How far will Sheffield house prices drop?

[jams002 10]

it is difficult to stay then your work is to far from your house,

 

 

 

 

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Aprilaire Humidifier

[BoroughGal 10]

http://www.telegraph.co.uk/finance/economics/houseprices/3547490/Property-prices-Average-house-lost-31500-of-value-in-past-year.html

 

 

 

How's that look to the "it's never a bad time to buy" brigade?

Still think that buying now is a good idea, when next month will probably be another 2% cheaper?

 

A recession can cause some short term beneficial effects for individuals. No one ever said that everyone suffers in a recession.

The ones who suffer the most are those that loose their jobs as companies go bust, so good advice would be to save the extra money that you find in your budget now, as next month you might be budgeting based on JSA.

 

It's still definitely a bad thing for the country overall.

 

Don't confuse house price drops with recession, the two may be related, but they are not one and the same.

 

Agree with recession being bad for the country overall, but I'm fortunate to be in a fairly secure job and the drop in the house prices has (overall) benefitted me. So, I object to basically being called stupid (not by yourself ) because my reality is different from someone elses. We're buying a new build and the builders are prepared to absorb a huge decrease on their previously OTT profits. So, percentage wise, we're bridging a gap and getting a bargain.

 

EDIT Sorry - bad form, I've not read your link yet, just responding generally to what's been said. Will view it now.

[Dimitri 11 10]

Dimitri. I think that you are really trying to convince yourself of this.

 

I want prices to come down but I am not deluding myself. Prices are coming down and ive formed my opinion on what ive found out. I will un-happily change my mind if somebody can make a valid argument as to why prices will not continue falling for at least the next 6 months - so far nobody has.

 

The facts show that house prices are dropping, it isn't my opinion. My opinion is that they will continue to drop for quite a while yet.

 

There are many differing opinions and we shall have to agree to disagree on this,

 

Ok no problem. Im sticking with the opinion that buying now without a big discount is crazy for FTB's.

 

but if you are renting, work out what you will pay and loose over the period that you deliberate for and ask why it wouldnt be better paying a mortgage off?

 

See post 35 as ive already answered this. Basically prices will need to drop by around 2.3% or LESS in the next 6 months for buying now instead of renting to be a good idea.

[Dimitri 11 10]

I can guess that prices will be lower in 6 months or a year and so you will save a lot of money by holding out for that long.

 

Thats the problem,you can guess,life aint all about guessing,thats pot luck,no one can say what prices will do over the next 12 months

 

Nobody is sure where prices will go but you have to look at the situation and make your decision based on what you know. It doesn't look like pot luck to me at the moment as to whether prices will continue falling or not.

[Misterf 10]

It's good to see some people trying to see the positives out of this recession, but for those people who think that they will not be effected they are being short-sighted. It will effect us all in the long run, unemployment up, lower tax receipts and in turn less public spending, the list goes on.

 

Lets hope todays 1% base rate cut helps someway. I still think house prices have a fair way to go though...

[Dimitri 11 10]

If i sell my house and i have dropped the price by £30.000 have i then lost money? yes... but if the house i purchase is dropped by£30.000, then have i lost money..no.

 

First time buyers who are renting only lose out if prices drop by around half as much as their rent (monthly or annually). If prices drop £6000 on a £100000 grand house in a year somebody paying £500 p/m rent still gains because they don't pay interest on the 6G. The £6000 off the house price is in reality £10000 - £12000 that the buyer won't have to pay because of the added interest.

 

First time buyers still at home only lose out if prices rise about twice as much as they can put away each month. As prices show no sign of stopping falling never mind rising it is unlikely if FTB's loving with Mama & Papa (or whoever) will lose out any time soon.

 

First time buyers could be advised to wait, but as i have said before, they may lose out if they have seen an house they wanted.

 

I would guess that all FTB's are going to find a similar house (in the same area) to the one they wanted and at a cheaper price IF the one they originally wanted is sold. It's a very small risk to be taken by waiting and when the upside of it is a saving of thousands of pounds it's a very small risk worth taking.

[Dimitri 11 10]

Most sales at the moment are 'distressed' in some way, either a repossession or someone having to sell for some good reason. Such sales have always been at below market values and were regularly about 10% of the market. Now they are about 80%, because others are not selling, and thus are skewing the official figures making falls seen to be dramatic.

 

There are going to be more repos and distressed sales next year when the recession and rising unemployment take hold. How are 'normal' sellers going to compete without suitably reducing their prices? Buyers don't care about the circumstances of the seller, the price is all important.

 

I know of a number of people who in a normal market would be moving but are staying put because of the lack of suitable mortgages and the turmoil in the market. These people will sell when stability arrives and will probably accept a 15% fall in the value of their homes.

