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MARKET SNAPSHOT

MARKET SEGMENT: 
Many years ago I started using a term which I called "Market segment" in response to the recognition that the spread of price range in prestigious suburbs like Applecross, Mount Pleasant and Attadale was huge.

You could have properties for $400,000 right up to $10M plus.

So when buyers ask me things like, “What is the average price per sqm of land in Applecross” or I see reports of official data such as “the average days on market was 63 days”, sometimes I want to either laugh or scream.

The reality for me in the areas I work it is never the norm or the same as that reported as “average”. There is no sensible way to talk norms or averages in areas that has such a massive variation of properties and values. 

I divide Applecross into 10 segments, essentially to make some sense of what was happening simultaneously in the same suburb, depending on price. I measure days on market for unsold stock, sold stock, average and median values and days. It paints a vivid picture of contrast, and is fascinating to monitor and understand. 

All buyers and sellers must understand this concept to fully appreciate what is really happening in that respective market at that time. 

I often see some price categories (Market segments) take 300 plus days to sell, and sometimes we see properties on the market 3 or more years. 

ABSORPTION RATE: 
The simple explanation of this valuable concept is this. If a particular market can absorb 12 sales a year of a particular type/style of property, and there are 20 on the market right now, it would take 20 months for the market to absorb (Sell) all 20 without any changes to the market, or no new stock coming on.

In layman terms, the terms oversupply or under supply are a more general term for this phenomenon, whereas absorption rate is more quantifiable. 

This is very important to understand how many sales in your market segment have occurred in the past 6 months, and how many competing properties are on the market right now. 

DAYS ON MARKET: - How accurate is it?
We also see a huge manipulation of data, depending on who you listen to. There are many tricks to reduce days on market which make a lot of industry data inaccurate and even irrelevant.

Did you know?

A property listed with 3 agents for 100 days each, that changes agents as soon as the listing expires, and sells with agent number four in 3 days, is recorded as selling in 3 days. I regard that information as incorrect; the real figure is 303 days. 

ALSO, properties can be pulled up and down off the internet, or signs come off or up (At agent will) yet are never really off the market. You see them go up again with the same agent a week later as “new” online. That is manipulation of data and not accurate. We regard that as not a new listing at all. 

A property totally off the market for 60 days or more (Off all websites, sign down and out of the agent window) is considered off the market. 

“Coming soon” or “Market launch date”, is sometimes another way to try to create a perception of lower days on market. We record the very first date a property is ever seen in the market (Be it sign, internet with an address or not, or any print media, as launch date). 

If you would like a detailed explanation of any of these terms and how they relate to your specific property, and even more how it would affect your strategy, please drop me a line. 

MARKET UPDATE January 2017

The sales figures for 2016 are fascinating, even DRAMATIC. Despite what anyone says or thinks about the local real estate market, I expect to see big things in 2017.

The basics are still quite good. (Affordability, interest rates, unemployement still relatively low, housing supply). 

There is a definite trend of reduced volumes of sales, quite dramatically however, so this is not a time for sellers to be too bullish. There is undeniable evidence that changed market conditions, sentiment, tighter lending and a lack of price growth now for a long time (Many suburbs sitting at 2006/2007 prices), the Buyers know that they can wait for the right property at the right price. 

THE FACTS: (To illustrate I am using Applecross and Mount Pleasant only). 

Sales in past 5 years- APPLECROSS

2012- 180  (Days on market 164)
2013- 201  (Days on market 146)
2014- 174  (Days on market 109)
2015- 149  (Days on market 105)
2016- 138  (Days on market 132)

In other words, volumes down 32% on the peak of 2013 and 8% down on last year. (Source: Complete Data). 

Sales in past 5 years- MOUNT PLEASANT

2012- 159  (Days on market 162)
2013- 161  (Days on market 121)
2014- 183  (Days on market 100)
2015- 162  (Days on market 93)
2016- 112  (Days on market 111)

In other words, volumes down 39% on the peak of 2013 and 31% down on last year alone (Source: Complete Data). 

WHAT DOES IT ALL MEAN?

I am more excited than ever!- about the opportunity that 2017 presents, as we normally see new buyers and sellers alike jump into the market either now or early in the New Year anticipating a move.

Now more than ever getting the right agent is critical. 

The best agents make things happen, have energy and proactive systems in abundance. 

I expect big things in the New Year as the market settles back into a new kind of normal.

Buyers will buy, sellers can and will sell and everyone realises that the local property market is quite resilient and an excellent long term buy as far as value and lifestyle.

Please feel free to drop me a line to help you get moved in 2017.

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