When to buy, when to sell and can you time the property market?
Category Expert Insight
Can you time the property market and accurately say when the right time is to buy or sell? The simple answer to this question is no, says Graham White, managing director for Seeff North Coast.
When sellers and buyers ask whether it is a good time to buy or sell, the best advice to them is usually to sell when you are ready to sell, or buy when you are ready to buy. It is almost impossible to accurately predict the timing of the market. You need a crystal ball or an enormous amount of good fortune to buy or sell at the so-called “right time”, he adds.
Sales statistics are often misunderstood as they can only really predict the “peak” or “bottom” of the market by analysing transactions which have already taken place. The key aspect here, says Graham, is understanding the recorded sales date when the property actually transferred versus the real-time sales date on actual signature of the sale.
Looking at the 2007-peak for example, the sales data showed that the peak was in the middle to end of that year around September/October as that was the date the property transfers went through. Agents will, however, tell you that the peak of the market was in the latter part of 2006 to March 2007, as this is when buyers were actually making offers and committing to purchasing.
As a result of the delay in going through to transfer, the recorded peak appears to be some six months later. Any seller wanting to benefit from that frothy market in September 2007 would already have missed the real peak and by then, the decline was already on the way, he says.
If, however, you want to at least try and give timing the market a go, a local agent will be the only person who knows what is happening in the market today, says White. Estate agents experience first-hand the level of buyer activity and subtle changing of stock levels and have a good general “gut feeling” of what is happening in the market.
White says a few examples of a busy market will be where properties are selling quickly, often before actually being listed. Another is multiple offers or back-up offers on properties which is always a tell-tale sign of an active market. The ability to sell the same property which an agent sold six months prior for an increased price or properties which have been on the market for a long time now suddenly selling and achieving the asking price is another tell-tale sign of a good market for sellers.
Property is a long-term investment and for the majority of the time, a few months here or there is not going to make much difference when you come to sell years later. The danger of waiting, taking a risk and potentially getting it wrong is a harder pill to swallow, he concludes.
Author: Gina Meintjes
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