Property Market Predications for 2012
One of things that made 2008 such a difficult year to sell houses in was that sellers were inclined to think that house price falls were temporary, and selling your home for less than it used to be ‘worth’ at the peak was unthinkable.
Buyers on the other hand were watching the collapse of Northern Rock, the withdrawal of 95% mortgages and the rapidly deteriorating housing market thinking, “If I buy now, my home will be worth less than I paid for it, so I’ll wait and see what happens.” It is this disconnect between buyers’ and sellers’ expectations that makes for the real challenge for estate agents trying to do the best for their clients I see a lot of similarities between where we are now and where we were in 2008.
We have a serious financial crisis and stagnating economic growth. But far from being pessimistic about the prospect for sellers, I believe that there are some fundamental differences which will help sellers in 2012.
Moving home in a falling market
Firstly, buyers and sellers have a similar outlook for 2012. Both expect 2012 to be tough. That helps hugely, because most sellers are buyers. In a falling market, if you have to take a 8% reduction in price on your own home and you can secure a 8% reduction on your onward purchase you will end up with a SMALLER mortgage than if you had got your asking price and had to pay asking price.
If you happen to be in the position of selling your home, with no immediate plans to re-buy, then it makes sense to take today’s price because tomorrow’s price could very well be lower.
Current climate in vendors favour
Secondly, buyers don’t have it all their own way in the current climate, due to a shortage of properties on the market. This means that there can be competition for the right property in the right areas. I’m not talking about competing bids (although it does still happen).I am talking about a buyer wishing to secure a property that is appropriately priced, and new to the market.
This kind of buyer will pay much closer to the asking price this property than they would for one that has been sitting on the market for 12 to 16 weeks already. If you, the seller, receive an offer and you have three other viewers booked in for the following weekend, you will be less likely to negotiate and the buyers will have to pay closer to the asking price to secure the purchase of your property.
My advice for 2012
Price appropriately to your competition based on similar houses that have sold.Don’t be too distracted by properties that have not. The first four weeks of marketing is critical. This is the only time that you will have the upper hand in negotiations.
But be careful, the first interest is ALWAYS the best, because you have all of the buyers looking in your area to talk to. After all of them have seen it, you are reliant on new buyers entering the market to look for property, at which point your house is just another one in a challenging market that hasn't sold.
Make sure that your estate agent is truly proactive. It is the only method that pushes your home to the front of the queue. Simply being on the internet doesn't make your property stand out. Walk past their office, if they aren't on the telephone,they are not selling houses.