It’s certainly an interesting time in real estate right now.
More than ever before, we’re being asked many times per day “What’s the market doing?”
The public interest around the ‘market’ has never been stronger and when most news mediums are running stories about ‘the market’ every couple of days, you know that it’s a topic that’s on the minds of many people.
I’ve seen news stories ranging with themes such as “South-East Queensland is in the worst market we’ve seen for 26 years” to “The South-East Queensland market is starting to boom due to increasing interstate migration levels and the commencement of several large-scale projects that will create massive numbers of jobs”.
So, who are you supposed to believe?
With a looming Federal Election and possibly changes to Negative Gearing Tax Concessions, a tightening of lending criteria due to the Royal banking Commission and the Sydney and Melbourne markets freefalling at a reasonable speed, there’s plenty of trepidation about where the market is at right now and where it is heading.
My team and I are fortunate that we list and sell properties of all different types, in many different areas and at many different price points.
We have listings from Morayfield to Clayfield, from small units to luxury homes and properties priced from mid $200,000’s to somewhere around $5 million.
It’s fair to say that we see a wide variety of scenarios and there’s a few media outlets that contact as regularly as they see us as a good barometer for where the market is at, especially given we aren’t confined to a very local area in a reasonably limited price range.
As such, I thought I’d offer an honest and straightforward analysis of some of the myths in the media and highlight to you our current experiences of what we’re seeing right now…
- Let’s start with the big one… “South-East Queensland is in the worst market we’ve seen for 26 years” – Definitely a load of garbage! One of the examples used by the media to illustrate this story was a property on the fringe of Brisbane city that attracted very few buyers and 12 months ago, apparently the same sort of property would have been filled with people at an open home. Last week, we listed a very similar style of home in a very similar price range and conducted our first open home last Sunday with 24 groups attending, 6 offers and a contract that was well above the asking price…and we listed it at a figure that was a fair bit higher than what the sellers initially thought it was worth. We’ve just sold another property this week that’s a little further out (in the Moreton Bay Shire) – first listed last week, achieved 11 groups through the first open home and was sold with 3 offers and at a price that’s a little above the asking figure. Sure – results like this aren’t often the norm right now but there’s still very solid activity in some segments of the market and hardly a case that “no-one is buying” which is what was represented in this new story.
- “Average Days on the market are increasing and properties are taking longer to sell” – Yes, I’m not going to lie – this is true in many cases. We’ve noticed that buyers are generally slower to act, take a lot more time looking before making offers on properties and there’s a general tendency for buyers to feel that there’s no need to rush as it’s likely that the property they are interested in won’t be sold quickly unless they experience another 23 groups at an open home (like the example above). Many open homes are not flooded with people and like I’ve mentioned in one of my blogs around 5 weeks ago, it’s so important to engage an agent that’s going to be strongly focussed on how to attract more buyers to your open homes and in doing this, create a lot more buyer competition.
- “Prices are freefalling and the Brisbane market is down by 5-10% over the past 12 months” – Definitely not true at all. If you want to analyse cold hard statistics, the Brisbane market has still seen growth over the past 12 months (albeit very small net growth but it’s still growth). An as agent, I can tell you that we’re honestly working harder than ever before but the prices we’re achieving for our sellers are still as high as ever and, in many cases, still breaking records for suburbs, estates and individual streets. This is not meant to be a ‘self-pitch’ as we’re seeing selected other agents achieving great prices as well but if you list your property with an agent that carries a belief system that you should list your home on the internet with average marketing, analyse the market and take the best offer that comes your way within the first 14 days, chances are high that you’re about to lose a lot of money. The lazy agents (and there are plenty) are full of ‘doom and gloom’ and spend most of their time trying to ‘condition you down’ the second you sign the listing paperwork with them. I cannot tell you how many ordinary sales results I’ve seen where owners take far less than what they should be pocketing because their agent lacks the skill or willingness to achieve a great result for their sellers.
- “Buyers are making low offers right now as they are fearful of over-paying for a property” – Yes, no doubt about it – this is correct! Here’s where a good agent is worth significantly more than the commission you pay them. Does the agent take an offer and try to jam it into the seller…relaying the mantra to the seller that the buyer concocts about why their offer of $40,000 less than asking price should be considered as the market is on the slide…or does the agent fight back with statistics, examples of other recent sales in the area that justify the owner’s asking price and tough negotiation in order to bring the buyer up to a price that they (the agent) would proud to declare? In a time when buyers are more fearful than ever of paying too much for a property, one of the main things that should be the focus of an agent is to create a solid defence of the owner’s asking price and an explanation of why a buyer would not be paying too much of they were to pay this amount of money for the property. It can be the difference between achieving $40,000 or $50,000 for a property and I swear that this is not an exaggeration.
- “The number of buyers and enquiries have dropped significantly” – This is an interesting one and hard to form a solid opinion. Already this year, we’ve taken more phone enquiries, more e-mail enquiries and had more buyers through our open homes (in total) than we have ever had before. In saying this, we also have more properties for sale that we’ve had at this time of the year so total numbers are not really a true indication of where the market is at. If we take out the top 25% of the open home success stories, the average number of buyers we’re achieving through our open homes is around 3 per property (per open home) this year so far…hardly huge numbers and yes – this number is lower than what it has been over the past couple of years. Certainly, we have plenty of discussions with our sellers that are concerned that things are grim when in reality, the numbers achieved (compared to other properties of a similar nature in a similar area and price range) are almost identical. Last week, I had a seller that was concerned that we had only 6 groups in total through the first two open homes so I called two other agents I knew that had homes for sale (one in the same street and another just around the corner) and each of these properties achieved numbers through their last two open homes (combined) of 1 and 2 groups respectively. On a more positive note, I can tell you that the number of inspections we conduct before we sell a property (I call this our ‘strike rate’) is running at a much better number than previous years. In other words, we’re taking a little longer to sell properties but on average, it’s taking a total lower number of buyers through open homes before a contract is secured.
If you’re thinking of buying or selling right now, I hope that this information is of benefit and you can put much of the media hype into perspective when you’re making your decisions.
Until next week…Happy Listing and Happy Selling!