The most commonly asked question to a real estate agent: “What’s happening with the market?”
With interest rates as low as they currently are, a drop in house prices across the board over a three year period and development potential in the Wagga Wagga region, all signs point to a pick up in the real estate market – the question is; “when”?
Let’s look at the current snap shot of Wagga. First of all sales activity has increased compared to this time last year. Whilst there are still over 1,000 properties for sale in the Wagga Wagga area (according to realestate.com.au) sales volume has almost doubled compared to January 2012 (as compared with Fitzpatricks Real Estate results in 2013). The number of buyers at open inspections has also increased from an average of 2.8 for the 2011-2012 year to an average of 4.8 in the 2012-2013 year. This means properties are experiencing lower days on market and turnover has increased.
But why are prices still so low? Volume of sales and quicker turn around periods are only part of the story. Just because there are slightly more buyers in the market place doesn’t mean they still don’t have an abundance of properties to choose from, and this fact keeps prices highly competitive. The other factor is the amount of over priced listings in the current market place. These properties make it easier for buyers to choose other alternatives – cheaper alternatives.
So what will the pendulum do over the next 11 months to close off 2013?
Some economists are predicting very little movement in prices, increases in properties for sale and what we refer to as a stagnant market. Things sell, but slowly and with very little competition to drive prices up. This is due to market volatility, potential change of government in September and a shaky outlook on foreign financial markets.
Other economists, particularly locals, feel that Wagga may be cushioned from any national or international instability due to the large amount of retail, commercial and government development about to occur. They say low interest rates, low vacancy factors and affordable prices will only add to the attractive prospect of new jobs and an increase in population as developments unfold, increasing demand and possibly outweighing supply.
So where should you stand on these two views?
My answer has always been to take what you have in any market and move when you need to rather than wait to see what may or may not happen. I remember when my wife and I were selling in order to upgrade in 2008 and prices had been steady for quite some time. we weren’t to know that in only a few months the Government would announce stimulus to the First Home Buyers increasing their grant from $7,000 to $21,000 plus State bonuses in effect driving competition and prices up for nearly 12 months. We could have been upset that we potentially missed out on thousands of dollars, but we could only do what we could do at the time. A further 18 months later and the market contracted when the incentive bubble burst leaving almost everyone with a capital loss for that same period.
There is no difference here. There may be a modest increase in property prices in the future due to an increase in demand from the $640,000,000 worth of development in our region (add another $400,000,000 if the Chinese Bulky Goods Exhibition Centre comes off!) but we could also see any number of global and national factors effect the local market too.
A couple of Saturdays ago I was organising an event that was to be performed outside at the local Amphitheatre. For three weeks we experienced perfect weather with a forecast 24 hours before the show indicating a 90% chance of storms and rain. I promptly changed the location to an indoor venue in case the storms hit. As it turns out there was some light wind but no rain and no thunder either. What we were able to do was adapt to potential conditions for a successful night. That’s what we have to do with the real estate market. There may be storms or sunny days ahead, but you have no control over the weather. You do have control over your own environment though – so adjust your property’s position in the market as opposed to waiting for the market to adjust for your property.
Adam Drummond has been selling properties in Wagga Wagga for over a decade and is one of the go-to people for all things real estate in the media having appeared regularly for ABC Riverina, WIN TV and Prime News. For more information on how to sell your property in the Wagga Wagga area, contact Adam directly on 0413 571 974 or firstname.lastname@example.org.