mulder
12-24-2008, 10:51 PM
I'm writing this thread for people who've overstretched themselves buying houses in countries where real estate hasn't yet dropped. If you brought your house in the 1950s for a few hundred pounds, then you are probably OK.
I have been following the World-wide real estate market since I worked as an Agent in the late 1990s. There are countries now where Real Estate is still increasing in price, (like Australia & Russia).
Prices in these countries WILL start to decrease very soon. I believe the main reason why prices haven't declined yet is that sellers won't go down in price, so only small numbers of houses are actually selling now & these sales are boosting the prices. (ie, market manipulation)
If you have have a high mortgage, then you should consider selling now - especially if you will still make a profit. This is because once prices drop, & you lose all your deposit you will be unable to buy another house, even at cheaper prices & lower interest rates! For example, once prices drop by 10% then that's your 10% deposit gone! (OK, I'm being simplistic with my math, but you see my point). If you have over-stretched yourself to buy the house, you won't be able to keep paying it off once you lose your job, or become sick, or have more children, etc. So it would be better to sell it now for a high price, than to wait until its repocessed by the bank.
The problem is that sellers become greedy & will wait in the hope of making profits. They need to be aware that its impossible to sell at the peak of the market, because the peak is only apparent after prices have dropped! Also, they shouldn't listen to the agent's lies. All agents want is their commissions - understand that agents will use their pet valuers who just mirror their valuation. They will send you to a pet mortgage broker who will give anyone a mortgage, so thay all get their undeserved commissions!!
So do your own research & read the Housing Panic blog -http://housingpanic.blogspot.com - for a full picture!
I have been following the World-wide real estate market since I worked as an Agent in the late 1990s. There are countries now where Real Estate is still increasing in price, (like Australia & Russia).
Prices in these countries WILL start to decrease very soon. I believe the main reason why prices haven't declined yet is that sellers won't go down in price, so only small numbers of houses are actually selling now & these sales are boosting the prices. (ie, market manipulation)
If you have have a high mortgage, then you should consider selling now - especially if you will still make a profit. This is because once prices drop, & you lose all your deposit you will be unable to buy another house, even at cheaper prices & lower interest rates! For example, once prices drop by 10% then that's your 10% deposit gone! (OK, I'm being simplistic with my math, but you see my point). If you have over-stretched yourself to buy the house, you won't be able to keep paying it off once you lose your job, or become sick, or have more children, etc. So it would be better to sell it now for a high price, than to wait until its repocessed by the bank.
The problem is that sellers become greedy & will wait in the hope of making profits. They need to be aware that its impossible to sell at the peak of the market, because the peak is only apparent after prices have dropped! Also, they shouldn't listen to the agent's lies. All agents want is their commissions - understand that agents will use their pet valuers who just mirror their valuation. They will send you to a pet mortgage broker who will give anyone a mortgage, so thay all get their undeserved commissions!!
So do your own research & read the Housing Panic blog -http://housingpanic.blogspot.com - for a full picture!