Lack of Supply Keeps Prices High

Do you remember the last time you had a restful, soul satisfying and happiness inducing holiday?

It cost you how much!!!!!!

You didn’t ask for your money back afterwards, did you?

Think of your new home purchase the same way but with the enjoyment not restricted to just two weeks in the middle of August and some slightly self indulgent Instagram and Facebook posts.

Think of three years or thirty and you’ll see what I mean.

Nathan Emerson, the CEO of “Propertymark”  made comments this month about his short term hopes (not a Christmas list I must add!)  heading into festivities and the New Year.

“This period should take some of the heat out of the market as we know that usual market trends see a decrease in activity as people turn their attention to Christmas”.

Not from what we can see yet Mr Emerson? Instructions are still happening and every sellable (as we know all houses are sellable if priced and marketed correctly!) property is receiving multiple offers.

“However, with so many buyers still hungry for their new home, sellers would do well not to put moving plans on hold for too long. What we need to see in the new year is a gentle levelling out, which could be driven by new year motivations delivering new sellers or changing interest rates taking some of the mounting energy from buyers”.

I very much agree with this point. Current statistics show that there are 24 buyers registered for every property listed and that 21% of all house sales achieve higher than the marketed price.

Now, this is where statistics don’t tell an entirely true story! As you know, some agents tactically “under market” for speed and interest (and, being honest, this is sometimes in the clients best interest) whilst others over value to “win the instruction” (never a sensible long term plan if your agent has a horrendous and somewhat immoral 60 day plus contract. Please be wary!).

With so many buyers registered and so few properties listed, buyers will surely pay more in order to secure a home? Maybe, on paper yes, but..….

…..If it was listed with another agent however the dice may have fallen differently.

The very same figure could have been achieved albeit with a “price reduction” or an effective “negotiation”.

With this in mind, does “high” actually mean “over market value”?

The price you pay, if the mortgage valuation and the surveys support it, is the market value. It is also the market value if you paid £15,000 higher than anyone else offered as this is effectively the “cost of ownership”, the intangible that means it’s yours and not theirs.

That £15,000 over three years is £416 per month more than Mr Jones who almost pipped you to your dream home. Stay for thirty years and that £15,000 has cost you £41.6666 per month.

£41.66p per month is a small price to overpay for a two-week holiday that lasts for thirty years.

Just perspectives that’s all…….

……..And probably a heck of a lot more self-indulgent Facebook posts.

Thank you for reading

Mark

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Mark
Associate Director
Working within the property industry for over twenty years there is a genuine pleasure in handing the keys and congratulating my clients and customers on their journey. Positivity, good health & exercise, happy families and really appreciating the world we live in certainly keep the smile on my face and energy flowing!