Monthly Scottish Property Market News - June 2011Written by Robert Carroll
- tell you exactly what WE are seeing happening in the property market (which might surprise you...it surprised me!);
- highlight a couple of property market Press articles that got a lot of coverage this month and indicate whether or not we believe them to be true; and
- have a wee rant about our competitors rather carelessly shooting themselves in the foot through undue negativity.
So, before I go any further, here's what's actually been happening in the little bit of the property market that my firm operates in...
What Are WE Seeing Happening in the Property Market?
A few statistics for you...
- Last week: we put 6 properties 'Under Offer'
- The week before that: we put 12 properties 'Under Offer'
- The week before that: we put 9 properties 'Under Offer'
In total, at the time of writing, we have put 28 properties 'Under Offer' this month. This in itself means very little. So let me put it in a little bit of perspective....
This is the first ever month where we have sold more properties in a month than we have put on the market. I think that bears repeating. This is the first ever month where we have sold more properties in a month than we have put on the market!
I would like to think that this is because we are uniquely brilliant at selling properties. That's only partly true (though our fantastic sales team and brilliantly-priced marketing package helps!). As I've been saying for months, there are enough people who want to buy, are not dependent on getting a first-time buyer type mortgage with a small deposit and who want to buy. There is nothing like the number of buyers that there was a few years ago. But then there is nothing like the number of sellers either: the number of properties coming to the market has dropped by about 50% in the last four years.
However, the fact is that properties ARE still selling. And they are selling across the board, not just in the upper, family home and prime property markets. These properties have ranged in value from £100,000 to £340,000, with the majority being under £200,000 and many being under £150,000.
So don't give up hope of selling and don't fret! There are buyers out there. Of course, you need to be realistic about your price, you need to present your property well and you need to be patient. But buyers ARE out there. It's not all doom and gloom. Though you wouldn't necessarily know that from reading the Press. More on that now...
This Month's Property News. What Has Been Said in the Press This Past Month? What's Our Take on All of This?
This month I thought it would be helpful to highlight a couple of stories that have appeared in the Press and which have summarised the overwhelming coverage of the property market that I have been seeing in the Press in the past month and then to give my analysis of what I feel is the reality of the position as far as it affects most of our clients.
Story One: Two out of three young people fear that they will never get on the property ladder (BBC): http://www.bbc.co.uk/news/business-13575857
My Response: I think that the affordability for First Time Buyers really is a problem in all honesty. I responded to this article by writing an article on our Blog which basically stated that I thought this was the largest problem affecting the property market at the moment. It's the one area that the government can only do a limited amount about because, ultimately, nationalised or not, the banks have to make a profit and can't be forced to lend unprofitably. For the full take on this story, have a look at the following article: http://www.mov8realestate.com/blog/item/76-first-time-buyers-fear-theyll-never-get-on-the-property-ladder.html
Story Two: Families Engulfed by Negative Equity (Scotsman): (http://thescotsman.scotsman.com/scotland/Families-engulfed-by-negative-equity.6789092.jp?articlepage=1 )
My Response: I felt strongly enough about this story to comment for the first time at the bottom of a Scotsman article! (see comment no.22)
The problem with a lot of these headline-grabbing surveys is that they are SO general and geographically wide-ranging. It is of course true that if you bought a property that has fallen in value by 15% and you bought that property with a deposit of only 10% then you are in negative equity. However, there are some properties in Scotland that have fallen in value by 40% since the peak of the market: step forward hugely over-priced modern-build flats sold 'off plan' and purchased just at the wrong time. Equally, there are properties that are selling for just as much as they were at the 'peak' of the market. And they lie within half a mile of each other! In other words, some properties have fallen disproportionately hard, others not at all. Furthermore, property prices in some areas have fallen very hard (high unemployment during the economic downturn, industry closing or downsizing) and others haven't been as badly affected.
These statistics were provided by a property sales website. So how did they come up with statistics of what hundreds of thousands of properties across the UK are currently worth? I did ask them via Twitter, but they didn't respond. I can only assume that the stats are based on averages. Not only that, but Scotland is treated as a 'region'. For goodness sake: the chances are that your home is worth something different from the one around the corner simply because it's on a different street. So how on earth are statistics based on the whole of the country terribly useful? In my view, they're not! However, they are eye-catching and the Press can't be blamed for covering them.
And Finally: My Grumpy Old Man Moment
I am not suggesting that we should act like the fiddlers on the Titanic and blunder through the next few years in the property market with an attitude of 'crisis, what crisis?'. However, I feel that reports of the demise of the property market are greatly exaggerated. The fact is that most of the best minds in the property industry and in the economics world were unable to correctly 'call' the property market crash that happened a couple of years ago. There are some people who say that prices have to drop by 50% from where they currently are. There are others who say that prices will stagnate along with the economy for a few years. Who should we believe?
The answer is that I have absolutely no idea. All I can do is report on what we are seeing, hope that the worst doesn't come to the worst, and do everything that I can about the things that I can actually control (which is to provide the best property marketing service that we can to meet the needs of today's property seller). Apart from that, it's out of our hands. So it doesn't really serve us to be totally negative about things. Sadly though, it appears that some of our competitors don't agree, so I had a wee rant! If you fancy reading said rant on our blog, click here: http://www.mov8realestate.com/blog/item/79-other-estate-agentscan-you-please-stop-re-tweeting-negative-property-stories-without-indicating-if-you-agree-with-them?.html
Robert Carroll is the Managing Director of MOV8 Real Estate and is a regular commentator in the Press on the Scottish property market. In spite of everything in the past few years, he remains upbeat about the property market and believes that much of what is written and spoken about the property market is nonsense.
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