oc | Saturday 19th October
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Are you noticing the subtle changes of the differing PPP markets?

Peter Kakos sells 23 Albert Street, BRIGHTON under hammer with 3 bidders

Auctioneer Peter Kakos sells 23 Albert Street, under hammer with 3 bidders. This home couldn’t sell last year as land – a makeover and a creative campaign by Kate Strickland, 3 bidders and sold.

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Iain Carmichael sells 3 Plant Street, Malvern under the hammer - $3,460,000, 3 bidders

The Lone Tiger at his explosive best – 3 Plant Street, sells under the hammer – $3,460,000,  Iain Carmichael, 3 bidders

So at 6.00 pm the James Buyer Advocates Clearance Rate was 83% and James Bidderman was 2.5 bidders per auction on the 24 auctions we covered today. Mmmmm on the face of it very strong and it is; BUT……………..

Markets, markets, markets.

During the week, before getting crunched at today’s 507 Royal Parade Parkville auction,  Craig Shearn of Jellis Craig put the fragmenting PPP markets into succinct context.  “Mal I think if anything the north is picking up here, as when I talk to the boys in Boroondara they are finding things a bit tougher. Its still good, but they are no longer full of the glory stories, week in and week out.”

Now I’ve taken some license with his words and paraphrased a bit – but I think it sums up the markets – they have, in 2016, become a lot more interesting.

Footnote: Craig Shearn was spot on re his advice on price, knew who his bidders were and gave a very polished auction performance. From my point of view it wasn’t enjoyable to watch, but it would have been so for his vendor. Hats off Craig!

We’ve prattled on week in and week out re A, B and C graders and the way Price points, Property types and Positions (3P’s) are performing very differently from each other in 2016 – which is a sign of a changing market.

In our opinion the Top End (7m+) has cooled, but it can be confusing for some buyers when we say that. We can’t prove it in the stats yet (lag with price reporting) and of course the K&B and RT Edgar Mexican Waves are still fully operational.

Now that is very different in our opinion from the $3m-$6m market in exactly the same areas, which has good bidder depth from locals on A graders and some B graders.

However, what we can show statistically, is some really interesting positional market differentiations, that buyers need to understand when they are pricing and bidding as we go into Winter 2016.

History: Remember these slides below in March 2015 James Market News. They were graphics that started a lot of work for us showing new buying clients they actually had alternatives in a booming market.

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Now in 2016

Here are some more James Buyer Advocates graphics to show how the worm is turning and how we at James Buyer Advocates are showing Values and Pricing to our current buying clients. All data below is Jan – May 2015 v Jan-May 2016.

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Hey please don’t use stats the wrong way – don’t be too specific as it will bite you – use stats for trend highlighting.

And what the agents know, what we at James Buyer Advocates know and what you as buyers should know is – that while the overall markets are appearing to be “steady’ish”; if you break it down geographically (Position P) you will see ups and downs and if you break it down to home types (Property P) and price points (Price P) then you will see further differentiation from 2015.

We do this on all pre negotiation values and this is only two suburbs and only on land values.

Source: All stats used were REIV and blocks of land were selected as those having a square box on them in the advertising – not too scientific, but close enough and reflective of what we are seeing on the streets.

Why is this all important Mal?

See below. If you lived in Brighton and wanted to move your family near Carey and you thought the local Bayside market reflected what was happening in Balwyn then a smart agent could be showing you some historic information resulting in you paying $333,360 more.

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Of course you may decide not to pay it and another buyer does, as there are still sales over $3,000 per sqm in Balwyn. The point is not that the above graphic is 100% foolproof, cast iron guarantee on what will be happening to every block on land in Brighton v Balwyn – of course not. But it does show you that in 2016 you have alternatives – there are more blocks selling for less in Balwyn.

If you lived in Balwyn and you wanted to move your family to be near Brighton Grammar and you thought the Balwyn market trend of 2016 reflected the Brighton market, then you would miss out at every auction – as there are more blocks selling for more in Brighton.

When valuing in today’s market prior to beginning negotiations before auction, at auction or in off markets/private sales you want to know.

