Current public sentiment towards the housing market?

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Savvy said:
I'm looking at buying in a midlands town,3/4 bed +needs a bit of modernising, cost is less than 250.
Appears to be a quiet mature area(my words not the EA).
I suppose, its the mortgage that is scaring me, it will be almost double my rent, but then again my rent is very low, 600/month for a 3 bed detached house.
I agree with you on Salthill but the prices are savage there. I lived in Glenard Cresent for while and the houses there were not without issues.
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Hard choice. The only thing i can say is remember the saying 'the day you buy is the day you sell' . Do you think you would have no problems selling the property. Then you might be fine.

Have a look at similar properties. Could you now get a better deal than before. You have up to the time of signing to fully decide and up to then I'd be researching the market well.

I am not familiar with the midlands so can't really advise more than that.

Yeah i know knocknacarra well.(gf) Was bidding blind on a house there earlier this year but was severly outbidded. If you bought in that area (closer to salthill than knockn) in 2005 you would have done well.
 
The house would sell easily enough if it was given a little TLC and placed on the market.
I'll just have to contemplate a little more over the coming weeks.
Likewise I bid on a house in Knocknacarra earlier this year and actually went sale agreed but surveyors report explained why the house was on the market so long. So needless to say I didn't proceed with that.
 
Savvy said:
The house would sell easily enough if it was given a little TLC and placed on the market.
I'll just have to contemplate a little more over the coming weeks.
Likewise I bid on a house in Knocknacarra earlier this year and actually went sale agreed but surveyors report explained why the house was on the market so long. So needless to say I didn't proceed with that.
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Exactly. Don't rush into any situations or feel pressurised into signing.
 
Savvy - Don't go putting too much weight into what you read here - use it is a (small) informing factor in your decision, but in the whole scheme of things you are still listening to people who care more about backing up there entrenched views than actually looking at things logically...

You mentioned the "fear of the big morgtage"... Everyone on this thread will agree with a doubt that Interest rates will increase from 3% to 4% in about 12 months (maybe 9 months) and that they will easily be at 5% in 20 to 34 months. 1% increase equates to nearly €140 on a250k mortgage over 25 years... Things might increase sooner or later - but my time frames are pretty sensible...
In 2 years time will you be able to tolerate a €280 increase per month in your mortgage?

Do you wish to upgrade in the coming years? If you do and the market crashes - will "being stuck" in this house effect your quality of life or do you see this as a home for the future?

Bottom line - worst case scenario if the a*rse does fall out of the market could you afford a min of €300 extra a month in payments (possible even €500 extra) and will you be "happy" in the house you've bought? If you can afford it and you will be happy in the house work away....

As was siad in a previous post weigh up the pros and cons as you - the informed person in the situation sees them... Whatever you feel is right, go with it.. Have the guts to go for buying it or have the guts to pull out. As an old football manager of mine said - If I loose this final it will be with my own tactics, not the tactics people think I should be using...
 
Delboy,
Naturally it will be my decision but still I'm interested in hearing other people thoughts on the matter. They can give insights in to what you yourself have not thought of.
I am well aware of the rate increases that are very likely down the line. Hence the reason that I'm not mortgaging over 300K(which I have approval for) on a house.
 
Savvy said:
Delboy,
Naturally it will be my decision but still I'm interested in hearing other people thoughts on the matter. They can give insights in to what you yourself have not thought of.
I am well aware of the rate increases that are very likely down the line. Hence the reason that I'm not mortgaging over 300K(which I have approval for) on a house.
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The only thing is that your mortgage payments will go up. That is near a definite now. But your rent will not. So if you are paying say 1350 next year you would be saving 750 by just paying rent. You would need to get this 750 working for you in order to offset any unplanned increases in house prices. But then again with a mortgage you are reducing the original capital.
Hard choice.

But there is a joy in owing a house which cannot be measured by money.
 
delboy159 said:
Savvy - Don't go putting too much weight into what you read here - use it is a (small) informing factor in your decision,
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Excellent post, it is worth remembering that few of the posters here are unbiased! ;) that goes for bulls and bears.
 
Being reading this thread for quiet a bit and it seems quiet difficult to put a timeframe on things turning bear. They will its just a matter of time.

However to put a little bit of personal exp on this, I have been over in California every 3 months for the last 3 years and I can't believe how quickly the market has changed here.

