Can the housing market cope with the latest rate rise? Love Property Market Update August 2023
Richmondshire houses are selling but slowly and reductions are now over 200% up on the same period last year calling for home sellers who want to move in 2023 to have to forget price aspirations when listing their home for sale.
Can the housing market cope with yet
another interest rate rise?
Let’s talk about the elephant in the room, it’s a tough market for any home mover right now.
We have now seen the 14th consecutive interest rate rise the UK interest rates now sitting at 5.25%, the highest rate we have seen since 2008.
Looking closely at DL7 to DL11 the figures we’ve gathered this month show that the housing market is slow and the number of sales agreed are only a very small figure in comparison to the number of homes available. Sales agreed in the entire month of July represent only 12% of the total homes available and any the time of writing there were over 500 homes available without buyers.
Interestingly the thing that is surprising is that even though the number price reductions are the highest they have been for a long time 77% of all sales agreed in July had not been reduced. Great news for some of the successful home sellers but the message here is that realistic pricing and marketing are increasingly important as this is being reflected in the fact that the homes that agreed sales had come to the market at a compelling price.
Online views - down 54%. This is the amount of times each individual property is viewed online as you can see this is significantly down and reflects the market activity.
The trend in the area that wont be so welcome is for the third month in a row the number of sales agreed has dropped month on month and for the first time in a long time there were less than 90 sales agreed and this is being reflected nationwide.
Some areas of the North Yorkshire market have maintained resilience with 84 home sellers in the post code areas of DL7 - DL11 finding buyers for their homes.
So is it a good time to move?
Sometimes delaying a home move because of the market is not the answer as a home buyer you can benefit from the vast choice available and more competitive pricing, last year you would have had less than half the homes available to choose from. Do consider that if you are buying a family home in comparison to an investment ask yourself; Is the price is affordable? Will the move positively impact your life? If the answer is yes then it is always a good time to move.
Looking back on the UK housing market, over most extended periods of time, 5 years or more it is unlucky if you lose money on the home you buy. Thinking more long term and the impact of waiting you may not be prepared to put your life on hold for several years just in case the housing values change.
Housing values will fluctuate all the time but historically they have recovered and improved! As long as you don’t need to sell when values are down. Do remember that selling in a buyers market often is a good thing as when you consider you buy and sell in the same market it negates any perceived loss and these market conditions can benefit up-sizers who take advantage of the narrowing gap in the jump in pricing.
The takeaway here is that it is a great time to be a home buyer, you have lots of choice of homes for sale as opposed to having very little choice since 2020.
Which areas are most popular?
If you live in DL7 or DL8 the buyers are buying and there were more sales agreed in July this year than last year!
In July the total number of houses available for sale increased by 82% compared to the same period last year (362) and at the end of July reached 659 in the DL7 - DL11, this means buyers have almost double the amount of properties to choose from and as they are selling much more slowly there is very little pressure to make a quick decision. The average time to find a buyer is now over 60 days on the market.
The number of sales agreed in July unsurprisingly fell short of the levels we saw in 2022, down by 17% which is to be expected given the increase in choice and less buyers on the ground. Please do remember that when you buy and sell in the same market that the fluctuations have much less impact, if your house value has changed so has the one you are buying.
Who are the winners in this kind of market?
The up sizers who are moving into a different pricing bracket as they will benefit from the reduction in the gap between where they are now and where they want to get to, also this end of the market tends to move quicker regardless of the conditions.
The down sizers who chose to sell and go into rented homes, benefiting from a strong sale price on their own property and now having a great choice on what they want to buy, not having a mortgage means no impact from the rate changes and in fact if there are home sale proceeds sat in the bank they are likely to have seen interest paid at a decent level this year, a welcome change for savers.
Which priced bracket of homes agreed a sale in July?
The most popular price bracket is the £250,000 - £500,000 accounting for 40 of the 84 sales agreed in July, this was at least double the amount of property sold in any other pricing bracket.
The upper end market
It was also good news for homes on the market in the £500,000 plus range. In an interesting twist these homes saw a renewed boost in July with 12 sales agreed and representing 14% of all of sales last month. The other very interesting fact was that 11 of these homes had been listed within the last 3 months and not been reduced. This shows that across all pricing ranges that buyers are there and will step forward if the right home is put in front of the right buyers.
Are detached homes still the most popular?
In July most of the sales were agreed on detached houses, it seems like these are the main choice currently. Semi detached following behind with terraces and bungalows in almost equal numbers.
So what can you do to improve your chances of selling?
Now more than ever marketing is playing an important role in your potential to sell.
If you are already on the market struggling to sell or thinking of going in the market here are our top ten recommendations…
- Speak to as many industry professionals (estate agents, conveyancers, friends, family etc) as possible so that you get an unbiased view of the sales market
- Decide what your priority is when selling. Speed or results… unfortunately you wont get both and choose an agent accordingly
- Get a true idea of where you should pitch your price, be realistic! Look online and see what homes are selling for and think about what you would want to pay for yours if you were buying. (We’re all tempted with high prices but this could leave you stuck on the market for much longer than you would like)
- Arrange some viewings with estate agents you are considering using (but maybe don’t mention you have a house to sell), ask yourself if you were a buyer would you be impressed and did they encourage you to view other homes, what questions were you asked? Would they know enough about a buyer to recommend a viewing to a home seller?
- When choosing an agent do your homework, a good agent will be worth their weight in final sale price, what are the returns they normally get? In a tough market the ability of your agent to make your home an attractive proposition and then negotiate a great deal for you can make the difference of tens of thousands of pounds to you as a home seller.
- Do you want to work with a big agent or a small agent? You may be tempted with an agent with lots of homes for sale but this often means sellers get overlooked.
- How often will you hear from your agent? Will they suggest things others than price reductions to get you moving?
- Did you know some agents will only accept viewing bookings online? In our area this can be quite a big barrier to buyers, we have lots of clients that would not want to enter lots of personal information into a computer system before booking a viewing. Do bear in mind that these buyers are not screened at all and lots of them will find your home totally unsuitable but wont have been made aware
- What kind of marketing will be carried out when selling your home?
- Ask people for recommendations, read reviews and testimonials and listen to their experiences and see if that would work for you.
Local property news highlights…
A flip round of the most popular areas this month as historically it has always been DL10 postcode from the areas we focus on but in July it was significantly more sales in the DL8 postcode area which was interesting, also half of these sales were in the villages and were across all pricing levels.
The highest price property sold in the area was a beautiful detached home in Garriston DL8 which was marketed for £1,595,000. This was one of three sales reported in July over £1,000,000 and this £1m+ had been on the market since early April and took just over 12 weeks to find a buyer. It’s a beautiful home and it is no wonder it was snapped up.
The other two sales over £1m were located in DL10, one of which had seen several reductions and taken over 6 months to sell and conversely one was listed and sold within 14 days! It just goes to show that buyers across the pricing range will commit if they see value in a home.
If you are planning a move in the next 12 months
Be prepared, give your home the best opportunity by making the slight tweaks that can make a huge difference when putting your house up for sale. We can advise you on what to do to enhance the value of your home, how to find and choose the most committed buyers and when its the best time for you to start with your marketing.
Laura and the Love Property Team
Ps. If you want to chat more you can connect with us in several ways,
1. Follow our blog by clicking here to stay up to date with what is happening in the property market and useful hints and tips to make the most of your home.
2. We can send you a personalised report, all you need to do is click here and fill in some information and send some pictures and we will send you back a report on your home.
3. Arrange an informal in person chat either in our office or at your home, call us on 01748 834373 or click here to book in and let us know when is best to meet up.