 

When will stability arrive though and how much will prices have fallen in that area? All the sellers in that area would have had to have held off from selling and then all put their houses up for sale at 15% off peak price. Never going to happen - some sellers can decide not to sell but they cannot decide where prices are going to go.

 

Say for example a 3 bed terrace at Crookes in good order, a year ago valued at £165,000 tops. Take 15% off and you have about £140K. Now I know not all people would, but there is a strong rental demand in Crookes from young professionals and students. Students pay about £3k a year each, four students is £12k. Even if you have borrowed all £140k at 8% that rental income covers your mortgage and so puts a potential floor to the value of the house. Any talk of a 50% fall in an area like Crookes is therefore nonsence as at £80k value the rental return would be nearly 20% and every investor in the UK would want one.

 

Isn't the number of students renting in Crookes/Crookesmoor falling each year as newer student villages are being built for them? Ive only heard this and could be wrong. Prices are continuing to fall in Crookes and even if they fell 30% compared to a national fall of 50% it still makes no sense to buy now.

 

if you expect a real bargain then be prepared to buy something others wouldn't.

 

Errr, a house?

 

Best advice, location, location, location, buy what you can afford and remember its a home first and an investment second.

 

Didn't they also advise that house prices would only rise?

[Dimitri 11 10]

Example

Couple A and B rent a house at £600 a month = £7200 a year

They consider buying a house at £100,000.

If the house loses 5% of it's value in a year then that is the equivalent of £5000 so they may well still be better off buying a property and paying their mortgage off on their own house.

If it lost 10% that's £10,000 so they'd have to consider whether it would be better for them to wait a while or whether it would still be a good investment for the long term.

 

If this is just a random calculation of why some people might be better off buying now then it doesn't really work unless the figures are based on reality i.e. what area are you basing your above example on? I cannot think of any area in Sheffield where the average rent for a couple would be £600 and the average house price would currently be £100000. If there are some I will stand corrected but I don't think there is.

[Dimitri 11 10]

We know nothing but we are the ones saving money. I see!!!!!!!!!!!!!!

 

As opposed to who, FTB's? We'll be saving money too............. by waiting until we buy:hihi:

[BoroughGal 10]

As opposed to who, FTB's? We'll be saving money too............. by waiting until we buy:hihi:

 

I personally just like the fact that you used the word "too" in your statement. It's acknowledgement that maybe some of us, in certain situations, have done ok out of the fall in prices up to this point, and it wouldn't benefit some of us to wait longer. And that we're not all stupid to say as much (not that you said we were stupid, of course ;))

 

No doubt waiting is the right thing for some people too.

[Dimitri 11 10]

I personally just like the fact that you used the word "too" in your statement. It's acknowledgement that maybe some of us, in certain situations, have done ok out of the fall in prices up to this point, and it wouldn't benefit some of us to wait longer.

 

'Too' as in as well as Phyllis saving money out of the coming recession.

 

And that we're not all stupid to say as much (not that you said we were stupid, of course ;))

 

No I didn't actually. If you read my replies they were in relation to specific posts. Someone said now was a good time to get on the ladder (FTB's) and I stand by that being stupid. Someone said that buying a house in need of doing up was a good idea as you would still make money on it. Again I think that is daft as you will get the house cheaper by waiting and make MORE money. Lastly I was replying about buying now because renting was throwing money away and it only is if the prices drop by less than the monthly rent - they're not.

 

Maybe my posts were a bit cocky and i'll try to refrain from derogatory comments but you are taking them out of context by getting offended by them - I also said buying now was a good idea if you could get a big discount and you did, so you are choosing to ignore that part of my post.

 

No doubt waiting is the right thing for some people too.

 

In the main all first time buyers who buy now without a big discount and all people buying a house to make a profit who buy now without a big discount. Really if you look through this thread the arguments about why FTB's should buy now are because there may not be as much choice if they wait and you can never predict the future. These don't seem legitimate arguments at all to me and im going back on what ive just said above as tbh they're insane.

[sham71 10]

I cannot think of any area in Sheffield where the average rent for a couple would be £600 and the average house price would currently be £100000. If there are some I will stand corrected but I don't think there is.

 

Agreed.

 

Our house was probably worth 300k at the peak, more like 250k now. Our rent is £750 pcm.

 

The beauty of renting is that for a bit more rent you get a lot more house. ie, £500 might get you a 175k house, £750 gets you a £250k house, £1000 gets you a £500k house.

 

I owned from '94 to '05 and it was great as prices were ever rising. Now that prices are falling its great to be renting.

 

I especially like the bit where we compare how much the house has fallen in value compared to the rent we have paid.

 

I will buy into the market again in 2010/11.