Facing The Music.

Shout out to the super fans who noticed we didn’t send a newsletter last week, I appreciate you. Before making any further comments on the market I just wanted to be really sure.

In our last missive I said conditions had changed a little and everyone just had to face up to it. My positive summation being that it will stagnate/level off (like it always does) and the good old days will come back post election.

I then received an email from one of our said super fans who scathingly called me out. He stated how he loved our newsletter for its honesty and then expressed disappointment in how ‘salesy’ and ‘gutless’ my comments on the market were…ouch…but fair.

Gutless is a strong word (and after two weeks imbibing pina coladas in Fiji it’s highly inaccurate) but I did play it safe. I sell houses for a living and I held back fearing potential clients may not call if I dared to state what everyone knows to be true.

So how is it? Here goes. This feels like that scene in Jerry Maguire where Tom Cruise’s character delivers his ‘who’s coming with me’ speech to rapturous applause…but then everyone sits down.

In the past eight weeks buyer enquiry has halved on most properties. Before you say it, yes 'A grade' properties are still attracting better enquiry but they too have come down in value. An example of this is a beautiful semi in the ‘A grade’ suburb of Manly sold this week for $3.6M, it last sold in November 2021 for $4.215M….a 15% haircut (plus stamp duty).

It’s undeniable that prices have fallen from their highs and it may not be over. Assuming that interest rates will continue to rise then lending capacity and risk appetites will be curbed.

So….time to panic? No but it is time to be careful.

A changing market means increased risks but also increased opportunities. The rules are simple, if you buy before you sell you have to be mindful that if you got some value on your purchase you may need to share some of that with your sale. Be conservative on what you think you will get and you will be fine.

If you are upgrading this is the break in the clouds you have been waiting for, a 10% drop on a smaller property is less than a 10% on a bigger one…it’s only the changeover cost that matters.

In my opinion, the time to sell before you buy has returned for most of us. Yes it’s true that you may have nowhere to live but you will have certainty and that is real power in an uncertain market.

We recently sold a large house in Mosman that had four interested parties, one had sold and was ready to go. Another made a higher offer with a longer settlement - the owners took the lower offer because it was rock solid (the other two parties were too nervous to act).

A final word…remember how last year all of the experts were saying that prices will never come down, these same people are now all saying that they will never go back up. Ignore the noise.

If this truth bomb has been all too much for you then do what I do for a pick me up….watch (he who must not be named) weekly market wrap. Banked up buyers, red hot demand, prices rising….(is someone up there accidentally putting last years tapes in the machine?).

Until next week,

David Murphy