67% of first-time buyers believe now is a good time to buy a home...

[locke]

I should have clarified in the OP that they were looking to buy a brand new home, but I know for a fact they wouldn't turn down a second-hand one either if the price and location was right, and it didn't require much work. What are people 'getting away with' (i.e. having their bid accepted) these days when underbidding on second-hand homes, on average? 20%? 30%?

No statistics are published, so it's hard to know, but anecdotal evidence suggests that those houses that are moving are being sold for around 15-20% under the asking price.

That said, those are often the ones where the owner had become more realistic about the asking price anyway. I remember a few months ago seeing two houses in roughly the same condition on the same road in Cork (all were built to the same design in the 1950s). One was on sale at 180K, the other one was priced at 300K.

[toxic avenger]

Absolutely no question but that you were right. The NAMA acquisitions, the empty properties, the repossessions that must inevitably come, and the very fact that the developers are attempting desperately to con people into believing there are only 40,000 units lying unused, all point in only one direction - down, and by a long way. We have a decade of economic stagnation ahead of us, that alone, even without the above factors, would ensure a further fall. The whole lot combined means that it's going to be a big fall.

[redhead101]

Why would they buy a new home IF they could buy a second hand one with likely more garden, more space in a settled area ?

As for price ?
Everybody states it will be cheaper next year BUT based on what exactly ?

Everyone on here is an expert on property...........NOT.

* At least 170,000 surplus homes on in the market

* Banks continuing to tighten up on mortgages

* Numbers of people working still falling

* Immigrants returning home and emigration returning

All of which means that supply is far in excess of demand and is likely to remain so. Prices will continue to drop until, as the economists would say, there is equilibrium in the market.

[NAMAwinelake]

They're not necessarily wrong. Now is unlikely to be the best time to buy a house for a first time buyer. However, that does not necessarily mean that now is not a good time to buy a house provided one has relatively certain tenure of employment. The necessary line to consider is not whether house prices will be lower now than they will be in a year or even two or three years time. Rather, how easy (or not) it is now for a first time buyer to gain mortgage approval, what the interest rates are now and what one might be able to fix their mortgage at and in respect of price, whether house prices will be higher in five or so years than they are today. Most people buying a home today are not looking to sell next year, so whether they will drop by year end is not determinative in deciding whether now is a good time to buy a home. All that said, I agree, now is unlikely to be the best time to buy a house.

I would have to disagree and say that not only is now NOT the best time to buy an average home but it is also not even a good time to buy. The latest available information from ESRI/Permanent TSB was that homes fell by 8.5% in the period Sep-Dec 2009 with falls accelerating with a 3.6% fall in December alone. They have suspended publishing the index again until April 2010 but in my view it is unlikely that the trend which was picking up pace has reversed.

The latest forecast that I have seen for 2010 was in the Irish Times at the start of January 2010 and the median forecast from a group of pundits was a 9% fall this year - some were more, some were less but that was the median.

NAMA is likely to have an effect on prices though we haven't yet seen how they value (and then how the EU value, noting that it is illegal to collude to fix prices) and then how they will manage the properties and if and when they will dispose of them - remember also that NAMA is part of the picture, they estimated that 80% of borrowers will pay back the loans 100% so the developers too will decide how these properties come on the market.

There are of course over 300,000 properties vacant today and somewhere between 110-200,000 are not yet on the market. When they do arrive on the market, supply and demand would tend to say they will depress existing prices. A total of 30,000 mortgages are in arrears and a further 30,000 have been restructured, some of these will appear on the market as repossessions or forced sales.

Population is likely to have dropped between Apr 2009 and Apr 2010 though we'll only know in April, this will be the first drop in 20 years. Home prices are determined by economic performance and population.

Interest rates will rise, either because the ECB gradually increases rates (though that is likely towards the end of this year soonest and even then is likely to be minimal) or more likely banks here will raise rates themselves because they are currently borrowing at rates of 2.5-4.5% and they will need make a profit.

The governor of the Central Bank has called for "nominal wages" to fall. The Govt must take a further €3bn from the Budget in November and they have indicated it will come first from pay constraint.

The govt say unemployment will rise by 87,000 this year before falling next year by 20,000 and 45,000 per year thereafter.

All of this points to further reductions in price. And if that is so, then buying today means being lumbered with potential negative equity if they want to sell or if they lose their job or their wages are cut and they need to sell.

If I am wrong and we are today at the exact bottom of the market then a potential buyer will lose the difference between the exact bottom and the price they pay. However they will be buying into a rising market in which they have some confidence.

So my advice is, either look today for a bargain not reflected in market figures or wait (rent).

[odie1kanobe]

* At least 170,000 surplus homes on in the market

* Banks continuing to tighten up on mortgages

* Numbers of people working still falling

* Immigrants returning home and emigration returning

All of which means that supply is far in excess of demand and is likely to remain so. Prices will continue to drop until, as the economists would say, there is equilibrium in the market.

Oh those wondeful Economists and people believe them NOW ?

[hammer]

2012 is the time to buy.

Stamp duty will be reduced if not eliminated

2011 - will be the year of
Higher interest rates putting pressure on people to sell distressed properties
Water rates - as above
Property tax - as above
Less income & more taxes - as above

How long can the % of home owners in the 450,000 unemployed continue to pay their mortgage ?

[TradCat]

I would say wait because even when we hit the bottom we are likely to bump along there for quite some time. So even if you think it's the bottom wait a year and see. If they fall again wait another while.

That would be my guess anyway.

[hammer]

You will soon be able to offer CASH

[MrFunkyBoogaloo]

Have I given them the right advice?

Absolutely..

My advice to some friends is to also wait it out. The day the price begins to increase is the day you buy (or the day before if you can catch it).

[Rebel_Yell]

Absolutely, You are a very good Auntie

House prices will fall at least 50% from current asking prices.
Growing unemplyment, Emigration, falling demand, massive overhang, Rising interest rates, etc.etc.
I have been waiting since 2003 to buy a house, there was no way I was going to invest in the 'Pyramid Scheme'. We went looking at a particular 4Bed detached Sth County Dublin in 2004 at 800K, Estate agent toldus that they were now looking for 850K, I suggested buckets of Vaseline.
I fully expect to buy on that road next year for 250K, or less.

The only people who are saying that prices are stabilising, are the vested interests. refer your nephew to this site: Quotes from the Irish Property Bubble
Scroll down through the various 'Experts', and look at their predictions for the past few years.
(Thanks a million for whoever posted that link, the best laugh ever!)

An average house should, and will be available at 3 times average wage.
it would happen a lot sooner if NAMA was not interfering in the market.

Waiting since 2003 eh. Aren't you very clever. I bought in 2003, Sold in 2007. I guess that makes me very clever. Actually no, it makes me very lucky. You see I had no clue. Turns out neither did the economists.

There are more variables than the prices as a previous poster said. I would say, if their employment is stable and they get a house they like, in an area they like at a price they can afford (even if there is a shock to the system, like one of them looses a job or their income reduces for a while) then go ahead and buy.

Don't try and second guess the market, it's not entirely rational (the market that is). It looks like it will drop for another year or two but who knows. If people buy when they are ready to buy and because they need a home, it's rarely a bad decision.