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We think price is down 10%

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98 Windsor Crescent Surrey Hills, Jeremy Desmier, 1 Bidder, After Auction, within $3,200,000 to $3,500,000 quote range

98 Windsor Crescent , Jeremy Desmier. Despite a big crowd only 1 Bidder, bought after auction, within the $3,200,000 to $3,500,000 quote range

After a few weeks of not much, we at James Buyer Advocates bought three homes this week. Overall how we bought them sums up how we are currently finding bidding in the June market;

Lacklustre, little of it and light on.

98 Windsor Crescent Surrey Hills, Jeremy Desmier, 1 bidder – bought after, within quote range of $3,200,000 to $3,500,000

98 Windsor

11 Valetta Street Malvern, Hugh and James Tomlinson, 2 bidders – bought under the hammer within the quote range of $2,400,000 to $2,600,000

11Valetta

10 Munro Street Armadale, Hugh Hardy and Ada Taylor, 1 bidder – bought before, within the quote range of $2,500,000 to $2,750,000

10munro

A few auctions to go and we are currently negotiating on three off markets in the $6m to $12m range – but they are slow and there seems to be considerable distance between buyer and seller.

So to the market in June:

It’s still ticking over, but only just.

Overall it’s a building snowball of negativity; with low stock, low bidders and pricing within the range or below, more times than above the range.

Meaning that discretionary sellers are not coming to market, meaning there is little stock to excite buyers, meaning prices are falling, meaning the market is just ticking over with births, deaths and marriages, meaning that discretionary sellers are not coming to market and so on.

Quite simply the market is in a downward spiral and like a snowball, it is gathering more detractors as it rolls down the hill of price.

The Emotional Stages of a changing market.

1) The actual change (most of us don’t notice it has changed until after)

2) Ignore – we begin to think something has happened, but we don’t want to notice it

3) Disbelief – we know the market has changed, but we choose not to accept that it has for us

4) Acceptance – this is where almost all buyers and sellers are now at in 2018, with only a few disbelievers left

5) Actual change – (its going back up, but most of us don’t notice)

6) Doubt – we think the market is going back up, but we are not so sure

7) Argue – we know the market has gone up, but we are still looking for yesterday’s prices.

8) Understanding – we recognise we may have missed the boat again.

The Market Cycle

 

Why are discretionary sellers not coming to market?

Price is why?

For us, we see the price on many as 10% DOWN on last year – with a few exceptional A-Graders bucking the trend.

If the home doesn’t sparkle early in the campaign, it almost inevitably struggles and is then usually sold at a price representing a discount to the initial seller’s expectations.  Remember this graphic last month?

Stale Rate190518

This above graphic of 80% was a fortnight after the 10 pass-ins of the first week of the May 100 Auction test and only 2 had sold.

Since then 54 St Andrews, 14 Kalang Road and 37 Surrey Road have sold making the Stale Rate at six weeks after auction 50%.

Meaning if your home passes-in, then its a flip of the coin, if it will be sold within 6 weeks AND many homes are passing in.

As for price – 54 St Andrews is not stated, but it’s probably safe to assume, that like Kalang and Surrey, the sale price was below the bottom figure of the initial quote range.

This is why discretionary sellers are not going to the market, this is why the market overall is unexciting.

Seller price and risk mean discretionary seller hibernation.

Having said all this, apart from the May-day shocker (19th), the market doesn’t feel all negative – it feels listless, rudderless and generally a bit boring and tired.

It’s flat as a tack, no sparkle and yes no denying prices are continuing to fall on all except A-graders however, it feels like nothing more than a normal down market gyration and a quiet market IS expected at this time of the year.

Early Spring it will need a kick in the guts, if it is to reverse the price trend.

The population is still growing and if this continues, then the extra cash will have to come out of hibernation eventually – so that kick may well happen.

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