Softening house market?

nullzero

https://www.boards.ie/discussion/comment/119522869#Comment_119522869

I'm seeing a lot of this, most of these bidders turn out to be incapable of securing finance, although I'm not suggesting that's the case here but it is common.

Bass Reeves

https://www.boards.ie/discussion/comment/119522816#Comment_119522816

The Gardai will let you know it's a civil matter the same as a car collision.

Mr Hindley

Things seem to be quite uneven out there. A couple of properties that I've viewed / am about to view, the current offers are in at considerably below asking price, which surprised me. But then there was this one, where the offers were hovering around asking price right until the last minute, then shot up by 60k: https://www.auctioneera.ie/property/32-quinns-road-shankill-dublin-d18-ew42

StevenToast

There is no softening of property going on in Limerick...speaking to estate agent last night (just a general chat after running into him)...... any decent 3 bed semis between 250,000- 350,000 are gone in weeks...no shortage of buyers....

walterking

https://www.boards.ie/discussion/comment/119516537#Comment_119516537

Why is it sickening?

Bought late 2019 for €995k, (sale closed early Feb 2020) + legal fees + stamp duty. So circa €1,010k

Went to the market asking €1,125k. That's 12% higher than they paid over 2.75 years ago. About 4.3% appreciation per year - far lower than the national average.

That someone bid higher is neither here nor there. That's a nice bonus.

And the seller is most likely moving to a new property which they have most likely paid a higher price for too - so not real gain. And that why I can never understand the fear of falling prices. Unless you are selling and not buying, falling prices make little difference as the property you are subsequently buying has also fallen in price

Potatoeman

https://www.boards.ie/discussion/comment/119523415#Comment_119523415

That sounds like a fund, it’s too high to be an individual but even then it’s still very high. There’s already a property downturn in the US and these funds find themselves having to sell properties below what they paid for them.

https://therealdeal.com/2022/02/13/zillow-reports-880m-loss-on-failed-home-flipping-business/#:~:text=On%20average%2C%20Zillow%20lost%20about%20%2425%2C000%20on%20every,losses%20than%20it%20had%20expected%2C%20the%20company%20said.

First of many to come. You’ll probably see them selling property here too before a general crash. Too many being priced out just adds to it.

Pussyhands

https://www.boards.ie/discussion/comment/119522347#Comment_119522347

Strong chance imo you are going to wish you didn't do that.

DataDude

https://www.boards.ie/discussion/comment/119523458#Comment_119523458

It’s not about the individual seller, of course they’ve done nothing wrong.

It’s just further evidence of a housing market that continues to spiral out of control, locking more people out of ownership and creating an even bigger societal divide between those who own homes and those who don’t. That’s the sickening bit.

dragonkin

https://www.boards.ie/discussion/comment/119523225#Comment_119523225

I'm not so sure. You are the legal occupant, the landlord has the right to inspect it once every so often with advance notice but that's it, they have no right to access. Someone has broken into your house and modified it, breaking and entry, damaging property, trespassing etc.

If you look at RTB webaite they don't investigate stuff like this I'd say it would go to the guards.

https://www.rtb.ie/legislation-change/investigations-and-sanctions#investigate

pinksoir

https://www.boards.ie/discussion/comment/119523415#Comment_119523415

I was watching that one too. Was a couple of k over asking for the entirety and then flew up to 60k over in the last few mins of the auction/listing. The vendor even extended the listing by 2 mins at the end to try get more bids in.

Struck me kind of like the eBay thing where bidders come in in the last few seconds to try and snipe a lot.

This online bidding process has done weird things.

https://www.boards.ie/discussion/comment/119523707#Comment_119523707

I wasn’t intending to go down a rabbit hole with this. Was just a crude example to illustrate that if SF were to do what they say, it will be carnage for tenants of private landlords. And there’ll be a ton of illegal evictions as well as legal ones

walterking

https://www.boards.ie/discussion/comment/119523527#Comment_119523527

Its at the premium end of the market. It would have little bearing.

Too many people are fixated on the headline price and many other listen too much to those that are fixated on a headline price.

The whole term repayment cost is the only thing that matters and with interest rates probably going up by another 1% leading to a standard 5 years fixed going to 4%, that will cool the market.

eg - you could have fixed for 30 years at 2.5% last feb. The total cost of 300k mortgage over 30 years would have been 426k

Next Feb the chances are a 30 year fixed will be at least 4.25%. The total cost will be 531k.

