How to survive a property "shift"
PUBLISHED: 17:06 09 May 2011 | UPDATED: 19:20 20 February 2013
We hear a lot about buyers' markets and sellers' markets and the effect they have on property transactions. Ashley Young, of Welcome Homes Estate Agency, offers advice on how to handle these "shifts"
The property market has shifted dramatically over the past two years. Sales volume and the number of transactions have dropped significantly and buyers have never been more reluctant. Fear is rampant, anxiety high and developers are finding it nigh on impossible to arrange finance.
Does this sound familiar? It should because whats happening today has happened before and is destined to happen again. Property markets shift.
Shifts are never unexpected but rarely predictable. Its a bit like a train - you know one is coming, you just dont know what time it will arrive.
The strange thing is, each time a shift occurs, we act surprised, as if it has never happened before and once the shift is over we act as if it will never happen again.
The shift occurs when seller supply exceeds buyer demand (a buyers market) and buyer demand exceeds seller supply (a sellers market).
Why does the shift to a buyers market create pain? Two reasons. First it leads to fewer sales and less income in the market. Second, it tends to be abrupt. The misleading aspect of an economic shift is that it seems relatively natural and gradual when looked at nationally. However, when experienced locally it is usually dramatic and fast.
Several factors can cause an economic shift. Currency exchange rates and
political climate are the primary global factors. On a national level its interest rates and inflation. Population, jobs, and household income take centre stage at city level while at the most local level its neighbourhood dynamics and housing prices.
All of this boils down to buyer demand, which is driven by affordability and perception - how many buyers can afford to buy and how many think its a good time to buy.
The moment the media declares a Property Shift, its as if the market freezes and retracts. The result is fearful buyers, pickier buyers and eventually fewer buyers. They cant see the wood for the trees.
Because they dont want to pay too much for a property, buyers go too far, and if they cant get a great deal they just say goodbye for now.
When the market shifts, what happens is that instead of guessing where the peak of the market is, buyers now predict that there is no bottom.
The truth is, the market remains full of people who genuinely want to buy and sell. The big question is - at what price will they be able to achieve it?
A market shift absolutely reiterates the importance of pricing and marketing.
As an agent we know this, so we not only advise you on what your home will approximately sell for, but also the general pricing of the market.
In a shift the market becomes oversaturated with sellers who dont get this pricing and marketing right. If you want to become a true seller then you will greatly enhance your chances by using a competent, professional agent.
We look to have the right comparables which will make our analysis for you more accurate. To make your property comparable we will use four main factors: location, size, amenities and condition. In addition to this we will also advice on the direction and speed at which the market is moving.
Heres a hint - dont chase the market, let the market chase you.
For more information on your local property market or if you would like to discuss your home value and selling potential, please contact us on
0191 281 9692.
Ashley Young is an accomplished buyer and seller of property over the past 15 years, ranging from one-bedroom apartments to five-bedroom family homes. Homes have been bought and sold in Gosforth, Newcastle Quayside, Jesmond, Woolsington, Ponteland, Darras Hall and other areas throughout the North East.