US property market in fastest ever decline. Spain to follow

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This topic contains 17 replies, has 8 voices, and was last updated by Profile photo of Anonymous Anonymous 8 years, 6 months ago.

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  • #54000
    Profile photo of Anonymous
    Anonymous
    Participant

    Bad news from the financial times (see link below). The US property market has seen slow-moving sales for a while, and price cuts for the last 18 months. However in the first quarter of this year the prices plummetted by 14%. If it maintains that pace the property price correction will be 56% in a single year – incredible.

    http://www.ft.com/cms/s/0/ed1f5e14-2bf3-11dd-9861-000077b07658.html?nclick_check=1

    Lets hope spain doesn’t have a similar crash landing, but maybe it is too late for that now.

  • #83237
    Profile photo of angie
    angie
    Spectator

    Some experts (not agents) but economists are also predicting that UK property could also slump by as much as 40% over the next 3 years despite the band that constantly says that there is more demand than supply in the UK. Even in the South East, some friends are getting worried about the future, in the South West the market has already gone into decline, in some cases 20% being lopped off prices in some areas, yet still no takers,

    Just had an email from an honest lady who runs an agency in Cyprus where that market is constantly hyped up by large Cypriot Developers, she says the market there has changed quickly, it’s now a buyer’s market even with new-build. Could be something to do with Cyprus about to remove it’s tax benefits, property there could slump too as a result, (about time as it’s also well overpriced like Spain’s)

    France is also suffering, the Euro is too strong to buy in Eurozone for Brits.

  • #83246
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    mike
    Participant

    @angie wrote:

    France is also suffering, the Euro is too strong to buy in Eurozone for Brits.

    And I don’t think that can last. David Smith in the Sunday Times (sorry, no link) was writing about how PIGS might fly. By PIGS he meant Portugal, Italy, Greece, and Spain and how they may have to leave the euro if they can’t influence the ECB interest rate. Now that would be fun!

  • #83249
    Profile photo of katy
    katy
    Spectator

    This morning in Diario Sur

    Property sales fall 38% in march and Mortgages 40%
    http://www.diariosur.es/20080528/economia/vent … 80936.html

  • #83250
    Profile photo of Anonymous
    Anonymous
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    What is often misunderstood about the UK (and other property markets to differing degrees) is that about 70% of demand in a boom is discretionary (and is fuelled soley by the easy availability of cheap credit). When Joe public realise that prices have stopped increasing are now falling, they exercise their discretion and stop buying. Add to this the fact that lenders having now come to their senses and have a few years of catch up, with which to sweat existing borrowers who can pay, to make up for the last five years lax/foolish lending decisions. And the future is grim.

    With easy money prices became massively over inflated relative to fundimentals, and as were about 18 months behind the US, the UK sub-prime problem which I have, no doubt’s is as acute as the US situation having not yet kicked in, the return to prices sustainable and related to fundamentals. IMHO will be nationwide and worse than the 1989 to 1994 crash.

  • #83254
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    Anonymous
    Participant

    But where are the bargains?

    I keep looking but prices seem the same!

    Am I missing something here?

  • #83255
    Profile photo of Anonymous
    Anonymous
    Participant

    @maximus wrote:

    But where are the bargains?

    Don’t think it is so much bargains, but certainly more realistically priced. They are there. Some agents for resort properties do not seem to be showing the price the purchaser will accept and more living in hope.
    If the acceptable price was shown as opposed to the asking, it may encourage more to view.
    I have been surprised to see that even in the non-tourist area (Towns and Cities), that prices are been shown reduced in some agents displays. Again, not the agents specialising in holiday properties, but the Spanish agents serving the local residents.
    If the residential premises are showing a drop, not a lot of hope for the tourist villas and apartments in the resorts.
    If I were looking for a resort type premises, I would certainly go in with an offer 40-50% below asking.

  • #83256
    Profile photo of katy
    katy
    Spectator

    The first bargains will go to locals, bank and legal staff, family and friends. All word of mouth. Our Gardener has a superb villa and great views, bought during the last slump from a bank.
    As for offering 40% or more off the price. I certainly know a lot of people who just wouldn’t bother selling. Many would like to sell but are in a position where they don’t need to give it away. Others have priced more realistically to start if they have just put them on sale this year.

    The main ones to be overpriced are the new developments as people who bought a few years ago on the 1st phase have followed the developers increases which are artificial ones. They have been pushing them up when everyone knows prices have been at a standstill for about 3 years.

