tim hortons man

Perhaps this has been discussed to death, I'm not here that often, but I haven't seen any threads on this. But the news on the BBC is pretty grim,

Video Prices in a Free Fall

http://news.bbc.co.uk/2/hi/7399812.stm

I'm not surprised I read somewhere that there are 2 million unsold homes in Spain, with the UK heading into its own property slump and recession I can't see the coast housing market recovering for a long long time.

Any thoughts?

pete_l

What about all the other nationalities: the germans and other northern euriopeans. Are they buying, or sitting tight? Since they're in the euro-zone they don't have exchange rate worries and their economies are not suffering as much from the american sub-prime problems.

All this goes to show is the folly of thinking that other countries' housing markets are built on the same principles as the UK markets.

El Capitan

Just as the Spanish Minister says, if people bought houses as homes we would not have such crazy speculation leading to such a "readjustment". House prices just have to fall in line with earnings. You can lay the blame on greedy property developers and those buyers who thought they could make a quick buck at someone else's expense.

gallerie9

That is so true, people in the UK are greedy, but they have lots of problems with new mortgages. Our son is a letting agent in the UK, he has lots of clients who are paper rich, and they are losing money fast.
The housing market in the UK has always been an up and down market. and I would think that the Spanish market is going the same way.
But if you have the right product it will always keep its price. and there will always be a market.
And remember unless you are not on the market there is no real fluctuation because you buy on the same market you sell on.
The only people I feel for are the ones that will have massive negative equity and are having to re negotiate there loans and cant get such a good deal.

tim hortons man

Was just reading on another board about San Jose going bankrupt. A lot of people who put down large deposits and sold off everything in the UK are worried sick about what's going to happen.

We have friends who bought through Polaris World and they got word that their phase has been cancelled. They've been offered a 30% discount on another unit but that only brings it to current market value.

My advice, take your money and run. Come back in a couple of years when prices have collapsed.

My own opinion is that prices around the coast will collapse. Prices around Madrid where I live will go back to pre 2000 prices. In other words be affordable for the average family.

El Capitan

I try and avoid giving advice, it is for each and every one to make up their own mind and act accordingly. As gallerie9 says, if you are buying and selling on the same market then you are less affected except that there are few buyers around and for the time being the exchange rate makes it even worse for brits changing pounds to euros to buy. It is not only prices on the coast but all over Spain in my view. I totally agree though that the "correct" price of "average" housing is that which average families can afford. A few people made mega bucks speculating on houses and now the rest of us are suffering. For the time being I am happy to see bank deposits in the UK paying over 6% interest.

tim hortons man

The real problem is that as prices begin to fall buyers start to sit out the market. In the video posted the Lady profiled can't sell her unit and is getting ready to hand it back to the bank. That has a knock on effect on the other units driving the prices down.

Now as a buyer are you will to buy knowing that your unit will be worth less in a few months, as more buyers sit out the market the more prices fall.

Prices are currently down 30% putting many people in negative equity, as prices continue to fall more and more people will start walking away.

I have to say I'm surprised it took much longer for the collapse to happen than I expected. In America is was very very quick. It seemed to stretch out over a year or more. But now that it's started prices have only one way to go, and that's down.

Casa Santo Estevo

So very true. Looking at the place that woman is trying to sell it would seems the market is just inundated with copies.
But it is not very rosie in the U.K. either.
Look at all of the stories here:
http://news.google.com/news?ned=uk&h...TF-8&ct=rels_0

Mitzyboy

Jeez!!!

How many property slumps have we been through in the UK only to see property prices rise again.

This isn't a first off occurrance in Spain iirc. I remember reading about one of the Great Train robbers that invested heavily in property in the sixties and was screwed by a property slump / overstretching himself.

A house can be a home or an investment, or it can be both. I dont see people in the UK as being particularly greedy in the buy to let market. Its just another way of securing a pension as an alternative to the stock market. A stock market that can be far more volatile based on things that happen thousands of miles away from where the investment took place!

A good quality product will always sell at the right price. I feel the multi box urbs are going to be the worst hit, but from my point of view I really am not worried as I'm in it for the long term.

poshnbucks

You have hit the nail on the head mitzy , I live very well have the window open now the birds are singing across my orange groves and I can see the sea from my kitchen window, To buy my house now at the price I paid three years ago would cost me an extra 65000 euro to be were I am today because of the euro exchange rate its in my favour now, I am not going to move I owe nobody anything on the house, Its all legal so I am not bothered I do feel for those people who are finding it hard, It seems the whole world suffers if mr yanky gets shaky knees. Ride the storm and remember if your selling and buying, The house your buying will have dropped pro rata People have over stretched themselves taking money out of their house to buy the flashy car in the UK and now you have to repay at a higher rate and you can not get a cheap 2 year deal on your mortgage.However remember bricks and mortar are still a better prospect than pension funds as know to my cost.

tim hortons man

I agree, I've been through several housing slumps as in Canada. Prices do come back but from peak to peak is usually 10-15 years. In the case of spain, prices are so out whack to wages and so over built it could be a generation or two before prices come back.

What I found interesting about America before the bubble burst is that everyone said prices can never go to zero. True but a 30% decline puts most people into serious negative equity and add in mortgage resests (which is something unquie to America I believe) and you have people in serious problems without prices hitting anywhere near zero.

Mitzyboy

I'm not sure, I wouldn't say in the UK it was 15 years. We made a point of moving roughly every 7 - 8 years, and we did very well out of property in the UK.

Property is out of whack, as you put it, in the UK also. My daughter wanted a basic 2 bed flat, and to get it she would have neede 5 x her salary for a mortgage. When I was buying you were lucky if you could get 2 x

I

Mitzyboy

I'm not sure, I wouldn't say in the UK it was 15 years. We made a point of moving roughly every 7 - 8 years, and we did very well out of property in the UK.

Property is out of whack, as you put it, in the UK also. My daughter wanted a basic 2 bed flat, and to get it she would have neede 5 x her salary for a mortgage. When I was buying you were lucky if you could get 2 x

I think sometimes it gets talked up so much it makes it even worse

Casa Santo Estevo

Mitzy... you should ban yourself for posting more than once the same message!

jdr

Germans all sold up because of their new tax laws.