now puts on that house, that is now what it is worth.

davo10

Abu94 wrote: »

Yes but it went way over that, it increased by 50k which makes no sense and it is no longer affordable. If it was I would buy the bigger house in the same street for the same price that is renovated.

It's no longer affordable to you, it is affordable to the other bidder. I'm sorry, but the value of a house is not what you are willing to pay for it, it is what the highest bidder is willing to pay for it. That is economics at its purest.

Abu94

davo10 wrote: »

Yes but prices have risen even in the last 6 months, some buyers like to renovate houses to the standard they want them and at this particular time you may have two buyers who really want to live in this area. You don't know the bidders nor their motives for bidding, but if that is the value the market now puts on that house, that is now what it is worth.

What maket? You mean idiots who want to overpay?

Abu94

davo10 wrote: »

It's no longer affordable to you, it is affordable to the other bidder. I'm sorry, but the value of a house is not what you are willing to pay for it, it is what the highest bidder is willing to pay for it. That is economics at its purest.

If I was a billionaire and bid 500k for every house in the area without question then that means that these houses are worth that? Outbidding everyone else. Yeah no ****ing **** I can't afford it being single.

Peregrinus

davo10 wrote: »

Dysfunctional? There is s supply issue due to a recession when developers didn't have money to build and banks wouldn't lend it. For 10 years we castigated builders and bankers for ruining our economy with cheap money and over supply, now we castigate them for not lending and not building.

The housing market is functioning exactly as every other market in history has, when supply is plentiful, prices drop, when supply is restricted, prices rise. Add in increased wages, rising confidence, difficulty renting and you have a market sector on steroids. But that is not dysfunctional.

A bubble followed by a slump is pretty much the epitome of market dysfunction, surely? A well-functioning market brings supply and demand into equilibrium; it doesn't oscillate wildly like this.

Peregrinus

Abu94 wrote: »

If I was a billionaire and bid 500k for every house in the area without question then that means that these houses are worth that? Outbidding everyone else. Yeah no ****ing **** I can't afford it being single.

But a billionaire won't bid 500k for every house in the area; what billionaire wants to build up a portfolio consisting of all the available houses in a particular area? And, even if he does, why would he decide to pay 500k for each of them? All he has to do is offer more than the underbidder in each case.

That's why I say that there was at least two people willing to pay 210k, or close to, for this house. If there were not, it would not have been bid up that high. And if that's an absurdly high price for a house of that size, type, etc in that locality, well, such a high price is not likely to be achieved in the next sale, since one of those two people is now out of the market, having bought the house of his dreams, and won't be bidding next time. So this could be just an aberration.

If it happens again and again, yeah, 160k was an undervaluation of this house in the current market.

SteM

davo10 wrote: »

In many cases a mortgage is actually cheaper than rent. Also, due to the difficulty with finding rental properties, owning a house is appealing.

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.