The Real Estate Market

  “SO HOW IS THE MARKET?”

The most commonly asked question real estate agents get is “How’s the market?” or “What’s happening out there?”. And quite often the answer is “ticking along” or “yes things are good” but how often are you given some real facts with supporting data?

Well here it is. The fact is that all markets are driven by the ratio of supply and demand.

Consumer Demand

The market demand is showing signs of steady improvement. The average number of sales over the past 4 months has reached levels not seen since 2007 when the world markets crashed. The improvement is across the board in sales of sections, and of lower, mid and higher values homes.

Driving this improvement has been

1.       The steady migration of retiring Aucklanders where prices have remained fairly stable and are on the rise. Aucklanders are often telling us how affordable our homes are compared with four years ago and how they can now afford to retire here.

2.       Interest from overseas particularly from people from Australia, Australians are enjoying the opportunity to buy property in New Zealand at a market low and take advantage of a strong Australian dollar

3.       Enquiry from people seeking sanctuary from the devastation in Christchurch.

4.       Banks becoming more willing to lend again

5.       Vendors being competitive with their prices

With so many baby-boomers reaching retirement age over the next 10 years and Kerikeri being a popular retirement destination one could assume that we are poised for more growth.

Property Supply

The supply of homes for sale has been diminished because sales volumes have steadily outpaced new listings. Purchasers are finding it difficult to find a suitable newer home. The supply of newer homes (under 10 years old) is at a 5 year low because building consents have dropped by more than 50%.

 The table above shows the time to sell our inventory of listings at the rate of sale for the prior 6 months in 2010 and as it stands currently.

Looking at the highlighted area, one can assume that if the same level of sales occurs over the next 6 months as the past 6 months, particularly in the $350,000 to $600,000 range, then purchasers will have very little choice of new homes at all.

So what does this all mean? Some people will see this as a SHIFT in the market. Builders are already purchasing land at 7 year low levels and preparing to build new homes for this hole in the market. Investors are showing interest in building spec homes to increase their returns over the meagre term deposit rates. People are telling us there is a different feeling out there from the last few years and we have to agree.  Hopefully we see more people smiling.

   WHY NOT TO SELL PRIVATELY 

A person selling their home would like the best price they can get, so the idea of selling privately seems the obvious answer. Put an advertisement in the paper and online, clean the house and wait for the phone calls. Seems simple enough, but private sellers are putting themselves at risk by not using a licensed real estate agent. One of the biggest pitfalls for people selling privately is under selling their property.

Potential purchasers of private sale properties all know that the sellers are not paying an agent so they immediately deduct an amount equivalent to the agent fee and then negotiate further from there.  The buyer wants to benefit from the seller not paying a fee thus cancelling out any perceived saving.

Many sellers don’t understand that over pricing can actually result in them getting less for the property than if they had priced it correctly in the first place. Knowledgeable buyers often won’t bid on an over priced home. By the time sellers realise and reduce the price to where it should have been in the first place, potential buyers will have bought other houses.

A real estate agent has the skills and experience to help the vendor assess what their property is worth and ensure they market it at the best possible price. Listing with an agent increases the pool of buyers significantly as they have the resources and networks to cross-sell, and experience in the local market.

One of the things private sellers overlook is the safety of having an independent representative show your home to strangers and screen buyers before they enter your property. There are real concerns about security and safety. A real estate agent has an office where they can meet & vet prospective buyers and will accompany them to viewings.

‘Selling your own property on-line rarely achieves the best result.. You can promote your property on-line, you can get information on-line but you can’t sell your property on line.’

Selling property involves building rapport and trust with the purchasers. Skilled negotiation by a neutral party who doesn’t have an emotional attachment to the property  has been proven to achieve the best result for the vendors.

Agents get paid a success fee, which is only paid when and if they achieve a sale price on the terms that are acceptable to the vendor client. No sale, no fee. It begs the question, what have you got to lose?

Interest rates

In the early 1980’s interest rates were around the 21% per annum, today they are under 6% and our floating rate is the lowest we have seen in this period.  If you grew up over the last 30 years you have seen interest rates steadily come down as well as the inflation rate.  Where do you think they are going to go from here? Is it time to buy at these low prices? Should you fix your mortgage at these very attractive rates?  The choice is yours so choose wisely.

Fair Market Price:

We often talk about values on your property in terms of market value, rateable value, forced value, and now we have the term “fair market price” used a lot more.  When we appraise your property we use current data in terms of sales of similar properties sold or listed in your area. We compare your property and adjust where necessary including current buyers inquiry to arrive to a realistic market value.  Fair market price is based on having two willing parties agreeing on a purchase price that is acceptable on the day.  What is acceptable on the day is often driven by your own personal circumstances, goals at the time, and the information available to you.  Some people say that in this market (buyers market) the purchasers dictate the price but if you think about it, it’s the vendor that accepts the offer on the day. Just remember if you buy and sell on the same market nothing really changes except for you address.

Free Appraisals:

If you are thinking of selling and need advice on marketing, presentation, timing and price we are happy to view your home and give a free written appraisal.  Homes are selling fast and we need more listings with the current buyer’s inquiry. Don’t forget that we have a free house moving trailer available for you if you move within the Kerikeri district.