The property market has cooled. It hasn’t dropped, just cooled to more usual levels of interest and transaction. That means that pricing is critical. Alongside that, marketing is more crucial than ever – see below for more detail and statistics as to why.
There are 3 key factors as to why the market has cooled:
- After 2 ½ years of frenetic activity, the number of people who want to move for a lifestyle change is returning to ‘normal’ levels. This was always going to happen.
- Mortgage rates have risen – this is a factor but not the biggest – lending rates are still relatively low.
- Cost of living – this is a crucial factor. We all know what our mortgages cost us each month, or will potentially cost us if we upsize. But do we know what we’ll be paying for electricity, gas & food in December? £400, £800, £1600? This is the key factor giving buyers pause for thought.
With a new Prime Minister in place, we’re all waiting to see what will happen to the cost of living. Once we have some certainty – likely sometime between now and next spring – those who want to move will have more confidence to do so. In the meantime, there are the usual people still keen to sell or move due to marriage, births, relocation, divorce, probate.
I expect we’ll see more downsizers coming to the market as the increased energy costs hit home – those who have held off from selling their cherished family homes will be more inclined to move in order to avoid unnecessary extra costs, while marriage and births will drive the need for upsizing.
More than ever I’m dealing with competition from agents who are over-valuing homes in order to win a listing – I know of at least 2 agents (one national, one local) who are telling their agents to list any property at any cost and deal with a price reduction later. I still won’t over-value as it’s dishonest and could actually cost clients money.
Early summer I was instructed on a property that I insisted should be listed at £1,000,000. Two other agents proposed £1,100,000 and £1,200,000 respectively. If that property had launched at either of those prices it would likely still be on the market and would now likely sell at £950,000 or maybe less. I sold it at the full price of £1,000,000. So by valuing the property realistically I didn’t lose my client £200,000, I made my client £50,000.
Without doubt, some properties I’ve lost out on lately will sell for less than I could have achieved if they’d been launched with realistic pricing in the first place. So be it, I still won’t stoop to the level of giving clients false hope with the hope of making myself a buck. That’s not how business should be done, and it’s everything that’s wrong with estate agency in this country. While I and every other agent is in business to make money to support our own lives, we shouldn’t do so at the cost our clients’ financial health, not to mention undue stress. What if we all were pragmatic and put our clients first?
Let me be clear, I will negotiate hard and defend the price of every property I’m selling – I always do and can because my properties are realistically priced!
So, to the issue of the impact of marketing. When the going gets tough the tough get going. Sellers need their home to be presented in its best light so it stands out and will achieve the best possible price. Properties marketed by us (we spend between £1200 and £5000 marketing each property vs £150 or so other agents spend) achieve, on average 58% more online views than those marketed by other agents. More interest = more viewers = more offers = best price. Our success comes from investing in you and your home.
Founder & Director
Kai Carter Estates