The near certain mortgage rate increase alone is costing €105,000 over the life of the loan - but no-one seems to look at it that way!

Tow

Two semi d's near me went sale agreed for 300k over asking price in the last few weeks. So their is still a market at the higher end. In saying that a house in Leeson Street went up for sale a day of two ago for 3.5m, 1m less than it sold for during the tiger years.

Pussyhands

Online bidding should be regulated. There should be one site where online bidding takes place and bidders log in and are assigned an account number.

Then they should only allow a bidder to bid on one property at a time.

You could have a situation today where there's 2 houses, with 2 bidders and both bidders are trying to outbid each other on the other property thus driving prices up when there's no need to.

Jonnyc135

https://www.boards.ie/discussion/comment/119523890#Comment_119523890

We are going down the road of complete State intervention in everything. This also goes back to the 2008 crash, complete intervention with QE re inflate asset prices to keep the circus going. If anything we need to go back to a place where there is a small amount of state intervention in markets. I don't want to sound like Milton Friedman here but state intervention in the western world since the 2008 crash has been our downfall. We (western economies, in fairness to Ireland with austerity implemented it was pretty bleak) probably should have had a deeper recession back then and companies that operated poorly and over leveraged themselves should not have been bailed out. This may have taken an extra 10 years to rebuild but we would defiantly have a healthier economy for our future generations going forward.

The demographics show that the peak Bull market/ consumer spending was always going to be 2007, that's when the baby boomers the wealthiest generation of the modern world were going to hit peak spending and wealth at average age 40-55. Western populations on the decline now ever since so chasing GDP with a declining population and ageing population is never going to work. Instead western economies are actively using QE, low interest rates and state intervention in order to manufacture positive GDP numbers in order to give the impression that we are doing we well.

Pussyhands

https://www.boards.ie/discussion/comment/119523891#Comment_119523891

Prices will come down with interest rate rises and it may not make much difference to overall cost as you say.

But...lower prices with higher rates does mean your deposit goes further which means the list of potential properties you can buy is longer. Say someone has a 30k deposit. Last year they could maybe buy a house worth 300k last year. But if prices drop, you could then buy a house that was worth 350k last year as the price maybe dropped to 300k.

So while it may be the same overall cost, a price drop would increase the quality of house a buyer can buy.

DataDude

https://www.boards.ie/discussion/comment/119523891#Comment_119523891

Premium end of the market is linked to the wider market. It would be highly unusual to see a 30% rise in the premium end and for there to be no rise at lower end. It trickles down. The falied buyers priced out of that premium house will now all shift down to cheaper houses and eventually it’s the people at the bottom who get squeezed out altogether.

Point on interest rates is technically absolutely true. But the reality is (rightly or wrongly), very few people fix their mortgage for 30+ years. So the currently low interest rates will only help vast majority of buyers for next 3-5 years. So the headline price they pay absolutely matters for the vast majority. You could argue people should fix for longer. But that’s another story.

houseyhouse

https://www.boards.ie/discussion/comment/119523458#Comment_119523458

Surely people fear falling prices because they want to avoid negative equity/ losing the savings they invested as a deposit. If you have no mortgage or you bought at a much lower price or you never intend to move then sure, falling prices is not a problem. But if you bought recently and you’re not 100% sure it’s your ‘forever home’ then the worry is you could be stuck in a house that doesn’t meet your needs.

Pussyhands

https://www.boards.ie/discussion/comment/119524061#Comment_119524061

A lot of people on here say why would people care if house prices drop when they've bought. I think they fail to realise to feeling in peoples minds to continually know they bought at the right time. If I bought for 300k and then prices drop and I see a neighbour moving into a house the exact same that they bought for 250k post drop, it would annoy me to know I overpaid by 50k or whatever.

monkeybutter

https://www.boards.ie/discussion/comment/119524210#Comment_119524210

Is it anymore annoying than being so focused on possible drops in the future that you wait through the massive prices rises of the last 10 years

The right time to buy has already passed you by, you will be always be paying more or less than some neighbours, but they have a house to live in

circadian

https://www.boards.ie/discussion/comment/119524210#Comment_119524210

It's a very short sighted way to look at what is for most people, a long term or lifetime investment.

