9966 Is this the right time to buy?

What we're seeing in New York City (and NY State) is a slowdown in transactions, too, but real estate in NYC is holding its value due to location. The rest of the state is seeing both a slowdown in transactions AND a decrease in prices, with bank foreclosures hitting a new high. If you have cash, it's definitely time to be looking if not yet buying here in the States. If you need leverage (mortgage or personal line of credit), there's no market out there yet.

Housing sales have slowed here in Umbria, but from what we hear the prices are remaining steady. I don't know how familiar you are with the Italian housing market, or hwere you'r elooking, but my advice would be if you find something you love, you can afford it and you think the price is fair, then I'd say go for it. If, OTOH, you're looking for an investment at bargain prices, or maybe you just aren't ready to commit, then I'd continue watching and waiting. We hope someone who's ready to make the move will fall in love with our house and buy it immediately!

So how slow have property sales in Italy become?
In the UK we've had our house on the market now for 8 months and reduced the price by almost 20% to try and get a sale. But nothing yet!
We have now decided to rent it.
I would be interested in the state of house sales in Italy, particulary Le Marche as we are house hunting there for the next fortnight.
Could the slump in house sales be a negotiation point?
We have recently seen a property on the internet that had previously been advertised around E100k now reduced to E60ish.
Seems that some Italians may want a quick sale too??

It is very easy to look at 'averages', but it is much more illuminating to look at particulars.

There is not now, nor has there ever been, (and this is something difficult to grasp), a close correlation between house valuations across borders. In France and Italy (which have both seen modest property price rises over the last decade) the notion that a house represents wealth is not prevalent. On the other hand, in the UK and the US, the 'value' of your nest is considered a tradeable commodity.

Birds don't think that way.

It depends on who is selling: if the seller bought hoping to make a fast Euro, he'll probably drop the asking price. But then he probably bought something not terribly wonderful to start with. You pays your money and you takes your risk, monkeys and peanuts spring to mind.

funnily enough the housing crisis or lack of funds available via equity in houses ex Italy has been for us quite good... in the sense that we are finding less time wasters arriving to view..

those that are coming to see property now either have quite restricted budgets ...say euro 100 k and are very fixed on getting a house of good structural quality more or less habitable so they can be on site whilst work is done... and they are generally not selling to buy...and have finances worked out in the sense that they are not looking to borrow...

the other set of people are the ones with bigger budgets ...who are capable of buying without selling.... lucky... and are getting ready for retirement...so are starting quite big projects now... either restoration or new build...with sort of five year plans in place...

i think the people that were on the edge of being able to afford a dream ... and were really pushing themselves to the limit have dropped out of the scene a bit... also those buying larger properties to keep half and do up and sell other bits in a sense...dreaming and unrealistic about costs and margins have totally gone...

so yes we have seen a slow down in people coming over... but houses that are fairly priced are still selling... less ruins... and less of that sort of easy attitude regarding costs of restoration work.... maybe the message is getting through or the people have studied better but they all seem to have a good idea of costs of work and are not surprised by the figures...in fact generally aware that UK costs run at about the same level... well that's what they say anyway...

some Italian owners are a stubborn and unhelpful lot when it comes to pricing or indeed marketing their property... some you just cannot get to even tidy the junk away... photos are often full of rubbish... or dark because they will not open shutters... others like many UK people have added value by going very high quality and often with some quite extreme colorings... loads of marble and his and her sinks.... and don't seem to realise that invoices for hand painted tiles running into tens of thousands will not help to justify above per square meter market prices... we advertise them at the prices insisted on... never take exclusive mandates... on these types of property... because you would be getting phone calls every other day from them... why hasn't it sold...

apart from rubbish the other point with many is finishing.... you might get villas say for sale at the e400 - 5000 k and on up... but going through them if i was building a snagging list... which is basically what house buyers do... it would run sometimes to pages... garden not finished or maintained... some doors not fitted... electrical switches without finishing covers... garages without doors... and so on and so forth... try and explain that to even get close to justifying the price requested the house would have to be perfect ...so people would look at the views not the place with the missing skirting and all you hear back is that the wooden work surface came from mars and transport costs were more than the whole house is worth so that's all that counts...

so there are still no bargains to be had... only people that think there are

Italian prices are holding... where they should... because they have rarely gone up by more than inflation in this area in any case... and there are good value properties in good locations selling still ... and they always will

low value properties in low value locations ... i reckon for now at least until people feel a bit more secure about where the world economy is going in terms of their life will struggle as even getting the ryan air flight and staying in an hotel is costly enough that buyers scrapping to buy a run down house in a remote location at 35,000 euro will have to think carefully before making the trip... not wishing to put anyone dream down ... but maybe for the better in any case... as often they were being sold crap in crap places with even more s**t told to them about how easy it would be to restore it all and how costs here were low and it was another of those areas where buying early into the market would see values rising like Milan or London

well that's my opinion... anyway...

Fascinating responses so far.

It's definitely important to separate the domestic and foreign property markets in Italy. We bought our house and olive grove in 2004 for 8,000 euros. Now, a similar property would be worth at least 20,000 euro. It was not a wreck, just not of interest to the local market (then, now with the influx of foreigners, local families are also seeing the attraction of la campagna).

