The Market So Far in 2008
We are now virtually at the end of February 2008 and where are we in terms of the property market? Depending on whether you choose to read one newspaper or another you could be forgiven for believing that the market was 'up' so far this year or on the verge of total collapse and you should ready yourself for repossession within the next 6 months. In fact a recent TV programme took as it's title 'Repossession, Repossession, Repossession' – no doubt a play on the maxim 'Location, Location, Location'.
Well I suppose I'm only qualified to voice an opinion on Ely and district and rightly so as that's the area I operate in. I believe that this is also the key to understanding what is actually going on and what you should believe about the fate of your property price. Some years back we had a Halifax agency within our business and we were once visited by a regional guy who talked about 'micro-markets'. What he was trying to say was that you have a UK property market that is sub divided down into smaller areas which have varying market conditions pertinent to all the other economic activity going on in that area, but influenced to a lesser or greater degree by national conditions. Put simply "Listen to the local agent that's selling houses!"
Since the start of the year (in and around Ely) we have found the market to be more difficult than 2007. We have had to go back to being estate agents again in the truest sense i.e. middlemen. We have needed to broker a transaction so that two people achieved a sale and a purchase. The market has not been dead, just short of first time buyers who are probably more confused than they've ever been. If they listen to all the advice offered to them they will be delaying a purchase until whenever or trying to knock, at the very least, 10% off asking prices! In general the massive reduction is not going to happen unless the property has been seriously over-priced to start with or they've hit upon the one poor soul who must sell at any price.
Are prices under pressure? I think I can best explain by citing a real life example. I won't quote names or exact locations but can assure you this tale is true. We began marketing in late 2007 a three bedroom semi at £196,950. There was limited interest and by late January 2008 it was obvious the property needed a price reduction to stimulate the sale. The price was reduced to £189,500 (I make that 3.78%) and we then had two potential buyers at that asking price. Have prices fallen? Well if you look at the bare facts, yes. If you agree that the initial price was not as advised then no they haven't! How was this transaction made to work? The vendor who 'lost' £7,450 on their sale was able to negotiate a better purchase price on their new home when they were actually in a position to buy, having agreed a sale on their own. To be fair this is not a market for asking over-optimistic prices. Test the market for 2-3 weeks if you feel your agent has not made a convincing argument as to why it should be pitched differently. But after that time react to what the market place is saying and get it into line with current conditions.
We've sold homes in Ely and district since 1991. So that's in atrocious markets and really buoyant ones. If you would like an opinion on your 'micro-market' please let me know.
I did some checking on figures. We actually sold more in February 2008 than we did in February 2007. Hang on a minute – the property market must be on the up!
David Clark and Company