Sarenco, in Aug 2008 the price was only 5% below the peak in July 2007, certainly not 13%. The contract was signed in August which makes the average price 9% below according to this daft estimation:
https://www.daft.ie/report/alan-mcquaid, but in September the price dropped dramatically, to 15% or so. Mind you, these are average prices with significant intervals around them depending on the area I guess, so even 9% average would account for 5% in my case.
I believe that 5% below the peak price constitutes the "boom" price, considering that most estimations include 2004-8 period as the boom period, with 20% plus and minus off the peak price in boom price bracket. Therefore, the majority of people on tracker mortgages who bought during the boom, i.e., 2004-8, paid less than or the same for their houses as I did AND they they pay less now because of cheap trackers. I hope you understand my position, there is no silver lining at all. Even though I paid over 20% in deposit, I am still over 90% LTV and cannot switch. And I have 2 colleagues in very similar situation.
I also think I misunderstood the logic behind appraisal, if there is any. EA is against a buyer, his interest is in selling at higher price. I get it. The bank's interest is in appraising the collateral correctly - house itself is a collateral - because that collateral would go on its books for decades. Is it not? If a buyer goes under, it is in a vested interest of the bank to make sure that appraisal is correct, so that the buyer does not overpay otherwise the bank ends up with an asset that is less than its loan. i think it is reasonable to expect the bank and the appraiser to be on your side because it is in their interest, unlike EA. I get it that the banks might have been too optimistic in 2006-7, and that nobody could have foreseen the severity of the crisis, but there is no way they could not have seen it by mid 2008, the data were there. And there is no way the appraisal was correct if the price at which it was appraised in early August was more than 10% over the price for similar properties less than a month later, in September. It is like they did not care. My own impression from ten or so data points (houses) was that prices were in decline. The bank had 10,000s data points, clearer picture. In the end, I was convinced by the bank and its appraisal and decided I was missing something and the bank knew something I did not. Stupid, I know. But I always had an account with BOI since student days and sort of trusted them. In retrospect, pity I did not know about this forum, I became quite savvy reading various threads now alas too late.
My point was also that the customer pays for appraisal him or herself, it is somewhat weird that the appraiser is not liable to the person who pays for his services in good faith. If the purpose of appraisal is not to correctly appraise the price at the time, the customer should be told explicitly so that one can arrange her own appraisal.
I don't know how exceptional that US deal is, perhaps average would have included subprime borrowers, hence 3%. But that person has very similar income, deposit, actuarial risks, so I would have considered myself in the same bracket. Even if not 1.65, but 3% fixed for 20 years - I would have refinanced at that in Ireland. I often discuss this issue with colleagues from other countries because frankly it bothers me a lot, and it is gets embarrassing to admit how much they charge us here. And certainly, if 4.5% remains, and I cannot refinance with another bank, the whole thing becomes pointless so I would have to sell and look for greener pastures.
