Blackrock, Co Louth - first offer?

MizMix

Hi everyone,

I have read many previous threads including the 'am i mad to buy my first house now' and I've found it very helpful. While I'm not ignoring the common sense arguments for holding off a few years we are still thinking of buying this year....however ONLY IF we get a cheeky offer if accepted.

We're in our early 30's, got married a few months ago, baby on the way and while we are living in a lovely rented home (actually in the development we are looking to buy) I can't help but long for our own place that we can add our own touches to. There is a small site beside my parents in the sticks and we were thinking of building there- however my parents would expect us to live there forever and it feels like too much of a commitment. So we are looking at the development we are currently renting in and would love some advice.

http://www.daft.ie/searchsale.daft?id=617177
This EA has 2 of these houses for sale (this one and the last remaining show house). These houses were built a few years ago and most sold out before the crash....most of our neighbours paid an eye watering 530,000 for them!! Anyone that knows the area knows you pay a premium for Blackrock and this development wasn't a hard sell when it first launched- it is an area always in demand (relatively speaking), good amenities, beside the beach and 5 minutes from the m1. So yes you're paying extra for the location but it has a lot to offer and I reckon in years to come it would be easy to rent out or sell on (but hopefully not at a loss). So you can see it has dropped considerably in price. Now it's still overpriced IMO but not completely ridiculous. We were thinking of putting in a first offer of 220,000. Now the EA says the builder will not accept any lower than 265,000 and he reckons the current owners of the current one will not go lower than this either. But it's in his interest to push for more. Apparently one other person is interested @ around 260 but hasn't put in a concrete offer yet. This showhouse has been on sale for years now so surely the builder would be happy to make a bit of a profit on the last one. Or maybe they would get more offers around 250k so they won't drop this much.

I would love to hear some feedback- even though it's quite a new development, it is 'mature' in character. 99% occupied, quiet development, lots of young families, park in the centre etc and in the most in demand area of Louth. Is 220k too cheeky (considering in the next year or 2 house prices will likely fall another 25%). Are we being realistic trying to buy @ 2013 prices now?

daltonmd

MizMix wrote: »

Hi everyone,

I have read many previous threads including the 'am i mad to buy my first house now' and I've found it very helpful. While I'm not ignoring the common sense arguments for holding off a few years we are still thinking of buying this year....however ONLY IF we get a cheeky offer if accepted.

We're in our early 30's, got married a few months ago, baby on the way and while we are living in a lovely rented home (actually in the development we are looking to buy) I can't help but long for our own place that we can add our own touches to. There is a small site beside my parents in the sticks and we were thinking of building there- however my parents would expect us to live there forever and it feels like too much of a commitment. So we are looking at the development we are currently renting in and would love some advice.


http://www.daft.ie/searchsale.daft?id=617177
This EA has 2 of these houses for sale (this one and the last remaining show house). These houses were built a few years ago and most sold out before the crash....most of our neighbours paid an eye watering 530,000 for them!! Anyone that knows the area knows you pay a premium for Blackrock and this development wasn't a hard sell when it first launched- it is an area always in demand (relatively speaking), good amenities, beside the beach and 5 minutes from the m1. So yes you're paying extra for the location but it has a lot to offer and I reckon in years to come it would be easy to rent out or sell on (but hopefully not at a loss). So you can see it has dropped considerably in price. Now it's still overpriced IMO but not completely ridiculous. We were thinking of putting in a first offer of 220,000. Now the EA says the builder will not accept any lower than 265,000 and he reckons the current owners of the current one will not go lower than this either. But it's in his interest to push for more. Apparently one other person is interested @ around 260 but hasn't put in a concrete offer yet. This showhouse has been on sale for years now so surely the builder would be happy to make a bit of a profit on the last one. Or maybe they would get more offers around 250k so they won't drop this much.

I would love to hear some feedback- even though it's quite a new development, it is 'mature' in character. 99% occupied, quiet development, lots of young families, park in the centre etc and in the most in demand area of Louth. Is 220k too cheeky (considering in the next year or 2 house prices will likely fall another 25%). Are we being realistic trying to buy @ 2013 prices now?

Well it's a lovely house/location and you seem to be very happy there and know it so I can understand your eagerness to buy - particularly with a baby on the way (Congrats).

The real issue is affordability over the long term. (I wrote about this in another post).

A 200k mortgage over 30 years at 5% works out at repayments of nearly 1100pm.

In 5 years if interest rates increase to 7% on the balance of 183k then your repayments increase to almost 1300pm.

