These are two of the most commonly asked questions asked by anyone ready to, or thinking about selling their home, whether with a traditional agent or by private sale.
- How long will it take to sell?
- How much will it sell for?
It takes a brave person to answer either or both those questions with complete surety.
…the property market’s version of the Davinci Code.
The property market is awash with (recent) historical data that paints a picture of what has been going on in any particular suburb or town for the quarter (3 months) prior to the moment a property hits the market.
Core Logic, one of the leading property data sources have developed a Hedonic Price Index which they claim can measure property market movement/prices on a daily basis.
Hats off to them and I am the last person to dispute impressive maths, but even I, with 16 years of marketing and sale experience still look like the dog who has seen a UFO land when I try and decipher the property market’s version of the Davinci Code.
Pricing property and determining how long it will take to sell is not something that could be categorised as an exact science.
There is one factor that can’t be quantified, just yet, and that is human emotion. Fear and greed drive the property market and either switch can be flicked by buyers and sellers in a heart-beat – but it takes weeks, even months, for that fear and greed quotient to be truly measured.
For me, the best two measurable indicators that display the health of any market are:
- Median Price (although I prefer average price but almost every data platform runs with ‘median’)
- Days on market.
Median price is the middle price when taking into account the lowest sale price to highest sale price in any given area/suburb/town.
Days on market are generally measured from the day a property hits the market to the day an enforceable contract is executed.
As I like to keep things simple; it stands to reason – the longer the average days on market become, the greater likelihood that a market is slowing down.
Less buyers, taking longer to decide on the best value property for them.
Generally, the median price falls as days on market rises.
The opposite applies when buyers are more confident, less stock (property) on the market and decisions are made quicker.
Economics 101 – Supply and Demand.
…things may not be as dim as they sim.
Its not rocket science, but these two indicators are generally your best market barometer.
So, let’s look at some capital city suburbs for median price and days on market.
I simply stuck a pin in each capital city, for a suburb around 5-10kms from the CBD.
To help you form an opinion on how each suburb is faring days on market greater than 30-40, generally indicate a slower market.
However, I have to say, some of the numbers I am seeing, and the amount of buyer enquiry flowing through our agency says that things may not be as dim as they sim.
(Data supplied by domain.com.au)
Everton Hills (10km from Brisbane CBD)
3 bed home; Median Price $535,000; Days on Market – 38
Marrickville (10km from Sydney CBD)
3 bed; $1.4m; DOM – 26
Caulfield (10km from Melbourne CBD)
3 bed; $1.69m; DOM – 44
Bellerive (3.2km from Hobart CBD)
3 bed; $588,000; DOM – 20
Cheltenham (9km from Adelaide CBD)
3 Bed; $534,000; DOM – 70
Claremont (8km from Perth CBD)
3 Bed; $1.1m; DOM – 64
You can see that it’s a pretty mixed bag, with Hobart and Sydney leading the way for quicker turnover, with Perth and Adelaide properties taking longer to land a buyer.
Ok,what is the answer to “how long and how much?”?
Days on market and similar recent sales is the way baby!
A little objective research goes a looooong way to finding the answer.