The market has definitely settled down, without a doubt. Buyers are frustrated and exhausted, plus there’s been a natural weakening in the marketplace as more homes are listed in recent weeks. But a warning to buyers hoping to pick up a bargain in the near future, you might have to think about buying sooner as aggressive prices are still being achieved for the most desirable homes.
There definitely appears to be a clear distinction between the ‘class’ or ‘grade’ of homes on offer and the temperature of the market.
The ‘A Grade’ properties are boiling hot. These are the ones where all the work has been done, they are presented beautifully, often staged and have no problems with a pest and building report. They also have the most buyer enquiry and achieve the best prices. Then there’s the ‘middle class’ which is what we are calling a simmering market. These properties may not be presented or marketed in the best way but are selling well. And finally, there’s the ‘C Grade or Lower Class’ of property which is experiencing a lukewarm market. Just 6 months ago during Autumn buyers were paying premium prices for this type of property. They are the ones that are in need of renovation, are on main roads or have inherent problems. Everything was selling then! Now days, these properties are taking longer to sell again and not for the record prices when buyers were trawling listing websites during lockdowns and suffering FOMO – fear of missing out.
It hard to say and predict what is going to happen this Summer and it will depend on the number of properties listed and how strict lending institutions will be, but one thing we do know is that buyers have become more competitive for the ‘A Grade’ listings and seem to be holding off for ‘C Grade’ listings in the new year hoping to bag a bargain.
Buyers salaries haven’t gone up at the same rate the market has, there are lower numbers at open for inspections and now that it’s only weeks until Christmas and lockdown restrictions have been lifted, people are deciding to do something better on a Saturday and wait until 2022.
On the flip side, I am now seeing FOMO from sellers too! Potential sellers are only now asking for an appraisal thinking that they have waited to take full advantage of the peak only to find out that the market is settling down and weakening. It’s not until they list with another agent who has appraised their property around $100,000 more than my appraisal, that they realise that they may have missed the market as their property sits idle locked into the full duration of an agency agreement, sometimes up to 6 months.
While some buyers are throwing in the towel and waiting until there are more listings to choose from in Summer, others are throwing in a massive offer to try to secure something now, especially if it is an ‘A Grade’ home, either way it is worth noting that prices are still rising.
So, weather you are a seller or a buyer, it is a strong recommendation to act now. You may not be in a better financial position by waiting until Summer.