We don’t normally do property market reports this frequently, but felt it was appropriate as the local property market has changed again and continued to gather pace at an alarming rate since our last property market report in the Spring.
Having done this job for more years than I care to remember I have been through flat depressed buyers markets, where you have an abundance of stock yet hardly any viewers and the mad sellers market of around 15 years ago, when stock was nonexistent and purchasers were impulse buying homes sometimes without even looking inside.
The market at present is a tale of two halves. For the first time in numerous years our market up to around £500,000 is now definitely a sellers market with scarce new listings attracting immediate interest from no chain buyers. The market above £750,000 however is still stacked in the buyers favour, as this section of the market is not quite as buoyant and it is not currently experiencing the stock shortages of the lower price ranges.
Today’s purchasers certainly have to be quick out of the blocks if they are in this lower price range. Most of our new listings in this price range attract numerous viewings, sometimes within minutes of being launched on our website. The new listing in Nursery Avenue mentioned below attracted 18 viewing requests within 2 days of launch. 6 viewings were subsequently arranged and the property sold on the viewing day for over the asking price. The very unfortunate thing about this increased activity and competition is that, whilst you have a delighted vendor and purchaser, with every transaction like this you are inevitably left with numerous disappointed buyers.
The pace in the market is not exclusively on new listings either, as older stock is now also starting to attract healthy interest which is another sign of an improving market and subsequent lack of choice. Pricing remains crucial on the older stock though and the market is changing frequently so vendors of these homes should discuss with their agents whether or not they remain competitive in this market. We have a fair bit of older stock like all agents do, but on numerous occasions a price reduction and a re-launch of these properties rekindles healthy interest and in many cases acceptable offers.
My advice to keen purchasers in this difficult section of this sellers market is to get registered on all agents mailing lists to receive instant property alerts for new listings. Get funds arranged, at least in principle so you are ready to offer when you find something suitable. React quickly to new listings and be prepared to view at very short notice as we are unfortunately having to cancel numerous viewing appointments because properties are being purchased by one of the very first batch of viewers. If your purchase is urgent and you are chain free and ready to buy give us a call with your details so we can include you on our below “hot list” of buyers. In addition, don’t miss a property that is ideal for you by procrastinating or by trying to negotiate hard on the asking price, as these homes are not only scarce but going up in value.
As previously reported, today’s sellers market is being fuelled by an acute lack of stock in the lower price ranges. When choice is very limited it creates a supply and demand situation, competition between buyers increases and properties that are new to market rapidly achieve asking prices and recently, quite frequently, even above asking prices.
Estate Agents and surveyors tend to value properties by using other similar size comparable homes that have previously sold in the area. In an improving market such as ours our qualified agents are now quite rightly increasing their valuations in line with today’s market. Valuing is obviously not an exact science as, unless you have sold exactly the same home next door last week it can be hard to get the value 100% accurate, as a property is worth what someone is prepared to pay for it at the end of the day. However, if properties are going rapidly for over asking price then, quite simply asking prices are too low and need to increase. These increases will inevitably continue to fuel local property prices as these new sales are in turn used by agents and surveyors as future comparables.
Obviously viewing activity is also strong with Saturdays continuing to be the busiest viewing day. We have four agents in every Saturday with typically over 30 viewings arranged between them. Manxmove now have 4 qualified agents covering the whole Island and, over and above the normal marketing that you would expect, our agents have a set procedure for dealing with new listings, which may perhaps explain why our properties receive so much interest so quickly. The first thing we do is match the property details with our “hot list” of urgent no chain buyers and this can sometimes be done at the valuation stage and before the property is even launched. We then launch the details on our website and merge these details with our clients that are registered for instant email property alerts. We then launch it on www.zoopla.com and www.onthemarket.com and also launch it on our Facebook page and arrange specifically targeted Facebook advertising if required. We also go through all the files of similarly priced previously listed or sold properties and contact these viewers to see if they may be interested in viewing our new listing.
