leighbloke

Please tell me where I can get a pair of Ragnar Shaggy Pants from?

thinking_about_it

I don't know. Some towns may well do slightly better than others, and some countries may fare relatively well. Perhaps the best way to judge for yourself would be to rent in Mallorca for 6 months and get to know the local market.

Mortgage securitisation is key to the bloated housing markets in the western world.

Back in the good old days, your local bank manager cared whether you could repay your mortgage. They would only lend at about the historical average, say 3.5x your salary - this ensured that you would be able to repay the mortgage and your local bank manager would be able to get his bonus.

Then came along a new invention - 'mortgage securitisation' - the bankers found they could package mortgages together in the thousands into a bundle, otherwise known as a Mortgage Backed Security (MBS). These were then sold onto pension funds, insurance companies, etc. Suddenly, the bankers couldn't care less whether you could repay your mortgage - all they cared about was volume, they earned their fees from how many MBS they offloaded to the suckers. As long as you had a backbone, you could get a mortgage at e.g. 7x your salary - the bankers immediately offloaded your mortgage, and went onto constructing the next bundle. This securitisation process played a large part in the large bonuses bankers have recently 'earnt'.

The bankers' greed and lust for mortgage turnover meant the prices of houses was bid up unfeasibly high, due to oversupply of dodgy mortgages. As mortgage lending reverts to mean, prices will drop, most probably substantially. House price busts generally take about 5 years to work out - with vested interests proclaiming 'now is a good time to buy' all the way down.

A poster earlier said he didn't have a mortgage - this is irrelevant to the market price - most people need mortgages, and even those who don't depend on people with mortgages to buy their old house. The market price is determined by mortgagees, not the minority who are mortgage free.

Currencies further complicate the issue. Anyone who bought in Florida is completely screwed - in addition to florida houses crashing, the dollar is crashing too - a double whammy. People who bought in Spain aren't so badly off - as prices in Spain tumble, the Euro has been going up against the pound, so in pound terms Spanish house prices should be cushioned somewhat by the Euro's appreciation.

People waiting to sell in the UK will be hit by falling UK prices, and probably by a continually falling pound.

I can't predict the future anymore than the next person, but my guess is that anyone who sells their house (anywhere in the world) and waits a bit with their money in the currency they want to buy in will be better off. There will be bottom callers all the way down, who should probably be ignored; the best time to buy will be in a few years time when everybody unaminously agrees that property is a bad investment.

The one problem with holding cash for a long period of time (in any currency) is inflation. Whilst house prices should fall quite a bit more than the value of money is inflated away, the massive bail outs for the greedy bankers could devalue money substantially; traditional inflation hedges such as oil and gold have recently been bid up a lot as a result of this, but a small proportion could be purchased on pullbacks as an inflation hedge.

Most of the drops should be out of the way in (guessing) 1-2 years time; hard bargaining and stupidly low offers are probably the way to go - get a substantial discount and you're cushioned against further losses.

leighbloke

Though I think what you wrote probably holds true for most of the UK and the US - I don't think this is can possibly be applied to the long term market in Spain, Florida or the "2 bedroomed purpose built rabbit hutch" here in the UK.

These three markets (probably add Bulgaria aswell) have been driven not by traditional "supply & demand" but by speculaters believing developers inflated forecasts of "captal growth & rental income"
I was told more than once "put a deposit down on three units now, in six months sell two to people desparate to buy here, (because nearly all the units are sold already) and you'll make enough profit to cover the costs of the third unit"
OR
"The place will be practically free once it's completed as the rental income will easily cover all your mortgage & maintenance costs"
I really think these markets are knackered very long term - when you see more for sale signs than windows as you drive down a street all these people can't want "to move" They are desparate to sell.

sueandterry

We are also seeing the Spanish looking for second properties, and heading down from Murcia and Madrid, and the tv channels are on the look out in the Murcia Area, bringing prospective buyers to the area. (and marketing it like mad, in an attempt to recoup the massive amounts spent in this area on the necessary infrastructure. The Spanish are realising that there are now houses on the market that have been renovated and back on the market again !! We are keeping our fingers crossed that this will be the year for us.

sueandterry

Not always true, I know plenty of people here with reasons other than
desperation who want to sell. Many of us have lived in Spain for 10 years
and more, and, as in any country want to move up the ladder, or, as one gets
older, and the visitor syndrome has slowed down a bit, down-size. There are
others who have aging parents who wish to join them, and then need, for
instance a granny flat. Plus, there are people who have divorced or separated while in Spain, and need to separate their properties, in order to
move on. Then, when they meet somebody else in the same boat, and remarry, then excess property need to be sold. Also there are people who
bought purely for investment, as a pension so to speak, and they are now in
the throes of selling to recoup their investment. I think quite honestly desperation is in the minority.

bil

Mind you, at least the bankers who screw up are never made to pay, like we would if we screwed up big time.

Thank goodness for that!

leighbloke

You obviously live in Spain - I don't - If you live there, do you develop a blindness to the thousands of newly completed, never occupied, apartments and villas for sale??

sueandterry

Yes, I do live in Spain.... yes there are a lot of unoccupied properties, but that's because the season is so short here. I have never understood why? The weather is so gorgeous here from April to December.... They remain empty because the people who own them live in UK. No, we don't see them,but we do know lots of people who live in them. They aren't all for sale!!
The urbanizations have thousands of people living on them. Personally I prefer the old properties. They have more character....

sueandterry

(and I find your comment about women rather offensive !!) I thought that was against the rules.....

leighbloke

What? do you have gangs roaming the the streets at night randomly putting "for sale" signs up on properties? See, that I didn't know. There is obviously quite a shortage of properties in Spain at the moment, The new developments will be sold out by Monday and by June their prices will have doubled.

Hope my sig is more to your liking now - thank you for pointing out it could be considered offensive. I would hate to offend anybody - it simply isn't in my nature.

sueandterry

Ok, point taken.... I like your style... it's nice to see humour these days, don't you agree !! Yes, much prefer your other quote... I was just pointing out that not all sales are due to desperation !!

leighbloke

Evidence of more than a smattering of intellect may I say?

rugbymatt

said at 1.44 AM...........................without a doubt not only delusional but also pissed.

leighbloke

Please do not judge me by your own debauched standards - I currently have a rather severe bout of the man flu - and after an aborted attempt to get round the golf course in the early afternoon - returned home where on and off I dozed on the sofa for around 8 hours - sleep did not come easy at "bed time" so i thought I'd read some of your posts to see if they brought on the sleep I so desparately require.
Thanks to your incoherant inane drivel I awoke this morning refreshed, ready once again stroll out into the world making it a better place for the rest of you.

rugbymatt

Blah blah blah blah.