Where is the power in YOUR market?

Just about everyone knows that the real estate market is cyclical – or that there is sometimes more demand for homes than the supply of properties for sale, and sometimes an oversupply because demand is low.

During the latter part of this cycle you will often hear people say that there is a “buyers’ market” in real estate - because it is obviously easier for buyers to negotiate a favourable deal when there are many homes on the market and only a few people willing or able to buy.

On the other hand, says Berry Everitt, MD of the Chas Everitt International property group, the first phase of the cycle is usually termed a “sellers’ market” – because an excess of demand over supply means the power is in the hands of sellers and makes it easier for them to negotiate higher prices for their properties.  

“And that is where the SA property market as a whole is said to be right now, with a large number of prospective buyers and insufficient supply to meet the demand.

“However, it is extremely important to understand that real estate markets are never homogeneous – and that conditions in local sub-markets or ‘pockets’ can be totally different to those in a neighbouring town or even the next suburb.”

So, he says, while it may be said that homes are on average selling faster and for higher prices than they did a few years ago, that might not be the case in a specific location where there is perhaps still an oversupply of homes resulting from the Great Recession. For example, in some small coastal towns in SA, buyers are still able to negotiate hard for the homes they want and may even find a “bargain”.

“By contrast, there are some high-demand pockets of the market now where it is extremely difficult for buyers to find homes for sale and there is such fierce competition for anything that does come on to the market that sellers often receive several offers and may even end up getting more than their original asking price.”

Writing in the latest issue of the Property Signposts newsletter, Everitt says it must be emphasised, though, that this is not necessarily the norm. “The effects of new developments, interest rates, consumer confidence, rising utility costs and unemployment are different in every area, which means that the balance of real estate power is different in every area – and is constantly shifting.

“For this reason, it is pointless to try to “time” your home sale or purchase in terms of the prevailing view of the market as a whole. You should rather try to establish who currently holds the power in the particular area in which you are interested, so you can make the smartest offer or set the correct asking price for your property – at the time that best suits your personal circumstances.”

And the very best way to do that, he says, is to seek the advice of a properly qualified and experienced estate agent who knows that particular real estate “pocket” in detail and is in touch with what is happening there on a daily basis

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 25 Apr 2018
      Whether you are a seasoned seller or new to the game, putting your home on the market is an exciting moment. To ensure you get the best possible outcome these 8 value adding additions to your home is worth the effort.
    • 25 Apr 2018
      After four years of unprecedented growth fuelled by semigration, the Southern suburbs market faced a number of challenges in 2017, including dwindling affordability and a marked slowing in house price growth with many sellers forced to lower their prices in order to secure a sale.
    • 25 Apr 2018
      Mall of Africa, is celebrating its second year of sensational success. This splendid super-regional shopping centre first opened on 28 April 2016, and has grown in popularity, performance and profile since then.
    • 25 Apr 2018
      While the role of trustee in a sectional title scheme is a voluntary and unpaid position, it is one that comes with huge responsibility. Trustees have a fiduciary duty towards their scheme, says Chinelle Hewit, Operations Manager at sectional title finance company Propell.
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us