These prices are still affordable and suitable for our mainly young client base. We are seeing more people looking to relocate right now, rather than those just wanting to invest. If there is a massive worldwide recession, maybe more people will decide to get out of the rat race and choose a simpler life in Italy and other countries. The internet allows us to work at a distance so we are not stuck within the M25!

I find it hard to equate your pricing, when you say 20,000e for a habitable house ,and yet you have one on your website for 180,000 which needs restoration, so what would be an example of what you might consider habitable at 20,000e plse?
A

I never said habitable, I'm sorry if I didn't express myself clearly enough!

Our house was an old tobacco barn which was inhabited by the original owners in the summer during the tobacco harvest. It needed a new bathroom, plastering and painting, a couple of new doors but it wasn't a wreck like some properties we see!

A similar property on our site would be Papavero on our homepage.

[quote=Salento;93105]I never said habitable, I'm sorry if I didn't express myself clearly enough!

Our house was an old tobacco barn which was inhabited by the original owners in the summer during the tobacco harvest. It needed a new bathroom, plastering and painting, a couple of new doors but it wasn't a wreck like some properties we see!

A similar property on our site would be Papavero on our homepage.[/quote]
With all the new classifications going on, would that be classed as a warehouse though? Papavero I mean.

Personally I'd wait a bit longer if you can as prices are only headed one way. Interestingly, I'm hearing from agents locally that the top end of the market around here is holding up but that there's a surplus of places in other price brackets.

[quote=tennaval;93082]I would be very interested if anybody knows where you can get official data and statistics for the Italian property market ? (as opposed to websites with vested interests)[/quote]

There is a report issued each year by FIAP that states the prices in each town, separately for town and country properties, per sqm. 2008 prices will be released in 2009. Any estate agent who is FIAP registered should have access to the info.

tennaval... you might be interested in this...

[url=http://www.tutelati.it/calcola_val.asp]Calcola prezzo[/url]

never actually tried it myself but its supposed to calculate the value of a property...

the database for properties and their prices in Italy has always been a bit behind times...they still do things with paper here and have loads of clerks working by hand and calculators... the other problem is that its only recently that actual prices paid have been declared... so even the price databases are useless...

i would say the best practical way of seeing what prices are in an area is to use a national estate agent web site with no foreign links and compare...

the other points made...

i think its a myth driven by sales people to suggest Italians are not interested in country properties.... all around the cities are people living in the country in restored homes and new villas... many of them an hour or so from the city centres and prices in these locations reflect that popularity... other points that drive prices are facilities,schools,hospitals,work and weather... about the same as you find in the uk when looking at area prices...

where the factors listed above are missing it means that Italians do not buy... which you can look at in two ways... find areas that they do not buy in and buy there but then find that you cannot travel easily from it... to get to a decent hospital you have to go to another region... whats broadband.. etc etc etc...and the other point is that without Italians buying... the foreign market being a miniscule percentage of house sales here ...prices are never really going to change much...

prices in the marche say ... are not driven so much by the English or foreign buyer... its driven more by the fact that it is one of the regions renowned for enterprise here and is one of the only regions outside veneto and lombardy which is seeing huge immigration of workers to carry forward its business... so prices are rising because of demand ... and a shortage ... as city prices rise so does demand for the properties that allow you to escape ... and so it is driven

The official statistics would be very interesting, I wonder what ISTAT has.
I heard of an article (but never found it) saying that in 2007 10% of all property in Le Marche was bought by foreigners.

What is obvious in this area is that the buyers have changed. 5-10 years ago it was the Germans, in the last 5 years it has been mainly Brits, but recently the Dutch and Belgians are at the forefront.
The number of Dutch cars around here is huge. Roll out the Oranjeboom.

I think it is too easy to relate the undoubted recession in retail and car sales to the impact that this belt-tightenng will have on house prices in France, Italy and Germany. I have selected these countries because they have seen the slowest growth in property valuations over the last decade - and in fact German valuations have fallen over the last decade, rather casting doubt on the correlation which you are making.

I'm by no means bullish about the Italian market, but as adriatica frequently points out the foreign buyers are a very small percentage of national house transactions, and Italians have to live somewhere. Despite the low birth-rate the demographics of Italy (more people living as singles, more young people fleeing the parental nest, plus more city dwellers buying a country bolthole) underpin the lower end of the market. Of course, they don't underpin it sufficiently strongly to mop up the large numbers of new-built stuff created over the last few years, and there are some signficant bargains to be had in this sector.

[quote=Geotherm;93107]With all the new classifications going on, would that be classed as a warehouse though? Papavero I mean.[/quote]

I've been trying to contact the tecnico responsible for this property but he's away on holiday. Usually properties of this type are sold as houses, not warehouses, but I wanted to be 100% sure before responding to the thread.

I think it's important to remember that we are all living in different parts of the country which have completely different histories, cultures, architecture, economies and landscapes. Here in Puglia certainly it's not sales talk to say that Italians don't traditionally live in the country. We are in a very agricultural area but all the contadini live in town, not where their land is. New villas are popping up outside towns but in completely different locations that are desired by foreigners, much more on main roads and nearer town.

