In Real Estate, you’ll often hear the state of play described as a seller’s or buyer’s market, meaning that one or the other has an advantage.
In a buyer’s market, an oversupply of properties for sale will drive sellers to compete against each other by dropping prices to attract a purchaser and make a sale. The reverse is true for a seller’s market. A shortage of housing stock will push prices upwards as buyers compete against each other to find the right home.
While it might be easy for a professional local agent who works in a particular market everyday to read the subtle swings between buyer’s and seller’s markets, how do you as an investor, home buyer or seller make sense it of it all?
Take a look in the window of your local agent to see how many new properties are added each week. A regular supply of new houses and turnover to buyers helps to regulate prices. But once that supply dries up, prices start to rise and houses sell much faster. In Merimbula at the moment, an over supply of buyers and a shortage of properties for sale, is starting the swing towards a seller’s market.
Days on Market (DOM)
Days on Market (the time between listing and selling a property) is a solid indicator of where the market is sitting. The longer a house spends on the market, the greater the chance it will sell below the asking price – a sure indicator that it’s a buyer’s market. As the DOM shorten, sellers get the upper hand and prices rise. In Merimbula and Tura Beach, the DOM for an average house are reducing.
The discount rate is the percentage difference between the listed price when a property first comes on the market and the eventual sale price. With these figures, it’s easy to see that the longer a property spends on the market, the lower the sales price. In Merimbula, the average discount rate for a house is 5.45% and in Tura Beach -4.63%. This is a sure sign that buyers are offering close to full price because they don’t want to miss out.
Stock levels, DOM and Discount rates across southeast NSW show the tide is turning towards sellers. Prices are moving upwards. So if you were waiting for seller’s market to put your home on the market, it’s time to call your local Fisk & Nagle sales professional.