Predicting what house prices are going to do, in the situation that we find the country in, is like predicting whether a pregnant lady is going to give birth to a boy or a girl
A string of “experts” will peddle their opinion, and at some point in the future, when the baby is born, 50% will triumphantly claim they are correct, and that they have a “knack for this kind of thing”
But the reality is, no one can predict the gender of a new arrival, without facts and science. And those are sparse in the current housing market.
Let me explain.
House prices are a simple matter of supply and demand, if there is a surge in demand (buyers) but a shortage of supply (sellers) then prices increase, and the reverse is also true.
Estate Agents study figures, with obsessive vigor, so that they can see any slight shift in the market, immediately, and this then affects the advice they give to their clients.
The supply and demand is also governed by the mood, and feeling, of a nation. If people think that house prices are going to increase, then buyers come out of the woodwork in their droves, and in a self fulfilling prophecy, will push prices up. Confidence is key to a steadily increasing property market.
But what we have experienced over the last couple of months has stalled both the data for supply and demand.
Buyers have been busily scouring the property portals, to monitor the situation, but have been discouraged from leaving their homes, so we have limited data as to what their intentions are, and therefore what demand there truly is, and sellers have, quite rightly, stayed away, so we also cant tell what the supply will be.
Since returning, I am seeing many agents talking about how busy they are, and how excited they are for the future, but wasn’t it inevitable that we would be busy with viewings, when no one has been allowed to view for almost two months?
Don’t get me wrong, this is not a negative dig at agents, we have said the same. Since returning to the office, the phones have been busy, the viewings are up, and everything, on the surface, is looking rosy.
But it would be professionally disingenuous of us to throw caution to the wind, and claim that the market will be unscathed by the current crisis.
I am not saying it has, I am not saying it hasn’t, I am saying that it is far too early to tell.
There are many positive signs. Only a few days ago, we re-marketed a property in Wickford, that we had previously agreed a sale on before lock-down. Pre-lockdown, the property had a lot of response, and a sale was agreed quickly. When it needed relaunching, on our return, there was a fear that the same response would be hard to mimic, but our fears were soon allayed, as enquiries flooded in and the “SOLD” board was soon being re-ordered.
Every agent will be able to churn out anecdotes like this, and they are a nice, positive indicator that many buyers remain confident enough to invest in homes, and for every one of these positive anecdotes, there is also a story of a buyer pulling out, or trying to renegotiate a drastic price reduction before continuing with a sale.
The full effects of the coronavirus crisis will only be fully appreciated in the coming months, as furlough schemes are removed, forcing companies to decide who they can keep, and lenders find their way to deliver sensible, risk assessed, lending criteria and buyers attitudes will be developed and entrenched.
So what is the moral of the story? Should we be panicking about doom and gloom and screaming into our pillows at night, or should we be dreaming of the fortunes of equity we will have injected into the value of our homes?
I say neither.
To help navigate this market, calm is needed, and that calm can only come from experience. My 31 years in Estate Agency have taught me, that you tackle an uncertain market with a level-headed approach. You analyse, monitor, and use every slither of data to decide what needs to be done TODAY, and then look at tomorrow.
I am always available for a no-commitment chat to discuss your moving requirements, whether a move is imminent for you, or in the distant future.
Advice is always free, so feel free to use it.