@El anciano wrote:
I struggled to get a realistic peak value, my best guess is that the house peaked around 280K
We finally got it for a little under 145K, but I don’t think this is really any reflection on what sellers will accept, in my case it was just the outstanding loan, and a little for fees & the retention
So, in this case the sellers were walking away with basically nothing, but that was better than getting repo’d
Thanks, that’s interesting.
I’m working on the premise (rightly or wrongly) that property in Spain could fall by as much as 50-60% off peak prices. I’ve come to this conclusion because it’s widely reported that the Irish property bubble has resulted in falls of this magnitude hence causing the current bank problems there. As is well documented on this forum, the Spanish Banks exposure to property is likely to be of a similar order, hence my reliance on those figures.
Your experience seems to roughly bear out those numbers.
My own interest is because I’m looking to buy and although I don’t expect a seller to drop to those kind of prices I would naturally feel more comfortable if I had at least some kind of margin of safety but finding a motivated seller who accepts this just isn’t easy.
Last week I made an offer on a property that equated to about 63% (i.e. a 37% drop) off what I know to have been its peak asking price some three years ago. I thought that was a fair offer given that it never sold at that asking price at the peak and how far the real value might drop next year. However it was refused, the seller, although motivated, would only drop 32% off that and I wasn’t willing to accept any more risk even though I liked the property.
I recount all of this just to highlight that even though it seems clear to all that prices can only go down over the next few years it’s really hard work getting sellers to accept it.
My search continues.