Property experts - Is now the time to buy?

[tailormade]

Ok, I know that nobody has a crystal ball, but is it sensible to buy now? We sold our house 3 months ago for its market value, ie, we marketed it at just slighly above what it was valued at, then accepted a slighly lower price. We didn't market it at 2007 prices expecting to get a sale. We are now renting and have a sizeable deposit, which will allow us to put approx 30 - 40 % down (obviously depending on how much we buy for). We are most certainly looking for a property that is being sold for today's prices and thats where we've met lots of problems. There are numerous properties on the market that have been there for several months. They are most certainly on at 2007 prices and EAs have even told us they are overpriced. Vendors will not even consider lowering their price. We have finally found one property that we like. These vendors have actually slightly lowered their price and we believe its on the market for a reasonable value. We know what it was bought for 2 years ago and the vendors will are actually only accepting 5K less (which does not reflect the nationwide drop), BUT, they have done alot of work on it, including new boiler, windows, bathroom and basically renovated the large garden, so its difficult to make a direct comparison. The property is also in a desirable area where property does tend to hold its prices.

We like the property, can just about stretch to the price and as I've said before, feel it is reasonably priced (although certainly not a bargain). I think in any other climate, I would put in an offer, but to some extent, with the obvious economic situation, also feel that I should in fact be getting a bargain. The problem is, that vendors seem less flexible than ever about accepting lower prices. Its also affecting the amount of properties on the market, as many people are trying to sell for x amount, not getting it, then just taking it off the market. We are renting from friends so have no pressure to buy, but I am keen to get back on the ladder having always owned property. I'm not quite sure what I'm asking (!) but just wanted unbiased opinions from others. Would we now be crazy to buy?

My parents had an offer today and said no!!!!!!!!!!!!!!!!

Jimmy, we have also just started series 5 and I think you need a good talking to

The problem is mortgages are so hard to find(decent ones need a huge deposit)people are tied on what they can accept for their property.

Ours went on to today,we need to get X amount to get our mortgage if we don't it will be coming off and we will stay put. I know countless people in the same situation.

Until there are more decent mortgages around I can't see many sellers budging on price.

We are in a similar position - we have accepted an offer on our house at approx 15% below what we tried to sell for 2 yeras ago. The houses where we currently live are moving quite quickly because of catchment areas and sellers are being realistic in their asking prices. The area we intend to move to is a different story with many houses still on the market after 18 months and no real price drops. I agree a hoouse should be a home etc and I want to buy our forever home - on this basis we intend to look at all the properties on the market and offer 15-20% below asking price - if sellers want to sell/need to sell then I think they have to be realistic or take the property off the market. We will try hard to walk away from properties where the figures don't add up unless it is exceptional. we will go into rented if necessary as we want our next house to be the right house for us at the right price.

God I hope not...prices are still not reasonable for anyone trying to buy a decent home (well certaintly not for us anyway!) Actually feel quite down at this sudden bounce in the market..

Don't feel down it is temporary I'm sure!I really believe houses will be affordable again within 3 years.I think prices will eventually settle at 40% off peak before starting to rise at a sensible rate

House prices on the auction market have been fairly steady at 40% off peak since last year. Auction prices have diverged widely from retail, as the 'do up a property' wankers have evaporated - a couple of years ago auction prices were same as retail.

This gap reflects the current risk premium (high). I would however expect to see retail (EA) prices fall further as there are still severe economic problems and even absent those problems house prices are absurdly overinflated.

We are sitting it out at the moment. We have a 10% deposit but are finding it difficult to save more. That 10% deposit is lots, but will currently only get us 2 bedrooms. Our main problem is that we are 1st time buyers trying to find a family home...always knew we were going to struggle, but it is near on impossible at current prices.

Nationwide have been reporting an small increase in property prices for the last few months. Never makes mainstream news though, only finacial/mortgage industry press.

Thank you so much for all of your replies/advice. I have to say that my gut feeling is to sit this out. I'm not financial expert, but did feel several months ago, that something had to happen regarding house prices. We sold our property within 2 days of it being on the market; it was priced reasonably and was snapped up straight away. We did actually put an offer in for a house whose price also reflected the downturn but this fell through due to no fault of our own, and so have just 'found' ourselves in this situation! To be honest, if this house had have gone through, I probably wouldn't have thought too much about it.
The problem I'm having is that people around here haven't even dropped their prices to reflect any change in the market since 2007. In fact, some houses are actually up for more than they bought for 2 years ago. Don't get me wrong - I know that they are only worth what someone will pay, and, having been on the market for a year, are most certainly not worth it! I'm just trying to weigh up the pros and cons. For example, if we rented for 18 months, we would have spent 10K on rent. If prices 'only' drop say, another 5% or, have even bottomed out, we wouldn't really be gaining by waiting. However, after looking at Jimmy's graph, if the trend follows through, we would be fools to buy.
Another question for your clever property folks - if prices do crash to the extent that the graph states, surely supply will ease up even more? I vaguely remember the housing crash of the early 90s, and knew of people who saved for months to make up their negative equity before they could move. Could we be looking at years before things even out?

Basically yes that's right, supply of the good houses becomes tight, the rubbish will be cheap but who wants that anyway.
So if you're waiting for 50% off, I wouldn't, another 10% though is worth hanging on for.

To all you Wire fans!!! We have finished all of The Wire (sob) but have just purchased The Corner & watched the first episode & it is good. I read in either Heat or Now magazine that The Corner was made before The Wire by the same producers/directors (or something along those lines). Enjoy

link here

Tailor, trust your gut

Having said which, we've just seen a house we can well afford, of the type we want (rare) so am about to test out all the thinking on this thread for myself