One indicator that a market is running hot is a dramatic fall in ‘days on market’. Just last week a TVNZ story noted that days on market were in decline across the country with Wellington the lowest of them all. So we pose the question, do low days on market equate to higher prices?
Sold in 24hrs
Every time I hear someone crowing about how quicky they sold their property, my eyes roll a little. I ask myself why they didn’t at least allow themselves to make it to the open home. It’s also not uncommon for buyers to mention that they turned up to an open home only to be informed that, if interested, they would need to offer that same day. So, why does this happen?
Behavioural economics has grown in popularity since the late 2000’s thanks in part to the movie and podcast series ‘Freakanomics’. One of their featured stories was a study that found real estate agents in America sold their own properties for more money than their clients. The reason? They marketed their home for longer. What the researchers found was that real estate agents were incentivised to sell their clients’ homes quickly so that they could move onto the next deal. But ultimately, they recognised exposure to the market and getting buyers through the door is what drives a premium price. So, when it came to their own home, they allowed the time to create the competition and maximise the end result.
Same pay for less work
From an agent’s perspective, particularly a busy one, selling stock quicker allows for increased productivity and income. If an agent can achieve an acceptable result in the first few days, it means no open homes, no call backs, no private viewings and no reports to write. But is it an agent’s job to achieve an acceptable price? No. Any agent you engage should be out to achieve the very best outcome from the market. And, if it wasn’t possible for agents to drive a premium, then private sales would reign supreme.
Fear is a very real and valid emotion which drives behaviour in all aspects of life, often irrationally. And when your home is on the market, this can be a very scary and stressful time. There is often a lot riding on the outcome, for example, the purchase of your dream home. So when your agent comes to you and says ‘we have an offer which you need to consider because otherwise the buyer is going to consider another property’, what do you do? The answer. Sell.
It’s a conundrum and we completely understand it. Fearful sellers at the mercy of their agent. But in ten years of running deadline and tender campaigns right through to the advertised date, we have never had a buyer drop out of the process because they are not prepared to wait. Not only that, we watch time and time again as buyers work their way up the pricing scale during the campaign period as they become more invested in (and emotional about) the home. This is something to ponder if you are thinking of selling in the near future.
Always an exception to the rule
Every now and again an offer as good as “winning Lotto” is placed in front of a vendor. These are often unsolicited – perhaps from a door knock or letter in your box – and can be too good to refuse. The best way to decide if an offer is worth considering is to refer to the market assessment your agent initially provided. If the offer sits outside the top of their range, then maybe just maybe it’s worth cutting the campaign short.
The Wellington Market
For those of you on the open home circuit at the moment you may have noticed a reduction of buyers out at open homes. While the sales board continues to tick over, we are seeing about a third of the numbers we did even at the start of the year with far fewer new buyers looking to join the queues. The drop off is in line with a predictable seasonal drop which has most definitely been compounded by aggressive new government policies. What will be interesting is the three-month trend from April – June. That data should give a clearer picture of where the country is tracking.
Wellington Market Quick Stats:
What’s on this May in Wellington?
Wellington Better Home and Living Show 2021, Fri 14 May 10:00 AM – Sun 16 May 4:00 PM, Sky Stadium
Packed with hundreds of products and ideas for the home, the Better Home & Living Show will inform and inspire anyone wanting to improve their lifestyle in a sustainable way by showcasing tomorrow’s ideas, today. Featuring the latest trends and innovations for indoors and out, massive show-only specials, free daily Ask an Expert sessions, expert advice, plus the chance to win a fabulous show prize – it’s a must-see event for home & lifestyle enthusiasts. Better still, you’ll find it all under the one roof!
JERSEY BOYS tickets, The Opera House Wellington, 22nd May 2021
The internationally acclaimed musical, seen by more than 26 million people worldwide, tells the story of how four blue collar boys from the wrong side of the tracks became one of the biggest American pop sensations of all time.
Featuring hit after legendary hit including BEGGIN’, CAN’T TAKE MY EYES OFF YOU, OH WHAT A NIGHT, SHERRY, WALK LIKE A MAN, BYE BYE BABY, BIG GIRLS DON’T CRY and many more, Jersey Boys is a story full of heart, humour and ‘sheer musical razzamatazz’.
The Pink Floyd Experience 2021 Tour – Wellington. SAT MAY 29 TSB Bank Arena
The Pink Floyd Experience have almost become a household name in New Zealand and Australia after 22 years of regular touring and consistently delivering a world class show. With nearly 20 albums of Pink Floyd music to choose from, the Experience have had plenty of material to draw inspiration and ideas from to create a different show every time they tour.
If you, or anyone you know, could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always happy to help.