Do people really want to sell their OWN house?

Today I met a passionate lady who is launching a private sale company that, she believes, is going to take the market by storm.  And because it’s a private sale this will require the clients to sell their own house.  I’m not convinced that it will work.

In my experience many Sellers do not have the skills to successfully sell their own property.  Firstly they are not able to assess the true market value of their home and seem to always advertise it at a premium to fair value.  Secondly, they don’t have the marketing skills to present it professionally.  And thirdly, they cannot negotiate successfully to a conclusion which means they end up losing by either giving it away too cheaply or not finalising the deal.

And on the other side of the equation we have the Buyers.  It is also my opinion that buyers would prefer not to deal with private sellers because of all the reasons listed above.  And, they are also worried that they may not have the skills to negotiate strongly and could therefore be beaten by a stronger player.  For this reason they avoid negotiating directly.

But what do you think?

How much will your house be worth tomorrow?

Today I’m not planning to gaze into a crystal ball and predict wildly wealthy times in property.  But I can show you how the current market is giving me a strong indication of where it is heading.  This should help you to answer the question; “how much will my house be worth in the future?”

 

Being active in the real estate market at the moment is similar to riding a bull in a rodeo.  While this is something I have never personally done, watching it several times leaves me with the impression it’s a rough ride and particularly tough on the backside!  It’s the same with property at the moment – it’s a rough ride and very tough to endure.

 

You may be struggling to make the link between real estate and a hyper-active 1000 pound bull.  The comparison between the bull and the real estate market is that the feedback is instant.  If you were trying to ride a bucking bull in a rodeo you would make very quick decisions on what action to take based on what was happening at that moment.  Property is the same; your action should be based on what is currently happening.  And with both the bull and the property market, the current circumstances will show you what is about to happen.  Therefore, feedback leads to future direction.

 

So what’s happening in the Hamilton property market at the moment?  Believe it or not, buyers are buying and sellers are selling!  I have been tracking the local results and comparing them to the past 15 years of results and the trends of the past can certainly add to our view of the future.

 

In January 1992 the reported median sale price in Hamilton was $104,000.  For the next 6 years the median sale price rose steadily, reaching $165,000 in December 1997.  For the next 5 years the median sale price in Hamilton levelled, and did not increase at all.  And then the frenzy started, prices rose from $165,250 to $337,500 between January 2003 and December 2007.  This five year period saw a massive 100% gain in values.  And since January 2008 we have seen the median sale price in Hamilton level again, remaining around $340,000.

 

So the question is:  will this trend remain for the next 5 years?  The answer is: probably!

 

Don’t be tricked into thinking that this means the market is dead.  Let’s have a look at sales volumes during the same time.  During the first period of growth, between 1992 and 1997, the average annual sales volume was 3329.  Then, during the static period in growth between 1998 and 2002 the average annual sales volume decreased to 2677.  Obviously the frenzied growth we saw between 2003 and 2007 was a result of frenzied buying activity; the average annual sales were 4036 during this time.  And the next five years?  Well, my guess is that we’ll see sales volumes return to between 2500 and 3000 per annum.  That’s still a lot of buyers and sellers reaching agreement.

 

So how much will your house be worth tomorrow?  You can now make some strong assumptions based on the facts above.  Or maybe you’d prefer to go and find a hyper-active bull to ride!

 

If you would rather see these statistics in picture form, please phone me at the office and I’ll email you the graphs.