I’ve decided I’m undecided

Solid numbers through the A-graders. The B and C's not so firm. There is buyer choice in the February market.

I’ve decided I’m undecided

Solid numbers through the A-graders. The B and C’s not so firm. There is buyer choice in the February market.

Welcome Back

Hope you had some sort of break, hey how good is the Chopped Salad (vego) at Mammoth Armadale.

Malvern East: We bought mid-week <> $2.5m. Congrats to Tiff and Alex and always a pleasure to do business with Ian and Danielle. Well done Gina.

Rae, Hugh and Gina @ 3 Parkside Malvern

With Geordie @ 21 Swinton Kew

Lily and Nathan @ 13 Barkly Armadale

Marcus @ 7 Howitt South Yarra

More transparent collaborations

The market on Feb 5^th feels less volatile, more capricious.

For those who can’t be bothered googling – volatile is all over the place but with a probable negative ending, whereas capricious means equally unpredictable however no ending bias towards the negative or positive.

Why is the market right now (February 5^th) capricious?

Buyer uncertainty

One week we’re dreaming of travelling the world again and the next week, we’re deciding not to go out to the local coffee shop.

Another week we’re cheering Ash and Rafa on and thinking hey the world is pretty good. Within a few days we’re back into a mental lockdown over our country’s leadership, begging for the politicians to be off our screens real soon.

Up Down Up Down

Interest rate talk, bank lending restrictions, poorer than expected results going into Christmas. Stock market going to hell in a handbasket, then flying again, within a fortnight.

Over Christmas it was meant to be dead, however we did more deals (5 = $16m) than we ever had (usually 0). Last week we bought a home – no buyer doubt – good price for both.

Maybe we are opening borders soon and that will mean overseas buyers returning – is that good or bad?

Up Down Up Down

90% Clearance Rate in October, 60% in December.

Two weeks ago, I was thinking mmmmm this market is shaping up ok.

Last week I thought no its not, it’s feeling lackluster.

On Saturday out amongst it, I changed my mind again with good numbers at some opens and quiet at others.

Up Down Up Down

As of February 5^th I’ve decided I’m undecided with no leaning either way – therefore I think I’m capricious, not volatile (despite what those pesky agents say).

Truthfully, I don’t feel positive or negative with any conviction. I really don’t know what this next month will bring. Like a good footy player, it will be one week at a time.

Supply imbalance.

Most markets of Melbourne’s recent past have been about a lack of supply. Lack of supply relative to demand.

Some anecdotal stats on supply on Feb 5^th.

We have 15 clients looking to sell their home – this time last year I think it was 6.

We have 15 clients looking to buy a home – normal levels, however not one of them is in bid – meaning with an offer – not 1 (yet).

Today I was out and about and before I left, I googled one of the more popular homes we were sale managing.

Wednesday it had one potential competitor, by Saturday it had ten on realestate.com.au

Now, that was not the case for every home we’re involved in, but it’s a stand up and take notice stat, that changed in the relatively short timeframe of 72 hours.

Above does not say to me – there is the usual lack of supply.

The above says to me yes there is a supply imbalance, but an unusual one (supply greater than demand). However, it’s only Feb 5^th – early days for the opening 2022 market.

Quick Initial February 5^th Summary:

Supply greater than demand is a no-brainer Mal – price drops!!!

I am not so sure.

The market feels capricious because that buyer demand is not as certain about life as it has been in the recent past. When people are uncertain, they act unpredictably. When the market is flying, dead or even volatile, they act or not act with more certainty. I am not sure buyers are negative, but they are cautious.

The market feels capricious because supply imbalance is very different than it has been for some time (seemingly greater supply than demand – very unusual in recent times). That means buyers have choice, making every sale no longer a guarantee, especially if you’re not an A-grader, AND especially if your price is not market tempting within your planned sale timeframe.

It’s buyer’s improved knowledge and skills of A-graders, B and C graders that make this supply imbalance capricious rather than volatile. There is no guarantee this market will be negative for all. A-graders should likely still be a battlefield.

Its seller’s (via good agents) improved processes that can still deliver good results. There is no guarantee this market will be negative for all. Sellers of B and C graders can and may still change price (quickly) or sellers of A-graders may not bring their homes to market after this initial burst, thus altering the supply imbalance.

The market has seemingly no distinct herd mentality direction up or down and the unusual supply equation as of Feb 5^th could go either way and quickly AND our TOP END INNER MELBOURNE MARKET is a sophisticated one, used to and somewhat skilled in changing circumstances.

What does it all mean as a buyer?

As a buyer you have choice – real choice.

As a buyer your competition will likely be less than it was recently – meaning price could be more malleable.

Despite the above 2 facts many buyers will see the market as a subconscious conundrum because they have that choice AND if they are alone (buying) they will lack vindication of the herd mentality on their action, making them feel even more uncomfortable.

If buyer uncomfortableness builds the market will fall as less buyers will act.

Yet the best buys can be when those around you feel uncomfortable.

Many of us would rather pay more in a group than less alone – it’s human nature.

So, it may mean right now as a buyer – good choice and room to negotiate!

And a meaning for sellers?

As a seller you have choice – real choice. You can meet the buyer on price, or you can wait to meet another buyer.

As a seller your competition (other sellers) will be more than it has been from June 2020 to October 2021.

Despite the above 2 facts many sellers will see the market as a subconscious conundrum because the market may not decide their home’s price or sale for them. They may have to do that themselves AND they will lack the vindication of the herd mentality, making them feel more uncomfortable.

If seller uncomfortableness builds, the market will fall as fewer sellers will act quickly and even more will fail to go to market – so restricting supply and the worm will turn again (the market is many things but never boring).

Some of the best sells can be when those around you feel uncomfortable.

Many (not all) of us would rather the group decides, even if it means less $, than a lone decision where we ask for more and run the gauntlet – it’s also human nature.

As of Feb 5^th, it may mean right now as a seller – you will have to monitor, consider and change prior to a sale (if you want one)! You may have to act rather than just shut your eyes and ears, cross your fingers and hope.