My personal belief is that the whole world is on the brink of economic and social collapse. This is one of the reasons that we left London 7 years ago, to live a life more connected to nature where we could be more self sufficient. We are meeting and hearing from a lot of people who feel the same way.

[quote=tennaval;93082]I would be very interested if anybody knows where you can get official data and statistics for the Italian property market ? (as opposed to websites with vested interests)[/quote]
The Land Registry is the place to go:
[url=http://www.agenziaterritorio.it/?id=2158]Agenzia del Territorio - Banca dati delle quotazioni immobiliari - Ricerca[/url]
The latest figures are for the second half of 2007 so maybe not as useful as they could be but you can't get more official than this. Fiaip also has an 'observatory' but it's stuck at the first half of 2007.
Also data are only as good as the source so if the source is misguided the figures are likely to be inaccurate too. They're probably OK for apartments in towns and cities but unlikely to be of much use in the country where every property is unique.

Giangi

[URL="http://www.picenehomes.com"]Picene Homes[/URL]

It's a hard one to call, although as I rent I'm not that close to the market. But every market is different as pointed out above: here in the VdA lots of money from Milan, or Switzerland even, for seconde case. The younger ones I know invariably have an inherited house. There's some new build where prices don't seem too bad (at least on those leaflets they stick under your windscreenwipers!) and an awful lot of doing up of houses, and rustici for sale with the resulting apartments often very small, and presumably meant for second homes.

Interesting figures on the agenzia territorio website. I wonder what they will say for the first half of 2008.

One agent I spoke to this week said that prices had fallen 16% his year. I didn't have time to ask if that figure was for Marche, AP or the whole of Italy.

I have a feeling that waiting for the right time to buy may be a mistake unless you are really in no hurry to buy. If the property is a good one at a reasonable price viz a vis the local market then buy it. I do find the semi-ruin purchase a bit difficult to comprehend particularly at some of the prices being asked - there could be troubles (and work) ahead, keep your eyes wide open at all times, leave rose-tinted specs at home and see lots of stuff - lastly have a red-hot lawyer working for YOU.

I mostly agree with Elliven. The right time to buy is when you find the right property for you, at the right price and when you have the right amount of money to do it. Granted that some prices may be down in some areas because not enough buyers are ready to take the plunge under the present circumstances. Also, some prices may have been inflated by locals who believe that British and Americans have all the money in the world to pay for nonno´s old ruin... but after a few months in the market with no takers they are going to have to "land". If anyone is looking for a property, take your time, be realistic about what you can do and, if your figures are correct, take the plunge. Use your heart and your head (plus the realistic contents of your pocket) to make the decision.

Some posters may remember I bought this subject up about a year ago. My theory was that the decline in US real estate was of such a magnitude, that it would have global implications. Reading the home page on this website, it seems those predictions were fairly accurate. I remember one poster saying he didn't care what happened in the US. So here we go "...I told you so!" Now is possibly the worst time to buy in almost all traditional real estate markets. House prices that appear to be holding up, may be doing so due to any number of factors, which I won't go into here. Predictions are that the subprime crisis was the tip of the iceberg, and that Pay Option ARMs are already reseting earlier than expected and account for a bigger market share than the subprime market. Add to that the economic slow down, falling stock prices, volatility in commodities, and the much debated recession seems a certainty. We have never been here before. Houses were meant to be lived in, and not behave like commodities.

So in answer to the question, "Is now is not a good time to buy?", unless you are able to find an area where prices have bottomed out, the answer for the cautious is mostly going to be "no".

[quote=jazzman;94684]We have never been here before. Houses were meant to be lived in, and not behave like commodities. .[/quote]

I think this is the crux of the matter. If you don't have to move, realise assets or whatever, if you are living in a house that has lost value it doesn't really matter. Holiday houses are another matter: fine if you can afford them and the increasing fares to get to them, and fine if you are able to rent them out. Judging by the moans in the local press tourism here is well down. I'd never regard one as an investment at the moment even if some people have done OK.

As for Italy, now in a recession or thereabouts, the property market is still healthier than it appears to be in Spain. Whether that is the nature of the respective markets (mass building of villas in Spain, for example) or whether there will be a correction here further down the line is another matter.

Drat, I must have matter on the brain.:-)

As sueflauto says, the Italian market is different from the Spanish one and even within this one the crisis has severely affected the large developments of villas and apartments in the "costas". There were simply too many properties for sale and neither the Spaniards, nor the foreigners are buying at the moment.
In other areas, the situation is not so difficult. The level of sales has dropped in some cases and it is true that it is taking a longer time to sell; however, good properties in good locations are being sold without any problems. Perhaps it is a case where everybody thought that they owned a top property and priced it accordingly..... well, surprise, surprise.
I think that the only properties that are going to have to review their prices in Italy are the ones that were not worth those prices in the first instance. A little bit of common sense is necessary and sometimes it is imposed by the circumstances.

"moved to italiauncovered.co.uk"