select
|

Is your area flashing “buy” or “stop” signals?

Before you commit to buying a home, you really need to know what’s been happening to property prices in your preferred area over the past few years so that you can gauge the likelihood of making a good return on your investment – or not .

“And,” says Braam de Jager, national operations manager of Aida, SA’s best-known estate agency group, a well-prepared agent will usually refer to a record of changes in the median price for the area (not the average) when giving you an answer.

“When the median – a price halfway between the highest and lowest prices recorded during a certain period – shows an increase, it means that more buyers are purchasing higher-priced homes in the area. When it falls, it indicates that a greater percentage of sales are taking place on the lower side of the scale.

“Consequently, median price shifts are a good general guide to the state of the real estate market in a specific area. But buyers must be aware that, like any statistics, they may not tell the whole story.”

He explains that the median price could be negatively affected, for example, by a batch of sales in a new development where unit prices are lower than those of surrounding single-family homes, and lead prospective buyers to think twice about an area.

“But actually, the fact that there is a new development in the area might be a sign of rising interest in the area and a likely surge in prices in the near future – quite the opposite of what the median price movement would appear to show.”

Consequently, De Jager says, it is important for potential buyers to also look out for other indicators of market strength – or weakness - the main one being the time it takes to sell homes in the area, “a statistic the agent should easily be able to draw from a Comparative Market Analysis”.

“If homes in the area took an average of four months to sell a year ago, for example, and the average listing time is now down to two months, it means that there are more buyers around or that there are fewer homes for sale, or both, and that price increases are generally on the way.

“Other very good signs of a local market on the rise are a declining difference between the average asking and selling prices in the area, and home sellers starting to receive multiple offers because demand in the area exceeds the supply of homes for sale.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK