"What's the real estate market like right now?" people might ask.
"Good, good. We see some really strong signs of recovery and there have been really good prices realised in some of our recent sales. Strong buyer interest...," might come the reply.
Of course, that was how the salesperson wanted it to be so that was the picture they painted. Either way, there wasn't much data floating around to argue the point in either direction.
Times have changed.
Anyone with google can access a mountain of data on property prices, market trends, recent sales, suburb profiles, the current volume of listings...it's all there at the tap of a keyboard.
People turn up at my home opens these days armed with information. On paper, on their laptop, on their iPads, on their smartphones. Given this, describing the market in any other way than 'what is' is fraught with danger. Most buyers have done their research, are highly educated and informed, and know what's out there.
All of which gets me to the title of this blog.
The market is generally flat right now in terms of property prices. A couple of clicks on reiwa.com.au and you'll see the market has softened. Last quarter there was a 2.7% decline in the median sales price in the Perth metro area with a 2.9% decline over the last twelve months.
If you're thinking of selling, you'd be better off having another thought, right? Well, perhaps. And perhaps not.
I'd suggest that there are compelling reasons why you shouldn't sell right now and, for some sellers, those are the very same reasons that you should.
Let's get the easy scenarios out the way.
If you're an investor and you're receiving a healthy rental income for your property, you probably shouldn't sell right now.
If you have no reason for selling, and you simply want to realise some capital growth and put your gain in a bank account, this probably isn't the time to sell your home.
In fact, if you've bought property in the last three to five years for purely speculative reasons, you don't want to sell right now (unless your financial or personal situation is dictating that you must). You're not going to realise any asset increase.
The supply of homes in the current market is very strong. There's a pipeline of new developments coming on stream. There's plenty of competition among sellers for buyers. While we haven't quite swung to a buyer's market, we're heading that way. You have slimmer chances of achieving outstanding results.
It all sounds quite cut and dried, doesn't it? Don't sell.
Not so fast! Because when it comes to the typical homeowner, the property market indicators can start to fail you a little.
For starters, a general perception is created by an aggregated number.
Cardup jumped 25.7% over the last 12 months while Hovea slumped 53.3%; the total of all of these movements gets you a 2.9% decline across the market. Already, you start to appreciate the need to dig a little deeper with your research.
Different suburbs and distinct pockets of land within those suburbs are performing differently.
A softening of the market does not affect each suburb uniformly, nor does it affect each type of home. Higher priced homes with four or five bedrooms have experienced larger price reductions than smaller homes.
As I said earlier: some of the reasons that you shouldn't sell your home right now may the very same reasons that you should!
We're in a market where buyers expect value. If you're selling and then buying, that's you. You can demand value because you have options. The emotional element of buying real estate is muted right now because there's not as much heat in the market. You can be more considered and objective in your property search.
Consider this, though: If you're looking to 'up-change' - to move into a larger home than you're in at the moment - this may be the very best time to sell and buy.
The top end of the market - the bigger block in the better location - has been hit harder by the easing of the market than the market in which you currently live. This means that the financial gap between your current home and your next home may be as narrow as it has ever been from a price and percentage point of view.
If you're looking to buy and sell in the same market, this may be true for you. The relativity of the market is your friend.
The home you had your eye on a year or two back may have plunged $200,000 while yours has barely moved. The net result is a great reason to be selling. Even if you're home has dropped $50,000 you're still in a strong place.
Another thing while we're on the current market. Beware of any agent speculating with any confidence about what the market will do in the next few years - good, bad or indifferent. We don't know and delaying or accelerating your decision to sell based on that speculation rather than responding to the current market is fraught with danger.
No one can predict what will happen next. Right now, we have the rarest of storms: a lower sales market with a flatter rental market. Be careful of advice that tells you with any certainty what will happen as a result of these market conditions.
There was a time when being the market leader was all about knowing the most about recent sales and market knowledge than anybody else. That's just information and data, though. These days, it boils down to two factors: trust and reputation. Market knowledge is a given, but it's not the distinguishing criteria for agent selection.
Now may be the very best time to sell because it is the very best time to buy the home you have in mind. Or it may be a time to sit tight. An agent with a reputation founded on trust and results is going to be the one that can help you make that decision for your financial benefit and the benefit of your family.
Find the market leader in your area and perhaps the area you're looking to purchase and have a chat with them - it may help you decide which camp you're in right now.
- Michael Forzatti, October 2015