Now providing that your income/outgoings remain the same and you could afford this on one income (worst case scenario) then you should be fine.

The real issue here is to have your budget and stick to it.

Look at this post ( http://www.boards.ie/vbulletin/showthread.php?t=2056381703&page=21) for the links.

No-one can really advise you whether or not you should buy - but you really should sit down and look at your worst case scenario to make sure you can cushion any shocks.

Best of luck

daltonmd

bigneacy

MizMix wrote: »

Hi everyone,

I have read many previous threads including the 'am i mad to buy my first house now' and I've found it very helpful. While I'm not ignoring the common sense arguments for holding off a few years we are still thinking of buying this year....however ONLY IF we get a cheeky offer if accepted.

We're in our early 30's, got married a few months ago, baby on the way and while we are living in a lovely rented home (actually in the development we are looking to buy) I can't help but long for our own place that we can add our own touches to. There is a small site beside my parents in the sticks and we were thinking of building there- however my parents would expect us to live there forever and it feels like too much of a commitment. So we are looking at the development we are currently renting in and would love some advice.

http://www.daft.ie/searchsale.daft?id=617177
This EA has 2 of these houses for sale (this one and the last remaining show house). These houses were built a few years ago and most sold out before the crash....most of our neighbours paid an eye watering 530,000 for them!! Anyone that knows the area knows you pay a premium for Blackrock and this development wasn't a hard sell when it first launched- it is an area always in demand (relatively speaking), good amenities, beside the beach and 5 minutes from the m1. So yes you're paying extra for the location but it has a lot to offer and I reckon in years to come it would be easy to rent out or sell on (but hopefully not at a loss). So you can see it has dropped considerably in price. Now it's still overpriced IMO but not completely ridiculous. We were thinking of putting in a first offer of 220,000. Now the EA says the builder will not accept any lower than 265,000 and he reckons the current owners of the current one will not go lower than this either. But it's in his interest to push for more. Apparently one other person is interested @ around 260 but hasn't put in a concrete offer yet. This showhouse has been on sale for years now so surely the builder would be happy to make a bit of a profit on the last one. Or maybe they would get more offers around 250k so they won't drop this much.

I would love to hear some feedback- even though it's quite a new development, it is 'mature' in character. 99% occupied, quiet development, lots of young families, park in the centre etc and in the most in demand area of Louth. Is 220k too cheeky (considering in the next year or 2 house prices will likely fall another 25%). Are we being realistic trying to buy @ 2013 prices now?

Blackrock isn't as desirable as it used to be. With the council estate having just been finished, another one on the way and whispers of a third (:-o) one being built. As well as this, I have found an anti-social element creeping in, in the last year or two also with young crowds using the beach as a drinking spot at night-time. This could possibly get worse in years to come. They seem to be coming from Dundalk but large groups of social housing isn't going to alleviate this problem.

At the moment blackrock has an over abundance of new houses and estates and this, along with the above factors will affect it negatively in years to come - blackrock still has a bit to fall, on top of national house prices decline so your investment mightn't be wise if you are looking to retain as much value as possible.

I'm not saying don't buy - just saying don't buy blind. If you believe you are buying this just as a family home, then go for it if it feels right - it is a lovely area.

If you are buying with a view to sell in the next ten years, or if you will be majorly upset to find your house is going to be worth 130-160k in 2-3 years then seriously think about your next move.

MizMix

Thanks both for the replies.

DaltonMd- while we could afford the increased mortgage rates we're currently only paying 750euro a month rent so we have it pretty handy at the moment. While we are frustrated renting and not being able to piant/decorate etc, we agreed last night that unless we got a considerable discount we will hold off a while longer. The warning 'never buy in a falling market' is haunting me! However the builder is due to call me back this evening and I've a feeling he just wants to shift the last remaining 4 bed. So lets see.

Bigneacy- I get your point about Blackrock but after living here 18months I find it a lovely place to live. Friends that live in the apartments by the beach have told me that about knacker drinking on the beach at night but we have no trouble where we are. Sometimes during the summer there are groups of teenagers in the park- but I tell you the guards aren't long coming! Being from Dromiskin I find such a difference! But yes you're right we would eventually love to build and would plan on selling after 10 years anyway so we really need to think long and hard. Yes these houses have come down so much, but they were crazily overpriced in the first place.

Thanks for the replies.

bigneacy

MizMix wrote: »

The warning 'never buy in a falling market' is haunting me! However the builder is due to call me back this evening and I've a feeling he just wants to shift the last remaining 4 bed. So lets see.