1. What is really happening not just in the overall market, but also in your little patch, for the type of property and at the price point you want to buy.

2. That ancient history may be as close as last year and no longer relevant.

3. What the agent is seeing v what the agent is saying.

1 Guildford Road, Surrey Hills passed in at $1,850,000 and sold after auction for an undisclsoed amount north of $2,000,000

Mmmm, are you in buddy gestures Richard Earle.  1 Guildford Road, passed in $1,850,000 and sold after auction for an undisclosed amount north of $2,000,000

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St Kilda West, 231 Canterbury Road (Andrew Stuart) – After Auction $4,850,000, 3 Bidders.
There is a sense of grandeur when entering the property at 231 Canterbury Road, St Kilda West.

Malvern, 3 Plant Street (Iain Carmichael) – Under Hammer $3,460,000, 3 Bidders.
As a few drops of rain fell, the crowd gathered under their umbrellas and hoped it would hold off for the coming minutes, while some stayed in their cars for a dryer outlook. 

Parkville, 507 Royal Parade, (Craig Shearn) – Under Hammer $2,935,000, 2 Bidders.
Was today a day better suited to rain related nursery rhymes, or even an early holiday at Roland Garros (I hear the warmer weather calling)?

Click here for all 24 James Buyer Advocates auction reports

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Camberwell, 19 Lansell Crescent (Doug McLauchlan) – Under Hammer $1,950,000, 5 Bidders.
A good-sized crowd gathered on this cold and wintry morning, with many neighbours bolstering the numbers.

Brighton, 108 Head Street (John Clarkson) – Under Hammer $1,950,000, 5 Bidders.
“It’s the vibe of the thing”. The vibe was shimmering, omnipresent, all encompassing because there are lots of bidders here, I can feel it a block away as I’m walking toward Head street … 

, 12 Alleyne Avenue () – Under Hammer $2,470,000, 4 Bidders.
It’s all Melbourne chic in the suburb of Malvern on this morning.

Click here for all 24 James Buyer Advocates auction reports

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Hawthorn, 32 Hawthorn Grove – Passed In $5,725,000, 1 Bidder – Did sell after.

Armadale, 526 Orrong Road – Passed In $3,000,000, 0 Bidders

Balwyn, 40 Metung Street – Passed In $2,800,000, 0 Bidders

Click here for all 24 James Buyer Advocates auction reports

Warwick Anderson sold 12 Alleyne Avenue, Armadale under the hammer for $2,470,000 with 4 bidders

Warwick Anderson sold 12 Alleyne Avenue, Armadale under the hammer for $2,470,000 with 4 bidders

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Decisions with Numbers 

As James Buyer Advocates we are engaged by our clients to help them get what they want.

How do they do that in this complicated, information overloaded, emotion charged and distracting world?

Our James Home Ratings framework using LIEs (aptly named hey) Logic, Intuition and Experience and lot of it is simply in a very tight number decision framework.

Our buying clients make the good decisions they need to make through our robust Ratings framework.

Numbers and one in particular is at the heart of our decision making platform.

I love numbers – I am a person who finds great comfort in them.

They give me stability when words and actions often destabilize.

But I’m not talking about the sort of numbers you may think – while dollars are numbers, I personally find they cause more trouble than they are worth on many occasions.

I find the numbers attached to dollars are far better as facilitators, rather than decision makers.

So what numbers am I talking about and in particular what is my favourite decision making number?

It is the number 3.

Why?

I believe it’s a contemplative and wise number – it’s full of alternatives, but not too many – it can give a thinker or non thinker comfort as it allows them to move on without too much pressure.

In other words 3 pieces of information or 3 options at any one time, in a framework that bring on another 3 and another 3 until the desired outcome is achieved.

2 pieces of info or options – is the number most used by impatient people – it’s either black or white – all computers use 2 in decision making. It can be hard and aggressive – there is little room to ponder on the number 2. Please in some James Buyer negotiations we do use 2 – yes or no – but its aggressive.

On the other hand 1 is boring or restrictive and can be dangerous and 4 is not conducive to complicated human decision making.

Try it – put 4 pieces of info in front of you and decide – now take one piece a way and see how you go.

