Ninja in a Blazer – 20th October 2022
October 19, 2022November 2022 Real Estate Market Update
October 31, 2022When is a good time to sell?
As we are moving closer to the end of the year many of you might be considering selling your home and would love to know when the best time to go on the market. Over the past few years, we have found the market stays relatively busy until the Saturday prior to Christmas. This year it would be the 17th of December, from there buyers’ activity and inspection requests drop right off until after New Year’s day. However, every year as a business we still sell quite a few properties between Christmas and New Year, someone from our team will be working every day during the holiday period and will be available to arrange inspections as required. There is a significant reduction of listings hitting the market at this time, so if you’re already on the market, you may find people actually have time to look at properties over the break and can be more very committed to making the most of this time.
When is a good time to buy?
Domain released a great article recently that discusses the biggest question from potential buyers “When is it the right time to buy?”. As we are in a changing market, with the risk of house prices correcting each month, some buyers are waiting for the market to drop further and pay as little possible, however, with each rate rise a buyer’s ability to borrow will decrease at a greater rate than house prices due to the same rate change. Buyers will have to consider what happens if they wait too long and can no longer afford to purchase the home or investment they want. If you are looking to buy a home or investment speak to a great broker as they will be able to provide with you an idea on what you can afford currently as well as what will be the potential reduction in lending capacity on the future rate rise and based on that you can make a decision if you should buy now or wait for a potential drop in the market.
From personal experience, there is never a BEST time to buy as it’s very hard to ever predict when the bottom of the market will be and when it could potentially turn and rise once again. For example, prior to August 2020 buyers were too afraid to buy due to the uncertainty caused by Covid. Then in a matter of months, the market went up by 10% and kept on rising to almost 45% at the peak during the first quarter of 2022. If a homeowner or investor is financially secure, doesn’t face the risk of losing their job, and is comfortable with rate rises then this is as good of a time as any, provided you are buying based on a long-term view. Waiting for the bottom might save you $20,000, but if you miss it, it can cost you significantly more if you buy the wrong home due to the increased competition when it turns.
Why do agents get their pricing wrong?
Each rate rise directly impacts the property market and therefore It makes providing potential sellers with an accurate valuation harder and harder. As an agent in a booming market even if we make a mistake on the value of your home, chances are that we will end up getting you a higher price than expected due to the market conditions and multiple offer situations. However, in a falling market we use recent sales together with our market knowledge and make an intelligent estimate on where the market is currently heading to guide the price of your property.
When appraising properties, we have to look at the history of what relevant properties have sold nearby. We generally try to go back and look at 3 months’ worth of sales in a suburb, but with some suburbs, there’s not always a lot of relevant sales and we either have to extend to 6 months’ worth of data or extend into neighbouring suburbs. The further back the sales data we look at, the less accurate and relevant it would be in valuing your home. Basically, you’ve got to try to predict where the market will be before the market is there. No one is going to complain when their house achieves $100,000 more than they thought, but if they achieve $100,000 less…that’s a different story.
An experienced and “good” agent in the current market needs to take the time and have the ability to explain to you how it all works (show you how they came up with the price range) and what to expect and to come up with a strategy that will ensure that you get the best price that the market has to offer if you do choose to sell.