Any luck with the builder?

the_syco

MizMix wrote: »

would plan on selling after 10 years anyway so we really need to think long and hard. Yes these houses have come down so much, but they were crazily overpriced in the first place.

Think very hard, as you may not be able to sell in ten years as you've seen how much prices have gone down in the last five...!

MizMix

He actually just called back this morning- he said he'd be willing to match the price of the 2nd hand one on sale in the same development i.e. 285k and he'd knock 25k off if we wanted it unfinished. I said well I know there's an offer of 260k in on the other one and he just said again he'd match that. OH's a better negotiator so I said it's above our budget but we'll discuss and we may call back with an offer. We had said we'd put in an offer of 220k but I'd say he'll decline (reckon he's go to 240k but that's too high). And I'm starting to think 220k is still too much. We've a 40k deposit already. In another year we'll have 50k and house prices will be down more. And seeing as that house has been on the market so long now I wouldn't be surprised if it's still there, along with thousands of others. We'll probably put in the offer anyway, just to see but I'm leaning towards holding off a while longer...if I'm being honest even though it's a family home I do care about it declining in value - as I said we eventually want to build. And being honest for a rented house our place is pretty nice.

MizMix

the_syco wrote: »

Think very hard, as you may not be able to sell in ten years as you've seen how much prices have gone down in the last five...!

I think I'm starting to see sense! You're right- in 5 years this houses have decreased from 530k to approx 260! So who knows what they'll be in another 5! We work too hard for our money to go into negative equity and we wouldn't have anyone to blame but ourselves

daltonmd

MizMix wrote: »

I think I'm starting to see sense! You're right- in 5 years this houses have decreased from 530k to approx 260! So who knows what they'll be in another 5! We work too hard for our money to go into negative equity and we wouldn't have anyone to blame but ourselves

They got a look at the forward on the new DAFT report out on the 3rd of October on the pin here http://www.thepropertypin.com/viewtopic.php?f=4&t=4106

In the article the author says:

"For a real and definitive change to take place in the perception of the housing market in Ireland, a real and definitive change in people's perception of their ability to service mortgages has to take place too. In order for them to make an informed decision, they need to be confident about their long-term employment prospects, the value of their net incomes and the direction of interest rates in the future. The Irish economy continues to lose jobs and the government's troika-led austerity measures continue to affect net incomes which makes it difficult for potential purchasers (and current mortgage holders) to feel confident about their ability to service their debt."

I know you are frustrated renting - I know you fear buying in a falling market, but in 5 years there is a distinct possibility that you could be paying twice what you are paying now to simply put a roof over your head.

The cost of providing a roof over your head, particularly when buying should decrease over the years, not increase. This market is completely backwards.

750 Euro over 12 months is 9k - you could put a beautiful kitchen into the house you plan to build for that amount of money.


Put this way - what you are considering doing is "renting£ a house from the bank for 10 years paying 350 euro more than you are paying now for 5 years and possible 750 euro more for the following 5.

That's 156k. 1100pm with the mortgage for 5 years and 5 years @1500. Then after 10 years you have to hope to get what you paid for it. Or 66k over what you paid to make as financially viable as renting.

Renting at 750pm for 10 years will cost you 90k - that's it. But after 10 years you should have a significant amount saved. You have to remember that you pay for for the privilege of putting a roof over your head - either to a landlord or to a bank. The question is what are you prepared to pay?


Good luck

daltonmd

zac8

MizMix wrote: »

as I said we eventually want to build

Why not build now? If it's your long term goal then you definitely shouldn't be looking at buying a property in a housing estate now. You could get stuck there.

Idbatterim

Op have you morgage approval? I take it there is no management fee. Bear in mind that any amount you overpay, could have a serious detrimental effect on your quality of life (im including your wife and kid in that statement too). Id be wary about buying before the budget, wait till the **** weather and budget and doom and gloom of Jan/Feb kick in, see how prices are looking then! Nobody is saying not to buy EVER, but buying now as another poster has pointed out is not economically advantageous... LOL at the developer saying they wont take anything less than €265,000 they will take what the market is prepared to pay! Repeat €220,000 out loud a few times, ofcourse you know it will be more like €400,000 if not more by the time you have repaid! I have said it before and I will say it again, atleast ignorance was a partial excuse during the boom, that SHOULD be gone by this stage! also if you buy factor in mortgage protection, which I think is mandatory!