Date Published 08 April 2008
Market Overview and Monthly Update
In spite of the credit crunch resulting in a more stringent mortgage environment, sellers are testing the market at prices still remarkably close to the peak of last year’s boom. Most sellers coming to the market seem to be ignoring the increased competition from other unsold properties and the challenge buyers now face in obtaining a mortgage. As many of these sellers are likely to be buyers themselves, they seem to be trying to bank a higher figure for their home but want a bargain when they buy. It’s human nature, but in the current market, sellers should price below their competition to achieve more interest now and avoid a larger price drop later in the year.
The challenge to sellers is to get smart and accept this new reality. The best price sellers can achieve has fallen - though they won’t lose out if they are then planning on buying as well. Smart pricing is required and should take into account recent comparable property sales, buyers’ affordability constraints and competing properties on the market. Fortunately levels of new listings remain limited by market conditions, the costs of providing a HIP, and drastic cut backs in new homes. These factors will help prevent excessive over supply from causing the sharp falls seen in many areas of the US housing market.
Over the past month, time on the market has seen a substantial drop to 82 days from 93. Whilst this is to be expected at this time of year due to more sales than in the quieter winter months, this reduction shows there is a positive base of activity in the market if you are willing to price intelligently.
As the credit crunch shows no sign of easing, there is a risk that lending criteria will tighten even further, causing more damage to the market. Some properties may effectively become un-saleable as potential buyers cannot get a mortgage. If we are to avoid a period of stagnation, as a matter of urgency, sellers need to price more realistically now rather than later in the year.
Here at Able Estates we feel that it is important for you to make the right decision on which agent you chose to market your property, we regularly keep in touch with the markets ongoing trends and find ways to market and sell your property using our unique selling skills. We are also local agents who employ local people with vast knowledge on your area to answer any queries and questions to your potential buyers.