Our Changing Market
Our local property market has experienced many changes since our peak in 2017, I find that it is always constantly evolving and changing pace. Often vendors will make plans to sell when the market appears to be performing better than usual, but how do we know when that perfect timing is? Avoid getting too caught up in what the media is reporting, instead do some of your own homework. Pay attention to how long it takes for properties to sell in your local area, go to some inspections to see how many buyers are out and about, and lastly speak with an agent who you trust and pick their brain on what they are experiencing.
I closely monitor the market to look for changes, and at the end of December what I noticed was a potential recipe beginning to brew like the hot property market we experienced in 2017. There were strong attendance rates at open homes backed by healthy views online, the lowest stock levels we have experienced since 2017 and the average days on market were lowering. I predicted that 2020 was looking to be a great year for the sales market, and when chatting with many others in the industry they also agreed with my predictions.
My first 4 listings for the year were all really successful campaigns, all of these clients had the right motivation to sell and were realistic on their price, most importantly they were open-minded to listen to my professional advice and recommendations on selling strategy.
In late January I launched my first listing in Broadmeadow, a modern 4 bedroom townhouse listed for $610,000 and sold above the listed price for $617,500, in just 11 days! Early February 27 Bilba Cres Maryland sold very close to its listed price of $535,000 in just 15 days. And in the popular CBD suburb of Wickham, a renovated cottage went to auction with a guide of $650,000, selling under the hammer for $690,000. In March, a home in North Lambton attracted some strong competition between buyers, receiving 5 offers and selling $16,000 above the advertised range in just 6 days.
Suburb Comparison Snapshot June 2019 – April 2020
Please note: market statistics are based on Rp Data Core Logic during the stated periods. We have in preparing this document used our best endeavours to ensure the accuracy of all the information provided, we accept no liability or responsibility for any errors and recommend all recipients make their own enquiries to verify any information given.
Despite the recent health Endemic we have experienced, the rental and sales market has so far handled the event quite well. By early March I noticed a slow down on buyer enquiry rate, and by the middle of March the traffic through open homes became like a ghost town. By late March our team noticed an increase in tenants vacating properties in search for a more affordable property, and a reduction in new sale listings coming to market as the confidence to sell was low. By April, Domain recorded a jump in new rental and sale enquiry by 14% as social distancing restrictions started to ease.
On the lending side of things Corelogic RPdata have recorded an increase in mortgage activity increase by 25% compared to the same time last year. With interest rates being at record low rates, refinancing is currently making up 72% of loan activity, this is a staggering number compared to the rate of new loans for purchases being 17%. On a positive note, there has been an increase of 21% over the calendar year for loans used to purchase.
I believe that it is too early to predict how the Covid endemic will affect our market over the next 6-12 months, at this stage I am taking a week at a time and focusing on what is happening now.
My advice for homeowners planning to sell in the near future is to utilise this time wisely to focus on completing those unfinished projects. I assist many clients in providing ways to improve their properties value, If you are planning a makeover shortly then get in touch to see how I can help.
Thank you for taking the time to catch up on the changes to our market, I look forward to hearing from you when the time is ready.
Chris Arnold
Residential Sales Director
Arnold Property Sales
Let’s Talk Price
When selling a property, there is no doubt that every owner would like to achieve the highest price the market is willing to pay. If the market at the time is not a seller’s market then getting your price incorrect from day one could be detrimental to your listing, leading to price reductions or worst case, having to withdraw your listing from market. Before your property is advertised it is important that your selling agent has identified and explained to you what type of market it is, there is a seller’s market, buyer’s market and a buoyant market.
Even in a hot property market a home that is overpriced can take longer to sell than expected. When I meet with clients at the initial appraisal I always discuss the importance of setting their price accurately. I often see cases where the vendor may have been lured into the trap of appointing an agent who provides a higher estimate, If it sounds too good to be true then it more than likely is. This term is known in the industry as “Buying your business” If the market at the time is in favour of the seller then the agent might be able to achieve a sale. If they get it wrong then they will be pressing you to reduce your price. A price reduction is worst message you can send to your potential buyers in the early stages of your campaign, the key period to achieve the best result in my opinion is generally within the first 30 days. Properties I have sold in this time frame have been by far better results compared to properties sold later in the campaign. This early part of the campaign is crucial to have your marketing and your price spot on, as this is when you will receive a higher number of views online, a stronger attendance rate at open homes, If all this is working like clockwork then there will be a much greater chance to capture multiple offers, BUT! only if the price is right.
There are so many methods of listing your home, so how do you decide which is the best for your property. Let me explain some methods on how to set your price to achieve the best price.
Auction
An auction is more commonly used in a rising market, or a sought after suburb where not a lot of property comes to market. Occasionally we come across a really unique home which can be hard to find comparable sales to establish an accurate value. The ideal property types such as classic federation homes, deceased estates, homes on large blocks or corner sites and rare once in a lifetime homes. The benefits of selling by auction can be. Potentially a quicker sale outcome, higher result if there are multiple bidders, better clarity on the true market value the market is willing to pay, less chance of delays from buyers end as once the hammer falls the buyer is committed to your purchase. Some disadvantages could be. Not all buyers feel comfortable bidding at auction, can your buyer secure finance in time, If the property passes in the listing could go stale.
Set Price
At the start of my career this was my favourite method of listing. Nearly every time in any market type when I have set a property at an accurate set figure I have secured a result in less than 30 days. A firm set price provides a clear transparent message to your buyer that your home is great value and worth the price you are asking. This creates more confident and energetic buyers, and if there are many buyers that see the same value then there is a good chance you might receive multiple offers. The most common mistake when using a set price is, the old fashioned way of selling real estate by setting the price really high and be willing come down. If the price is set too high you run the risk of pricing yourself out of line to the market, which could result in the process taking many months longer than it could have or not achieving a result at all.
Price Range
This method became more commonly used around 2016 after replacing the method OFFERS OVER. A price range can be no more than 10% from the lower figure for example. $500,000-$550,000. If used correctly this method can be very effective to create strong interest and generate quick results. The range should reflect the owners exact expectations on what they are prepared to pay, however this is not always the case. I recommend a tight accurate range such as $515,000- $525,000, creates a clear message and not confusion. The more broader the range is set then you run the risk of losing buyers confidence as they don’t want to be let down by not being able to buy at the low advertised price. I often hear buyers tell me many stories that they feel they have wasted their time by enquiring on a property what they thought was in their price range only to be told that the vendors would not consider that figure.
Preview or Expressions of Interest
This method is commonly used in the industry either when the property is a new listing. It is a way of opening the interest up to the market for their opinion on price. It can be effective in a market where there is short supply, however it can backfire if it hasn’t created enough buyer interest. Buyers can shy away from listings with no price displayed, if this happens then you have effectively wasted the most crucial part of your campaign and could lose momentum on your upgraded listings. Our experience is that buyer’s don’t want to waste their time and want to know if a property is within their budget or not.
I don’t believe that one method is better than the other, there are many factors that will determine how effective each method will work. Some factors are things like, the supply and demand in your suburb, current market trends, the type of property, demographic of the buyer and the negotiation skills of the selling agent.
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