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 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
        
    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