One year ago (even 6 months ago), houses where hot cakes. Very few people had a bear mindset. However one year later main stream media is reporting on a market slow down - as far as San Jose goes they are reporting building inventories in most areas. Not too much on price drops yet - though it is reported in one or two area.

The reason for this
1. Rising intrest rates
2. Fuel prices - people are less willing to commute long distances
3. Quality of life - see above

On top of this areas with poor schools are as well as far from centers of work are being hit first - location, location, location.

My personal opinon is that its a taster of things to come... The shock for me is how quickly the market has turned.

Oh and another funny thing is how realators work practices are having to change over here with gas prices soaring they will no longer take tyre kicks to view a property (over here you have realator work on your behalf who take you to see properties)... bit of a kicker if you are trying to talk up a market!
 
comanche said:
The shock for me is how quickly the market has turned.
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History has shown many a time that rapid changes in bubble markets are the norm rather than the exception. In fact, bubble markets by their very nature head southwards very rapidly.
 
comanche said:
On top of this areas with poor schools are as well as far from centers of work are being hit first - location, location, location.
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Location, Location, Location will be the mantra of trade-up buyers this season. Property prices in desirable areas (D4 D6 D3 etc) will rocket from demand by couples with young childern. As school starts up again, it will get many people thinking as to where about they would want their kids to be educated.

The biggest hit in property prices (Redo's Mixed Theory (MT), all credit to 2Pack) might infact come from, 3 beds with attic conversions, 4 beds semi/detacted, large 3 bed penthouse/apartments, all situated within mixed developments. Also developments that charge management fess and contain an element of social housing won't be immune.

EDIT

This would be a classic example
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A few more

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redo said:
I don't see how prices falling back to 2002 levels could destroy the economy.
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Someone who lives in a 1 million house with no mortgage - millionaire. Market drops 20% - now worth 800k - no longer a millionaire. History shows this person will cut back on expenditure and save more to try to recover the "loss of wealth". This cutback by lots of people means a big fall off in business and with it jobs. Witness Japan where even with 0% interest rates few would borrow money.

Secondly we output 100,000 housing units which would fall to normal levels of say 60,000. Thats alot of bank staff idle, construction supplies and building staff. The demand for holiday homes etc could fall even further depressing building outside the big cities even more.

Thirdly the govt finances drop massively - one example would be that the 40,000 drop in housing starts would cost it about 80 million a week.
 
Maine said:
Someone who lives in a 1 million house with no mortgage - millionaire. Market drops 20% - now worth 800k - no longer a millionaire. History shows this person will cut back on expenditure and save more to try to recover the "loss of wealth".
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Why???
 
Simple case is a person of 55. This person now does not worry too much about his pension as he can sell the house for 1 million, buy a place in country / spain for 250k and bank 750k and the interest on this is say 30k a year. Drop the house price by 250k and he only banks 500k. Interest drops to 20k. He will feel less wealthy and will cut back to try to increase his income.

See the saving rates in Japan and Germany where housing has fallen - huge.
 
ivuernis said:
Why???
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Its human nature. Just gone through this on a small scale myself for the first time.

Shares I had bought at 8 euro went up to 19 euro. (About 10,000 profit) So I'm already spending the money in my head, thinking big ticket items holiday etc.

But it even effects small day-to-day expenditure, go for a couple of pints or treat some mates to a good meal and think 'Sure its only a few bob, I'll sell a few shares and its covered'.

Then the price fell to 16 euro. Now I'm still up 100% but the attitude changes to "I've lost 3 euro a share:(" not "I'm up 100%:D" . So you start to question if you can afford the holiday. And can't go out for a meal every night, maybe cut back on the pints for a while.

Only a small example but I think one that may explain how a housing crash will effect consumer confidence.
 
Negative Wealth Effect Explained to the Bewildered and [broken link removed]

Its because of this that I have always advocated a short sharp correction period of no more than 3 years (and preferably 2) with no pissing about by politicians.

The bubble should be burst rather than gently deflated...which could drag on for bloody years :(
 
RugbyBoy said:
more bad news frm the US - but it won't happen here. Ireland is unique;)

http://business.timesonline.co.uk/article/0,,8210-2332487,00.html
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Imagine the surprise if The Irish Times started to refer to the Irish housing market as a bubble. They (the IT) will have to capitulate at some stage I suppose , embarrassing denial and being expected to be taken seriously are uneasy bedfellows. Oh to be a fly on the wall when the editorial decision is made to report the blindingly obvious.:D
 
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