With the summer behind us Nick Churton of Mayfair International Realty takes a look at how the property market is shaping up this autumn.
Some consider that the real estate market in many western countries is still over-valued. And that somehow it is suspended above reality by the slender threads of quantitative easing, low interest rates and a little market traction generated from a limited number of prime hot-spots such as London and New York. Another hard landing would certainly be uncomfortable. But is it likely? Although there are doomsayers who predict more falling property prices this is an overall view and each country and region will behave differently: there may well be enough activity to ward off further slippage. In London there certainly seems enough life in the market generated by those making non-discretionary sales and purchases. If this continues until the banks and other lenders finally sort themselves out and a better level of confidence returns then another bump should be avoided.
But where is the activity we do have really coming from? Buying and selling real estate in this market is certainly not the exclusive province of the wealthy. It is the exclusive province of the determined. Those in any part of the market who don’t really need to move home are not doing so. But there seem to be plenty of people whose lives and circumstances determine that they do enter the real estate market. It is this group that is keeping the market as buoyant as it is, and these who, in time, will no doubt be very pleased they acted when they did, as this is a market of opportunity. To all those politicos, in the UK at least, who insist we have a housing crisis. Hardly. What we have is a mortgage crisis, stupid.
For those that are coming into the market there are some pitfalls to beware of. In these austere times it is quite natural to watch the pennies. No more so than with big-ticket items. And there is no bigger ticket than real estate. But sellers with too ambitious an asking price and unreasonable expectations in the prevailing conditions will really find things difficult: as they also will if they use the wrong agent. Some sellers seem all too happy to put their most valuable asset in the hands of a less experienced and/or cut-price broker or agent. Why would they do that?
Of course we all like to get a bit of a bargain – especially at the moment. But there are limits. A cut-price surgeon doesn’t seem a very good idea for one’s health medically, and likewise a cut-price real estate agent isn’t very good one’s health financially. Real estate brokerage is one of those areas where for relatively little extra cost there is a great deal more reassurance and the strong likelihood of a much larger return.
Buyers should remember that while the market favours them it does not favour them completely. Realistic offers will be treated, at worse, with polite encouragement. Unreasonable offers will not.
So there you have it. Cut corners and your move will be a headache. Don’t cut corners and your move may still be a headache but you could end up with more money in the bank or a better roof over your head.