With so much negative media talk about the property market now, many people’s instinct is to hold off on their plans of moving. But let’s cut through some of the sensationalist hype. Property markets change, always have, always will.
In a sellers’ market, like late-2018 through to very early 2022 (particularly the COVID-led nationwide property boom from mid-2020 until the end of 2021), prices are rising, “listings” are scarce, and many buyers compete for few properties.
In a balanced market, as the name suggests, there is a steady balance of supply of properties for sale, and demand from buyers.
In a buyers’ market, the balance of power shifts to the buyers, as average ‘days on market’ increases, buyers are more scarce and more selective, and prices fall.
During 2022, Warrnambool and surrounds have shifted from a sellers’ market to a balanced market, and in recent months, more of a buyers’ market. However, this doesn’t mean it is not the right time to sell. In fact, the opposite can be true.
If you are selling and buying in the same market, it matters little if prices are up or down, as it is all relative – the only price that matters is the changeover price. In fact, a drop in prices can have you better off, given that agents’ selling fees and stamp duty are calculated by percentages.
Nobody has a crystal ball, and many experts have been wrong with their property market predictions in recent years. But I think we can be safe to say, with rising costs of living, interest rate increases, and on the back of the recent unprecedented boom, prices in Warrnambool and the district are not going to be sky-rocketing upwards in the very short term.
Commonly we hear that “property always goes up in value”. This is both true and untrue. Taking a long-term view, it is true as a general trend, however along the way there are often periods of price declines. The below chart shows Warrnambool property values over the last approximately 30 years, up until early 2022.
Below is a 10-year chart of the median value of all Warrnambool properties based on CoreLogic’s Automated Valuation Model as at the reference date. This is current right up to October 2022.
The 7% decline in median values in the most recent quarterly figures has been enough to scare some sellers into inaction, however it needn’t be this way – in fact, this can be fantastic news for sellers.
THE ANSWER?
Whilst the first part of the following equation can be a bitter pill to swallow, it’s quite simple:
- Accept the reality of the market and the fact that we can’t control it. Adjust your sale price expectations and reposition your asking price to the point at which it will sell in today’s, (not 6 months ago’s), market.
- Then be a cashed-up buyer in a buyers’ market, with an increasing selection of properties to choose from, and in a powerful negotiating position to pick up a great buy in your own time, without the stampeding rush buyers have had to endure in recent years.
OTHER PERSPECTIVES.
Not all sellers are buying back into the same market. Is it still the right time to sell, let’s say for example if you own an investment property that you are thinking of selling, or are moving into a totally different area? The answer is it depends on your individual circumstances. Ask yourself, “Is my life going to improve as a result of this sale?” If the answer is yes, price your property to sell in the current market and make the improvement in your life. A good perspective to take is to look at the price compared to 2-3 years ago, not 3-6 months ago.
No-one rings a bell when the market hits the top or bottom, and no-one has a crystal ball. This article is not about making predictions, but about making the best of current circumstances for your situation.
ONE MORE POINT.
As a seller in a buyers’ market, it is more important than ever to get the highest price possible.
At Wilsons, our SMART SALE method ensures this. It attracts, rather than repels, buyers. This is vital at a time when cashed-up buyers are thinning out.
For an auction to be successful, multiple buyers are required. When market conditions make it challenging enough to attract one good buyer, why rely on having to find two or more? Even then, the winning bidder only bids a small increment above the losing bidder, which is often thousands less than they were prepared to pay.
Of the thirteen local auctions in the last 2 weeks:
Five sellers had no result despite paying substantial marketing and auction costs, and now have homes on the market unsold and appearing unwanted. One sold under the pressure of the auction day for tens of thousands below their expected range. Three were either sold after the auction by negotiation, or with one bidder, rendering the actual auction process largely ineffective. Four had positive auction results, even what could be said are ‘high prices’, but will never know if they got the highest price.
Our SMART SALE is the best method when there are multiple buyers, and the only truly effective method when there is just one buyer.
In uncertain times, give yourself certainty. Our Smart Sale process is completely risk-free. We pay all marketing expenses, and if you don’t sell, you pay ZERO.
Written by Lucas Wilson
Click here to watch our Selling Video.
Contact us any time to discuss your options.