Birds Of A Feather.
With six sales in the past few days our team is feeling pretty chipper…almost feels like the market might be picking up…not so fast.
In recent weeks Real Estate Agents (and Mortgage Brokers) have been very quick to run to their rooftops and shout that the market has bottomed out and interest rates won’t go up from here…I’m not so sure about that…yet.
It’s true there are some green shoots emerging…I’m so sorry I promised I would never use that…my bad.
One of the problems with attempting to obtain reliable market reports/updates from real estate agents is that they don’t exist (on reflection that’s quite a significant problem). Some of these reports are blatantly misleading and some are just misguided, let me explain.
Firstly, the worst agents send emails and letterbox drop claiming sales that they had nothing to do with. I’ll never forget receiving a letter reporting a record sale from another agent that we made! The agents response to my truth seeking text was a very noble ‘we see it as our duty to inform residents of market activity,’ (take note other industries - this is the sort of community spirit you need to embrace)…dear oh dear.
Secondly, agents need listings and for some time now it’s been slim pickings…for many it's getting desperate. A recent letter that went viral on LinkedIn was from an agent who wrote an open letter to local residents about the impending mortgage cliff and therefore everyone must sell now…Lord give me strength.
Ok so where are we? It's not easy to get a handle on this market. In the share market you can look at buyer orders and easily see that an equity is well supported…in real estate you need to be a little more creative.
The easiest lead indicator is the ongoing period of low supply we have experienced. The property market is under supplied and this has meant that there is some pent up demand. Another thing we are seeing is buyers agents signing up frustrated punters left right and centre claiming there are off market opportunities everywhere…folks…no there isn’t. It’s the age old thing selling agents have mystery buyers, buyers agents have mystery listings…spoiler alert…no mysteries…just stop it.
So how do we figure it all out? We regularly chat to auctioneers, mortgage brokers and financial planners to get a feel for what that are seeing. Granted this method of analysis is far more of an art than a science but it does unearth clues that when compiled may reveal trends.
The word on the real estate street is that buyers are calming down and more are getting ready to commit. Last month's pause from the RBA has certainly contributed to this but folks get ready for a big cliche ‘one swallow does not a summer make.’
I guess that means we all need to wait to see if a few more swallows show up…lucky for you I’m an avid bird watcher.
Until next week,
David