Property Market Update – November 2022
November 21, 2022 12:57 pm
With the decorations going up in the office, it really is beginning to look a lot like Christmas, and with it the inevitable slow down for estate agents. We expect to remain busy with new instructions, viewings and sales progression in the run up to the big day, we know that many agents will be feeling the effects of the changing market conditions.
Rightmove has published its latest statistics. Whilst they report nationally, the average figures do reflect the data for the North West. They report the average price of property coming to the market dropped by 1.1% (-£4,159) this month, which despite the weight of financial uncertainty is in line with the average 1.1% drop recorded in November during the pre-pandemic years of 2015-2019.
The proportion of properties seeing a reduction is only slightly up on pre-pandemic levels, though a slowdown in activity from last year’s frenetic market has led more sellers to be willing to reduce their asking price to agree a quicker sale. This is perhaps a reflection of over valuing by other agents or overly optimistic expectations from property owners.
Some new buyers appear to be holding off to wait for more financial certainty, while others who were already stretching themselves have now had to pause. Rightmove go on to report that buyer demand is still up by 4% on the more normal market of 2019, but down by 20% on October last year. First-time buyer properties continue to be the most affected sector, with year-on-year demand down by 26% in October, while second stepper demand is down by 17%, and top of the ladder is down by 15%. We are still experiencing greater buyer demand across the board when compared to pre-pandemic levels although transaction volumes are expected to fall.
The recorded monthly price drop is exactly in line with the average 1.1% that Rightmove recorded in November during the pre-pandemic years of 2015 to 2019, and so should not be regarded in isolation as a negative indicator. However, there are signs that more existing sellers, whose properties were already on the market and unsold, are willing to take their agents’ recommendations and reduce their prices in order to achieve a quicker sale.
Nationally, the proportion of unsold properties seeing a price reduction has increased only slightly from the pre-pandemic 7.5% in October 2019 to 8% this October. However, it has doubled from the figure of 4% in the frenzied market of October 2021. Buyer demand is still performing better than it was during the more normal market of 2019, but it is clear that we have returned to a much more price-sensitive housing market after two years of a buying frenzy.
Tim Bannister Rightmove’s Director of Property Science concludes that “The plethora of predictions about what might happen to prices next year comes at a time when much is still uncertain, but what is certain is that the exceptional price growth of the last two years is unsustainable against the economic headwinds and growing affordability constraints. Home-owners who come to market in the final few months of the year tend to price lower to attract buyers in the lead-up to Christmas, and we’re hearing from agents that both existing and new sellers understand that to sell in the current market they need to price competitively. During the market frenzy many agents said that they had to rip up the rule-book on valuing properties due to bidding wars, but now they’re back in more familiar territory, and pricing right first time is even more critical to securing a quick sale.’
As we have said for the last couple of months, pricing is absolutely critical. We discuss vendor expectations and our own valuations with all of our clients and look to formulate a clear strategy on how best to market a property, ensuring that we get the best sale price. Over valuing, cheap fees and cutting corners on marketing will have a far greater impact on property sales over the coming months, our advice – Don’t Do It. Use a quality agent with local experience and an excellent team to sell your property.
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