Current market conditions
There is no getting away from it, we are having a tough time at the moment. I can hear the outpouring of sympathy for us poor estate agents from here. I have always prided myself on my honesty in my blogs and the way I conduct any business, but I have also always tried to be positive about market conditions giving you all an idea of trends that are happening locally and nationally and always, always bigging up Leigh on Sea and everything it has to offer.
Now though, there is no denying or flowering up the fact that this year (so far) has not lived up to expectations. You may remember that last year was a bumper time for all. Records fell for the amount of properties sold and prices achieved and a lot of us (me included) expected the same again for 2018. It has definitely not happened though as the number of transactions has fallen dramatically and prices have certainly stalled if not dropped a little?
Now it is important to get everything in context. It is obviously August which is traditionally holiday season and historically always a quiet month for us so it always looks a bit worse this time of year and last year may have been a bit of a one off so I don’t think there is any need to panic just yet. There is however, no denying the statistics. Nationally, the amount of houses being sold is approximately 18% down on this time last year which has led to huge companies like Countrywide, which owns estate agency brands such as Bairstow Eves and Abbotts, amongst many others issuing 4 profit warnings this year to their shareholders. Over 150 independent estate agents have been declared insolvent this year so far with some 7,000 more at risk according to national accountants Moore Stephens.
Central London is even more precarious. This is important for us as traditionally we have always welcomed purchasers, selling properties in London to our area and if there is any instability in the London market it matters to us. Apparently transactions in Central London are down a massive 25% and prices have fallen over 8%. Foxtons of London have seen profits fall from last years gains of £3.8m to losses of £2.5m so far this year and have put on hold any plans of more offices open throughout the capital.
In Leigh I don’t think there have been anything like these drops in prices or transactions but things are definitely quieter. In my opinion, transactions are down about 10% from this time last year which is worrying but gauging any difference in pricing is more difficult to quantify. You only have to look on rightmove to see the amount of properties that are having to reduce their asking prices to get any interest or sell but quite frankly were these properties overpriced and asking too much money in the first place? I think that in certain areas of Leigh prices have definitely stabilised and it may be that they have even dropped by 1% or 2% but the perception is higher because of the correction that a lot of people are having to do in their asking prices.
It is inevitable that areas such as ours are going to weather any storms in the housing market as fundamental things that are highly unlikely to change keep bringing people to our town. Things like the seafront, Broadway, schools & easy commute are always going to mean that our area remains popular and together with the fact that no significant numbers of new houses can be built in Leigh means that demand will always be high which in turn keeps prices steady.
But is there any particular reason for this slow down? Well quite frankly, no! There is nothing fundamentally different to last year. Ok, Brexit is a bit closer but a deal does not seem to be any closer than it was last year (that’s a whole other blog in itself). Interest rates have changed a couple of times but only minimally so it shouldn’t make a big difference to peoples mortgage payments.
The housing market is a sensitive thing just like any other market so it doesn’t take much for things to have an effect. It could be something a simple as the weather. We have been blessed with a glorious summer this year and it could have meant that people have preferred to visit the beach rather than buy here?
Like I said I don’t think there is any reason to panic (yet). If prices come down or adjust slightly then it could mean that things are a little more affordable and it is all relative. If you are selling your house but not getting quite as much as you hoped then you will probably be able to get a reduction or pay a bit less than you were expecting in the house you want to buy so it evens itself out eventually.
Leigh is still as popular as ever as you will see if you are in the Broadway of a weekend and as long as you are realistic with your asking price there are buyers out there. So this talk of the market dropping may be a bit premature but it is also self perpetuating so if we all keep saying it it will inevitably happen. So, chin up, shoulder back, lets go in to the last quarter of this year with a barrel load of positivity and then see where we end up at the end.This article is by Rob at Scott & Stapleton
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