  • #83258
    Profile photo of Anonymous
    Anonymous
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    @katy wrote:

    The first bargains will go to locals, bank and legal staff,

    But do you honestly think that the bank staff want 100,000s houses?
    Do you think that all bank and legal staf can afford?

    @katy wrote:

    As for offering 40% or more off the price. I certainly know a lot of people who just wouldn’t bother selling.

    Agreed, but for many they have a choice of cut their losses or bankruptcy.

    @katy wrote:

    The main ones to be overpriced are the new developments as people who bought a few years ago on the 1st phase have followed the developers increases which are artificial ones.

    Sure is stupidity.

  • #83259
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    The first bargains will go to locals, bank and legal staff,

    But do you honestly think that the bank staff want 100,000s houses?
    Do you think that all bank and legal staf can afford?

    @katy wrote:

    As for offering 40% or more off the price. I certainly know a lot of people who just wouldn’t bother selling.

    Agreed, but for many they have a choice of cut their losses or bankruptcy.

    @katy wrote:

    The main ones to be overpriced are the new developments as people who bought a few years ago on the 1st phase have followed the developers increases which are artificial ones.

    Sure is stupidity.

  • #83260
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    The first bargains will go to locals, bank and legal staff,

    But do you honestly think that the bank staff want 100,000s houses?
    Do you think that all bank and legal staf can afford?

    @katy wrote:

    As for offering 40% or more off the price. I certainly know a lot of people who just wouldn’t bother selling.

    Agreed, but for many they have a choice of cut their losses or bankruptcy.

    @katy wrote:

    The main ones to be overpriced are the new developments as people who bought a few years ago on the 1st phase have followed the developers increases which are artificial ones.

    Sure is stupidity.

  • #83261
    Profile photo of katy
    katy
    Spectator

    Yes, I agree. Bank staff etc will not buy all the 2 million or so unsold units. I don’t think many of them will be interested in the small 2/2 in tourist areas. Nevertheless, most bargains do not get as far as the UK estate Agents, the Banks deal mainly with their Spanish cronies.

  • #83262
    Profile photo of Anonymous
    Anonymous
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    @katy wrote:

    most bargains do not get as far as the UK estate Agents,

    Sorry, didn’t think of UK agents.
    Why use a UK agent when there are many, many reputable agents in most Cities in Spain, like any other Country?

  • #83265
    Profile photo of Anonymous
    Anonymous
    Participant

    remember the first phase of any housing crash is denial, that is where we have been for about 3 years now. Once the denial is over the rot will set in. Initially don’t expect many price bargains, instead people will spend ages trying to sell at normal prices. The next wave in the next 2 – 4 years will be the ones that start the price erosion

  • #83284
    Profile photo of Anonymous
    Anonymous
    Participant

    @mg wrote:

    @katy wrote:
    most bargains do not get as far as the UK estate Agents,

    Sorry, didn’t think of UK agents.
    Why use a UK agent when there are many, many reputable agents in most Cities in Spain, like any other Country?

    I have started to see that Spanish agents are dropping asking prices, and they are also advising buyers to put in low offers. I guess they want a sale, and think that the only way they will get a buyer truly interested is at lower prices.

    Most British agents I speak to are still in denial. I am always hearing that the asking price is the firm price… Maybe, the seller would come down 3000€ 🙄

  • #83299
    Profile photo of Anonymous
    Anonymous
    Participant

    Looks like it’s the big one!

    http://www.economist.com/displayStory.cfm?story_id=11465476

    In 2 to 3 years many 2 beds appartments on cookie cutter costa developments will be available for key money.

  • #83324
    Profile photo of mike
    mike
    Participant

    @pablo Silver or Lead? wrote:

    Looks like it’s the big one!

    http://www.economist.com/displayStory.cfm?story_id=11465476

    In 2 to 3 years many 2 beds appartments on cookie cutter costa developments will be available for key money.

    I think some of these places will become slums in which no one will want to live. Who will spend money maintaining them?

  • #83325
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    Anonymous
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    @mike wrote:

    I think some of these places will become slums in which no one will want to live. Who will spend money maintaining them?

    I think that this could be a massive problem also.
    I can recall some 10-12 years ago an apartment block in the Canary Islands, which had run its couse on holiday lets and was then turned into residential lets and not to the better end of the market.
    The property just becams so run down, the few private owners who were left just could not sell and darn’t let for holiday purposes as they knew they would have problems with their paying guests.
    Possibly by now it has been demolished.
    Also, even in properties, especially apartment blocks, we read of such poor build quality on some, what will the life expectancy be on them anyway?

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