I bought my house for 100k more than the neighbours across the street. They got theirs in 2010 mine in 2015. I paid what I did because I felt it was worth that price at the time. If the price came down then fine I still paid what I felt was fine at the time.

Chances are following a dip in prices the value of my property will increase above the original buying point within a few years.

monkeybutter

https://www.boards.ie/discussion/comment/119524271#Comment_119524271

plus how long do you wait to for this 350 to 300 dip? Maybe it would have eventually have gone to 280

awec

https://www.boards.ie/discussion/comment/119524210#Comment_119524210

I think you're the one failing to realise that people just don't care what their neighbours paid. If you are annoyed that you paid 50k more than someone else then I am not sure property ownership is for you, your obsession with this will prevent you ever buying.

On any street in Ireland there are likely to be people living all of whom paid vastly different sums of money for the same house, and if you think any of them lie in bed at night wondering what Mary and Joe paid last year you are nuts.

People buy their houses and move on with their lives. For the overwhelming majority, once they've bought, they want nothing more to do with the property market, it's not something they track. They are not buying an investment, they're buying a home.

Pussyhands

https://www.boards.ie/discussion/comment/119524452#Comment_119524452

Clearly I'm not the only one thinking like this when you have sufficient number of NIMBYs blocking developments for that exact reason.

AySeeDoubleYeh

Part of it is that a lot of people believe/hope they're buying a first home rather than their forever home. So the prospect of a sudden dip post-purchase is terrifying to them because they fear that they'll be 'stuck' somewhere that won't be big enough for another child/isn't in their desired location/insert other reasoning here.

I'm not speaking to the credibility of the above view, just to its existence - it is quite prevalent.

Bass Reeves

https://www.boards.ie/discussion/comment/119524210#Comment_119524210

Why would they. Most people buying are renting at present. Let's say that it takes 3 years for that 50k drop to materialize. In those 3 years they would have paid nearly 45k in rent on a property costing 1200/month.

At present you can get a ten year fixed for 2.85% so a 300k loan will cost about 1350/month assuming they wait 3 years and take out a mortgage of 250k follow some of the projections here we say i mortgage interest rates went to 4.5% there . Mortgage repayments would be around 1300/ month.

Why would you be worried about a house losing 50k in value. The first person has three years paid off there loan. The second person who bought the house 50k cheaper has paid 45k in rent and is only 50-80/ month better off on mortgage repayments.

This goes back to the 2006/7 peak. Most people were borrowing at 0.75% (some even less) above the ECB rate.ya they had a few bad years but for the last 5 years they have only being paying back capital and the previous 5 years interest rates were 1.5-2.5%.

Who is better off the person who bought in 2006/7 or the person who bought in 2016

EOQRTL

House in a cul de sac here beside me in D16 up for sale for 570k for the last few weeks. It's an okay house nothing special usual 3 bed affair but it ain't budging. Similar houses around the area where going for 620k plus a few months back with the for sale signs up for only a matter of days.

Personally i'd be very careful about buying now and it seems many others are of a similar mindset.

DFB-D

https://www.boards.ie/discussion/comment/119523509#Comment_119523509

I agree completely and am amazed at the people who bid so much over asking.....

I do see some properties which went crazy at bidding coming back onto the market, so I assume some at least have had buyers remorse...

BTW general warning - never believe what an EA tells you, I have dealt with many over the years and rarely meet one who doesn't tell obvious lies. You cannot trust stated bids completely...

My advice walk away from high prices and let the fool who is bidding high buy it, if they exist.

awec

I am still amazed that it's 2022, we've had spiralling prices for about 8 years now, and people still don't understand that how much a house goes for over asking is completely and utterly irrelevant.

Bidding 100k over asking is of no consequence, it means nothing.

It's like the default position on this forum that if a house is listed for 400k, then it should sell for 400k, and if it sells for anything more than 400k it's craziness.

walterking

https://www.boards.ie/discussion/comment/119524061#Comment_119524061

That's the crux of the issue.

They have no issue buying a car for 50k and watching it drop in value the day after they take it from the garage.

I can show (and have shown people) where someone buying in 2007 with a 1% tracker at the height of the market was far better off than someone that waited until 2013 even buying at 35% less. It wasn't until the calculation had a price drop of over 40% that the 2012 buyer was better off and even then it was a miniscule difference.