Wednesday, September 28, 2011

Inside Story

Footy Fever V's Real Estate Fever
Toop&Toop have had real estate fever with a huge week of sales, but what impact will the long weekend of sport - including the AFL Grand Final - have on our fragile spring property market?
The obvious impact is the drop in open inspections in the real estate pages this week as weary sellers and real estate agents take the opportunity to have a weekend off.
There is good news. Sales have been amazing so far this spring - which may come as a surprise to some. The one clear difference to market conditions this year compared to conditions in the late 90's is that "we have buyers". We have heaps of buyers!!
I was selling properties when interest rates were 15% and unemployment rates were double digit. Under those conditions we not only had prices in free fall, but there were no buyers and real estate was totally dead. Mortgagee sales were common and things were really tough. So we haven't seen anything yet in 2011.
I commonly hear real estate people say "this is the toughest I've ever seen it". That is clearly because those people have only been in real estate for a decade or so. Those of us who have been through the late 70's, early 80's and late 90's know that this market is a breeze compared to then. We have buyers galore, we have people employed, and we have ridiculously cheap interest stop whinging and get selling is what I say. It's all about relativity.
Sales are a breeze once a seller has decided they are serious about selling and prepared to accept reality.
The bitter pill for all of us is that the prices we can achieve today are sure not the prices we would have achieved at the peak of the market....but then again, what about the "poor" share investors. You don't hear them whinging all the time. Most share investors accept how stock markets operate and work with it.
Property owners have a lot to be thankful for.
In September Toop&Toop have made 1 x $4 million+ sale, 1 x $3million+ sale, 2 x $2million+ sales and  6 x $1million+ sales. In just 3 days and 3 sales last week we sold over $8 million under the hammer.
So for those agents and sellers it is time to stop whinging, stop sooking and accept the reality of the new conditions and work with it. The world has changed, the real estate peak is over and we have a new era of cheaper houses - so enjoy it. Falling real estate prices and share markets are a worldwide phenomena so we are actually not that special here in South Australia. Let's be thankful we are having a better time than most around the globe.
Let's be real. If you are buying and selling in the same market you are saving money in agents commissions and in stamp duty. Providing you sell first, and then buy, this is a great time to be moving. Given competent agency marketing, up to date negotiation skills and correct price expectations....buyers are active and they are buying!
So this long weekend, prepare for real estate fever as the run up to Christmas get's underway next weekend.
Anthony Toop
Note: Be sure to see this weeks episode of Toop.TV -  we have a frank discussion about shares and property.

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