How to buy when listings are low - May 2020
May 21, 2020 / Written by Rich Harvey
Two very distinct things are happening in real estate right now that make the buying process pretty tricky and potentially much more expensive than anticipated.
Data shows that buyer activity remains surprisingly strong, which is keeping prices stable in the midst of the coronavirus crisis. Median prices haven’t fallen as far or as fast as many expected thanks to the number of people out and about snapping up their dream home or next investment.
At the same time, the number of available listings has slid sharply, down more than half in the space of a month. So, all of those people looking to buy their next home aren’t met with much choice.
Seriously, go to your favourite real estate listings site, put in a suburb you like and your budget, and see what comes up. There’s not much there at all.
So, how do you buy at the moment when your options are so limited?
Not much around
Buyers seem to be holding the nerve relatively well in these uncertain times, with good quality properties selling quickly and achieving solid results for vendors.
But the volume of stock on the market has plummeted, suggesting that sellers aren’t quite as confident at the moment. Almost 60 per cent fewer homeowners listed their properties in the month of April compared to March.
At the moment, Sydney has fewer homes for sale than Brisbane does, and it’s a considerably larger city. In April, 9000 properties across Sydney were listed – down from 15,000 the month before.
Of the homes for sale right now, two-thirds were listed more than a month go, which gives you some indication of the slowdown.
There might not be much around for buyers to choose from, but what’s there seems to be selling well.
Last weekend, the auction clearance rate in Sydney was a whopping 75 per cent. On the ground, some agents reported homes that achieved results well above the reserve as well as good numbers in terms of registered bidders.
And the strong results aren’t due to heavy discounting either. In Sydney in April, the average list price was one per cent higher than in March.
It suggests that strong activity among buyers, coupled with lower numbers of available stock, is not just cushioning prices against declines, but even leading to some modest gains.
Off-Market is the Key
There’s not much to look at. Instead of pages and pages of search results to peruse and dozens of potential properties to then go to inspect, there are a handful of prospects and potentially not many good options.
So you need to find out about those properties that aren’t being marketed to all and sundry – and this off market space where buyers’ agents shine.
An independent, experienced and well-connected buyers' agent is your secret weapon,
They can draw on their extensive networks and connections to locate off-market options that you’d otherwise never know about. They’re homes that don’t hit the listings portals.
Many sellers are choosing off-market sales at the moment. They want to remain low key about offloading their property for a number of reasons – it might be a distressed sale, they might need quick cash, it could be a divorce settlement, or they might just be intensely private. They opt for an off-market arrangement rather than make a big song and dance publicly.
Accessing those opportunities, away from the intense competition and manic market conditions, is a perfect opportunity for buyers. And it’s a buyers' agent who can connect you with these prospects, unlocking untold potential.
They understand what makes an area tick. Its history, current market and its future potential. They are aware of what forces are at play on values too, from gentrification to demographic shifts.
They also know what to avoid, the tricks employed to hide undesirable features and the red flags that can be tough to spot sometimes.
On top of all of this, buyers' agents can advise their clients on alternative purchasing options, to help them think outside the square. Maybe there’s another location that hasn’t been considered, which still ticks all of the boxes and hits the desired budget. They’re skilled at working towards a brief and finding the absolute best opportunities to meet it.
Don’t feel trapped because the listing numbers are thin. There’s a whole swathe of property options out there.
You just need an experienced, well connected professional to help you unearth them.
To have a friendly Buyers' Agents to contact you:
call us on 1300 655 615 today.