Buyers reluctant to view ‘overpriced’ homes
The New Reality for Home Sellers: Hypersensitive Buyers and Changing Markets
In a housing market marked by hypersensitivity to pricing, the dynamics for both buyers and sellers have shifted. OnTheMarket’s (OTM) latest Property Sentiment Index reveals that the number of homes going under offer within 30 days of listing has decreased from 54% to 38%. This shift is attributed to buyers becoming increasingly cautious about overpriced homes.
Seasonality Returns
The housing market, according to OTM, experienced a return to seasonality last month. While transaction numbers have seen a decline compared to the previous month, motivated buyers and sellers are still active in the market.
Jason Tebb, the CEO of OTM, notes that this slowdown in sales is not surprising. He attributes it to the combination of significantly reduced property stock and an abnormally high demand, which is unusual for the peak of summer. This scenario paints a picture of a very different market landscape.
Buyer Confidence vs. Seller Sentiment
The Property Sentiment Index reveals an interesting trend in buyer confidence versus seller sentiment. In August, three-quarters of buyers expressed confidence in making a move. In contrast, seller sentiment was not as strong, indicating a shift in power toward buyers. Nevertheless, 61% of UK sellers remained confident that they would sell their homes within the next three months in August, compared to 63% in July.
Regional variations further highlight this divergence. Confidence among sellers decreased in the North West and South East to 65% and 55%, respectively, in August, down from 72% and 62% in July. On the other hand, confidence in the East Midlands increased to 65% in August, up from 57% in July. These variations are likely driven by sellers’ sensitivity to local market activity, where they closely monitor property sale durations and prices.
Navigating Challenging Markets
Jason Tebb offers insight into how challenging markets tend to impact buyer behavior. In such conditions, individuals who aren’t serious about moving tend to step back, making speculative property viewings less common. Instead, some adopt a ‘wait and see’ approach, waiting for signs of inflation control or more favorable mortgage rates before committing to a move.
The buyers who remain active in these conditions are typically highly motivated but hyper-sensitive to pricing. They won’t hesitate to skip viewing a property if they perceive it as overpriced. However, Tebb provides reassurance to sellers, emphasizing that, despite a potentially smaller pool of buyers, data suggests they are genuinely motivated. Sellers who collaborate with local agents and price their properties sensibly can still complete successful transactions.
The Outlook
In conclusion, while the housing market is undergoing changes, it’s not all gloom and doom for sellers. Hypersensitive buyers are a reality, but they are motivated. Additionally, despite the possibility of rate rises, many lenders have already factored this into their offerings, with some reducing mortgage rates recently. This suggests that while the road may be different from previous years, opportunities still exist for sellers who are informed and adaptable in these changing market conditions.