For many years, it is fair to say that Real Estate agents have been operating in a “sellers market”.
Post “Covid-19”, what will the Real Estate market look like?
There have been many thoughts on this. One thing is for sure though- it will be a different world once we have the virus under control.
A seller’s market or a buyer’s market?
In a “seller’s market” our sellers have been rewarded with many buyers. These buyers compete against each other in a tight market with an “undersupply” of property. This has pushed prices up.
Salespeople who have worked in many markets, know by experience that the changing markets create different opportunities- one could say for a salesperson, it could be a “feast or a famine”.
The market that I began my career in was a “buyers market”.
I enjoyed getting a buyer in my car, after qualifying them, and showing them at least 6 properties on one appointment. I would do this several times a day with several buyers.
Working buyers meant that you would have to know the company housing stock very well, and be able to quote and show the features and benefits of each house.
We would have hundreds of listings on our Company’s books and show buyers a good selection in the same price range of the advertisement that they had responded to.
It was hard work, but very rewarding.
The experience meant that your buyers eventually became your sellers, that is, if you had done your job right, and you had used the time to build a relationship with them, while finding them a home.
Some salespeople prefer doing open homes to single appointments, which are time consuming in a busy market.
Personally, I have always liked the “one on one” appointment approach, as after all, it is a big buying decision for anybody and it should be treated with respect.
Buyer’s markets are more time consuming for a salesperson.
Buyer’s are able to be fussy, so by being able to establish a rapport and understand their buying decision, a salesperson is able to provide better service to both buyer and inevitably to the seller as well, in not wasting anybody’s time.
If you are able to qualify your buyer and understand their likes and dislikes, you will be able to provide a better service to them and give better feedback to the seller.
This is very important so that the seller can “meet the market that they are selling in” which often reduces their time on the market, and the risk of selling for less after many months of disappointment.
Buyers who spend a huge amount of money are being asked to spend very little time inspecting a property at an open home with dozens of others, giving them very little time to make an informed decision.
The seller’s market
Sadly, buyers do miss out in a seller’s market as the supply and demand factor becomes very relevant. Properties will turn over quickly to those who are fortunate enough to be cashed up.
Those who need to sell before buying often miss out unless they take bridging finance which can be expensive.
Now in a buyer’s market, things become very different. Buyers will be the ones who will be nurtured by salespeople.
For now though, it could be a matter of months before the real effect on the market will be felt after Covid-19 in many countries.
We know that prices have increased dramatically in some countries since 2020, which economists could not predict. Could prices fall as fast?
A recent report estimates approximately 60 per cent of home loans will need to be refinanced in the next year and for many borrowers, that will mean their interest rates doubling, according to Core logic
Governments will need to come to terms with the fact that many businesses will fail having been in lock down for extended times.
Or it could cause the FOMO affect again– “Fear of missing out” and buyers could be bidding against each other with limited supply, driving the prices up further.
Many people with home loans will have secured a repayment holiday, and that effect will not show through for a few months. It will be a “wait and see” for most I suspect.
But perhaps moving forward “viewing by appointment” and not mass inspections through open homes might become the new norm. It would not be a bad thing would it?
Buyers would be treated with respect and sellers would benefit from the feedback of the true value of their property in the market that they are buying and selling in.
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