Take the piece of info you took away and put it with two other pieces of info/options on another table.

Now ponder and decide again.

We have found you will make quicker and better decisions with better thought processes, when you have two lots of 3 than one lot of 4.

3 is a number that allows for good decisions.

Here are a few three’s;

·      No. Maybe or Yes

·      Below, Average or Above

·      Yesterday, Today or Tomorrow

Our James Home Ratings (which we patented) revolves around a 3 x 3 decision matrix.

And it has a number – eg 729 at the end to give Clarity on a complicated assessment. But really the number reflects a version of A, B or C grader in its current form A B or C is 3.

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James Home Ratings is number based, however we use colours to allow decision making to be more user friendly for our clients in high stress situations;

·      1 is Red

·      2 is Grey or Amber and;

·      3 is Green.

Just like a traffic light.

We use a combination of 3 to help you balance your decision making – logic, intuition and experience.

We use a 3 in outcomes, Emotional, Financial and Physical.

We use a home characteristic PPP’s – its big picture and simple. For instance it’s the 3 Ps that not only describe a property, but they also describe a client and therefore the 3 Ps become an action decision tool in the matching process that connects buyer and property in a desired PPP outcome. 3P’s give you good leverage to make clarity decisions on your initial search options. Writing down a list of 20 requirements becomes impossible to deal with, until you distil them into 3 PPP’s.

And a Good Outcome comes from an Above Average Logical Decision PPP with an Intuitive Yes bought with experience on Tomorrows needs (1+1+1). The 3 green lights above.

Many of our buying clients may not know about the 3’s – its not something we explain – it is something we do.

Our James process is also a 3 – CAN. Clarity – Assess – Negotiate or more simply but less eloquently put. What do you really want – is this it – and how much. We don’t get to “how much” until we’ve worked through what do you really want and is this it and usually in chunks of 3.

This system has remained basically as is for over 10 years, as James Home Ratings has.

In all decisions we try and give clients 3 options.

In all processes we try and have 3 alternatives.

Why do all this?

Humans, buyers, can’t take 147 pieces of information and make sense of it – so therefore many buyers ignore a lot of good stuff  – they do this from mental fatigue, lack of concentration discipline and/or ignorance, nothing else.

We at James group info/options etc into manageable chunks in an ordered framework, so as a client can move forward or backwards – but always move (when the time is right – the third alternative is still to do nothing, but it’s an active do nothing if that makes sense – see almost always 3).

That is James Home Ratings.

You can’t get to where you want to go in any outcome without movement.

Movement comes from a decision. 

The higher quality your movements, the better your outcomes.

We talk about 3 group outcomes (Physical, Financial and Emotional). Now is that a Law of God split or grouping? – no – its just a way for our clients to take in, assess and respond in an informed way.

Our pricing has 3 levels Lower, Middle and Upper.

1 option is too focused and therefore blind to a wider range of pricing options. 4 levels of pricing would be confusing.

Our negotiation strategies generally have three options but yes for every rule, we break one occasionally as 2 is used (take it or leave it is only 2 isn’t it)

1 is too predictable in negotiations and and 4 is too many (I’m not that smart).

We can all make good informed decisions with the right help.

Our James Home Ratings is a scientific system based on numbers to give structure for our clients, to allow them to make the informed decisions they want to make, that will get them the desired outcomes they want to get.

In some religions 7 is a beautiful number, in some cultures 8 is a lucky number but for James Buyer Advocates our beautiful and lucky decision making number is a disciplined 3.

 

Two Housekeeping notes:

* This was our last public James Marketnews Insight till July 30 – for up to date market movements please contact our client desk on 9804 3133.

* Last night we were invited to the inaugural Marshall White Foundation Dinner at The National Gallery which raised a lot of money – 100% of which goes to fund projects related to Homelessness and others. This is a James Connell initiative and should be supported, as it gives more than lip service to fellow human beings not as lucky as us. So hats off to James, Jack, Zali, Kathy, Stephen, Anna, Michael and no doubt a bunch I’ve missed. We are on different sides, but we can recognise great work when we see it.

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