The local property market continues to forge ahead and since the turn of the year can only be described as manic. Contrary to local opinion our market is being fuelled by mainly local purchasers. Enquiries from off island purchasers have increased tenfold as many UK and overseas residents are keen to relocate here, either for work, to retire or just to take advantage of our enviable virtually COVID free environment. Having said that, the current border restrictions mean that visiting and viewing is virtually impossible as our local Government continue to do their very best to keep as all safe.
Manxmove were doing live Virtual Viewings, Virtual Valuations and 360 Virtual Tours long before any of us had even heard of COVID 19. These proved absolutely invaluable during both local lockdowns as clients could virtually view properties live and also have their own property valued from the comfort and safety of their own homes. However, whilst we did find several purchasers willing to commit and complete on properties from live virtual viewings, a lot of purchasers were understandably uncomfortable about making such a big commitment based solely on a live video tour. Consequently these sales did not massively contribute to the astonishing amount of local sales that were being negotiated during this period.
Local mortgages still seem to be easy to obtain and interest rates are still historically low. However, the main contributing factor to the urgency we are experiencing in our local market is undoubtedly lack of stock. Manxmove are around 60% down on stock to previous years and, looking at the other agents sites, this appears to be the same for everybody. Quite simply stock has been depleted due to a massive increase in sales. I am pleased to say new listings are quite plentiful now though as we head towards the more buoyant Spring months but this is having little effect on agents stock levels as these new listings do not stay in stock for sometimes any longer than a few hours.
I would say that hundreds of chain free buyers have totally exhausted the limited available stock currently held by agents and these buyers are almost exclusively waiting to pounce on new listings. Consequently it is not at all unusual to receive 20 viewing requests on new listings within literally a couple of hours of launch. Manxmove tend to arrange these viewings in batches of 5 or 6 on a first come first served basis, although most properties don’t get as far as the second batch of viewers before being sold. We found that when we did organise all 20 viewings at once invariably we then had 15 viewings to cancel following several acceptable offers at asking price and sometimes beyond.
This lack of stock and increased competition between buyers is obviously the reason for some astonishing local property value increases. We have previously reported local property values increasing by over £1000 per week compared to last year in some cases and there seems little indication of this changing in the near future.
From an Agents point of view he or she is obviously duty bound to achieve the best possible price for the vendor. Manxmove certainly don’t encourage gazzumping at above asking prices but frustratingly we have to deal with this on a fairly regular basis. With the above price increases agents have to think about their valuations weekly as comparing today’s property values to a similar property sold six months ago would probably not even be close. Market conditions inevitably dictate values and these values increase rapidly when transactions are happening at above asking prices. Quite simply if an agent lists a property at say £300,000 and it rapidly achieves £310,000 then the next similar property that gets listed obviously gets listed at £315,000, and so on.
It’s a frustrating market for purchasers then to say the least and understandably this sometimes results in disappointed clients that haven’t been quick enough to get an appointment amongst the first batch of viewings. We have huge sympathy for all buyers at this time as it really is very difficult indeed to secure the right property at the right price. It’s frustrating for agents too as, if we have one house and 15 buyers then for every transaction we are potentially disappointing 14 clients. However it’s just a transaction to us and this doesn’t in any way compare to the frustration and disappointment of not being able to purchase a family home.
Buyers that are totally chain free seem to be the norm at the present time with many choosing to complete on their own transactions and move into temporary accommodation prior to purchasing. This obviously gives these purchasers the edge over purchasers that have properties to sell, but they still have to compete with numerous other chain free purchasers.
Clients that do need to sell to purchase are imperative in this market as we obviously need the stock to sell. However, a lot of these clients are reluctant to sell before having lined up a purchase and are therefore unfortunately unable to compete with the above chain free purchasers. Manxmove can fast track listings for these vendors as we guarantee to have them on the market and fully marketed on the same day we receive the clients instruction. In addition, we can also produce full property details ready for a “one click” launch as soon as these vendors have found something. For vendors that have definitely made up their minds to move, subject to finding a purchase, my advice would be to get their property launched and agree a sale to a purchaser that is prepared to give them time to find something. It’s a sellers market, so purchasers should be prepared to wait for the right home. We have done this for numerous vendors and it has worked perfectly on several occasions.
So will the market continue to rise or are purchasers best waiting to see if the market cools before committing to one of the biggest purchases of their lives? This is a crystal ball job I’m afraid but in my opinion, for the market to cool substantially at least one of the following factors that is fuelling it would have to change. Mortgages would have to be less obtainable or obtainable but at much higher interest rates. Local unemployment would need to rise substantially resulting in less affordability for purchasers. Stock levels would need to rise substantially resulting in much more choice and therefore the market being less stacked in the sellers favour. I think the above dramatic changes are unlikely in the short term so I would definitely be advising my family and friends to purchase as soon as they can. In addition, the eventual opening of our borders will inevitably result in a lot more overseas viewers and associated sales.
Graham Wilson FNAEA (Dip REA)
Manxmove Estate Agents