It’s always difficult to advise purchasers what level of price reductions are being made and where to pitch their offers as it really depends on how long a property has been on the market and how much interest it has attracted. Despite some advice to the contrary there is no set percentage on how much of a reduction should be applied when making offers. However, in order to confirm the recent history on asking prices compared to prices achieved and to substantiate the above market comments I have been through some genuine recent Manxmove transactions to see how long these properties were on the market and how much they achieved compared to asking prices and this actually makes really interesting reading…
The Fairway Onchan 2 days on market and sold for asking price
Farmhill Park 8 months on market and sold for 5% less than asking price
Glen Road Laxey 2 days on market and sold for asking price
Church Street Peel 10 days on market and sold for asking price
Beech Close Onchan Sold for asking price prior to coming on market
Nursery Ave Onchan 10 days on market and sold for 5% less than asking price
The Hollows Douglas 5 days on market and sold for 3% less than asking price
Bemahague Ave Onchan 3 days on market and sold for asking price
Campion Crescent Peel 26 days on market and sold for 2% less than asking price
Kitterland Port Erin 24 days on market and sold for 0.1% less than asking price
Main Road Sulby 8 months on the market and sold for 5% less than asking price
Glen Mooar Kirk Michael 19 days on market and sold for 3% less than asking price
Woodlands View Douglas 7 days on market and sold for asking price
Elm Bank Glen Vine 6 weeks on market and sold for asking price
Leodest Road Andreas 6 days on market and sold for 5.4% above asking price
Nursery Avenue Onchan 4 days on market and sold for 2% above asking price
Farmhill Meadows Douglas 7 days on market and sold for asking price
Slieau Whallian Peel 1 day on market and sold for asking price
Main Road Foxdale 1 day on market and sold for asking price
Glen Road Laxey 5 days on market and sold for 5% above asking price
Fenella Court Douglas 6 days on market and sold for 2% less than asking price
Lancaster Road Douglas 27 days on market and sold for 8% less than asking price
Interestingly, out of these 22 sales 10 sales were at asking price, 9 sales were below asking price and 3 sales were above asking price. The sales range in value from £140,000 to £510,000, making the average property price for the above 22 sales £291,000, which hasn’t really changed much over the last few years. Surprisingly, the average percentage price drop from asking price to price achieved on these sales is less than 3%, although this figure is distorted a little due to the transactions that achieved above asking price.The average length of time on the market for these 22 properties is just 31days.
I can confirm that all the above examples are genuine sales negotiated by Manxmove over the last few weeks and many of these properties can be seen still featured on our website as under offer and sale agreed.
Manxmove tend to do things differently and we are constantly thinking of innovative new ideas to make sure our vendor clients properties receive maximum impact and massive exposure to the local, UK and international market. Over and above the normal marketing that you would expect all agents to do, we have facilitated sellers and buyers with open house viewings, part exchanges and swaps, targeted Facebook advertising, website pop ups and also our unique Virtual Viewings which continue to go down really well with both sellers and buyers.
The above changes in the market have resulted in yet another unique new idea from the Manxmove team as we have just changed our automated email mailing list to look after sellers as well as buyers. Now sellers can visit our website, click on property alerts and register the details of the property they wish to sell. Our website will then instantly search our extensive database of registered buyers and automatically match the sellers specific property details with these registered buyers. The match process includes property type, area, number of bedrooms and price. Not only will the seller receive an instant email with a detailed list of who we currently have registered looking for this type of property, but the seller will also receive future email notifications when new buyers that are looking for this type of property register with us. With this new facility a seller thinking of going to market can anonymously get a really good idea whether or not there is an interested audience for their home prior to actually launching their property on the open market.
Assuming stock can be obtained it’s an optimistic future in my view for the local property market, with clients that are moving up the ladder from around £500,000 to over £750,000 potentially benefitting the most as they are selling in a much more buoyant market than the one that they are buying in. However, sellers above £1million have to continue to be patient I’m afraid as, although we have seen an improvement in the number of off Island viewers recently, the audience at this level is still comparatively small. Numerous first time buyers are also out there and keen to get a foot on the property ladder, although this is proving difficult due to the above competition and stock shortages. I’m afraid the way the market is now anyone looking for a bargain up to around £500,000 will probably be disappointed. In addition, buyers of newly listed correctly priced houses and bungalows around the £200,000 to £400,000 mark will have to prepare themselves to potentially pay asking prices, as it would seem that there is no shortage of other buyers out there that are willing to do so.
Graham Wilson FNAEA (Dip REA)
Manxmove Estate Agents