2014 A mixed year for values
In regards to value/price increases that occurred during 2014, Farnborough experienced a 12%-15% increase from the 1st January 2014 to the end of the year. Ironically the majority, if not all of the increase in values was concentrated into the first 6/7 months of the year and then Summer, with the benefit of hindsight, was the watershed for value increases ceasing.
The demand remained strong, the supply was still reasonably low, but it was as if buyers and therefore the market had gorged on property while pressure was on buyers as the prices were rising, and naturally couldn’t and wouldn’t take any more so wanted to pace themselves and buy ‘sensibly’.
Those selling property however, were still looking for compounded values on their house and some agents were feeding the frenzy with inflated appraisal figures following the same trajectory of the first 7 months; but the sight of “price reductions” and the odd joint instruction becoming more prevalent as we moved onto the latter part of the year, demonstrated quite clearly that the “haymaking” time, as far as rapidly rising prices was concerned, was over.
Property Market Health
Like any reaction to the market and its conditions, it is only by looking back at the factual evidence we can draw conclusions. For example, there was tremendous denial in the market place in late 2007 and early 2008 that there could be a rapid decrease in property values. No-one selling wanted to face that fact, no agent would want to feed the negative vibe, but hindsight clearly shows what happened and it is only when prices hit rock bottom (approximately a -15% loss in value) did the reality show.
Since then property prices have recovered, and then seen growth over the last 4 years. The key for buyers and sellers is to have their ear to the ground and be willing to accept market place realities.
In contrast, no-one could have foreseen the rapid rise in values by February/March 2014, which in reality was/is best described as alarming. Great for sellers of end of chain houses, who were cashing in, but with the majority of people needing to onward purchase simultaneously and property supply not meeting demand, some clients were unable to find a suitable property in their price range resulting in them staying put.
This scenario is not want an active market needs. A market should not be judged on prices rising therefore a good market or falling therefore a bad market, it must be judged on the balance of stock against active applicants viewing: the closer the scales are to being balanced evenly, the more ideal the overall market is for all parties i.e. keeping the cycle turning steadily.
Hopes of stability in 2015
2015 shows promising signs already with a good number of appointments, valuations and subsequent instructions coming to the market. The numbers of applicants coming to the mail lists are equally encouraging, so at the moment it bodes well. The Farnborough location will always prove to be a magnet for buyers owing to the exceptional educational facilities, the communications with the roads and railways and the airport.
Are prices likely to rice as sharply as last year? probably not. By December 2015, I think we can look back at increases in value at more along the lines of 5-7%, i.e. a more and manageable sedate growth, that all parties can keep pace with without feeing the need to rapidly jump into agreeing something without giving it its due consideration.
Estate Agents have an important responsibility to educate and demonstrate evidence to clients and potential clients, to provide accurate valuation advice and detailed insight on the local property market, a duty not to misdirect the public and to reign in broad sweeping media statements which may not have much local relevance.
On appointments we communicate key facts pertaining to property value by showing details of similar house sales, or showing those houses of a similar ilk that are not selling, the latter can be equally as efficient in telling a “value” story as a sold unit. The value of quality advice at the very start, not just paying lip service, has huge advantages for the seller.
Estate Agents are in the best position to be sensor gauges to any market changes and reactions. Through the experience that we have at Mackenzie Smith, you may rest assured that this can be translated across to selling clients in giving sound professional advice. Please contact us with your questions or arrange an appointment for a market appraisal and up to date valuation.
Steve Panther, Assistant Branch Manager Farnborough
T: (01252) 375999 | E: email@example.com